21.10.2020

Sales & CRM

How to Build a Monthly Recurring Revenue Pipeline in HubSpot

6 min read

Rebecca

hubspot, pipeline, sales

Tracking your sales pipeline and forecasts is key to scaling any business. After all, how do you create a solid business plan or spot an opportunity for growth without that data? In this blog post, we'll show you how HubSpot lets you easily calculate and visualise this data so you can begin making educated business decisions.

Are you wondering if your sales pipeline and forecast is keeping up with your business plan and financial projections? When you’re overseeing a large organisation, getting the insights you need can be tough. Thankfully, tracking your monthly recurring revenue (MRR) can confirm whether you’re headed for your financial bulls-eye. And the HubSpot growth platform can help you do this, efficiently. 

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HubSpot’s Sales Hub Enterprise lets you track the value of a deal over time with its revenue analytics report. Here’s what you need to know about monthly recurring revenue reports, and how to build a monthly recurring revenue pipeline in HubSpot.

Why is monthly recurring revenue an important metric?

It’s easy to underestimate how useful knowing your monthly recurring revenue (MRR) can be. While traditionally associated with SaaS and other subscription services, MRR is equally relevant for all businesses. 

Tracking MRR is key to understanding your sales pipeline and forecast against your business plan and financial projections. It tells you how much income your company is generating each month, which later allows you to analyse revenue trends and compare monthly recurring revenue to sign up and customer retention rates. This gives you fundamental insights into how your team’s performance relates to your company’s bottom line.

Building MRR analysis into your reporting gives you the revenue information you need to make educated business decisions.

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For example, say you close a deal at £96,000 for a 12-month engagement. Your monthly recurring revenue on this deal will be £96,000 ÷ 12 = £8,000. Of course, things get more complex in large organisations, so it’s generally calculated by multiplying the average revenue per account, by the total number of accounts you’ve got signed that month.

Or: MRR = Average Revenue Per Account x Total Number of Accounts That Month

With this metric, you’ll know if your company is growing or shrinking on a month-to-month basis. To learn more about this metric, and how to calculate it, check out this HubSpot blog post, Everything You Need to Know About Monthly Recurring Revenue.  

How to create a monthly recurring revenue pipeline in HubSpot

Let’s swing back to the example of the £96,000 12-month deal, and see how HubSpot can help you automate this process.  

To track your MRR for this account, you’ll need to input the expected MRR (£8,000) into a deal field in HubSpot. This is where HubSpot can make things much easier — they have a number of fields that are native to the platform. Using the above example, you’d populate these in the following way:

  • Recurring revenue amount: Total amount of monthly recurring revenue associated with a deal. In this case, it would be ‘£8,000’.

  • Recurring revenue deal type: In this case, we’d select ‘New business’ as our option.

  • Recurring revenue inactive date: That date after which this amount is no longer collected. In this case, it would be the end of the contract — 12 months.

  • Recurring inactive reason: Why this specific MRR amount is no longer collected. This could be due to an upsell, downgrade, upgrade, renewal or churn.

By enabling recurring revenue properties like these on each deal, you can collect and use this data on a deal level to start building MRR reports that clearly show when new deals close, the monthly revenue that each new deal contributes towards the overall target, and when that revenue will be dropping off the pipeline.  Find out how to set up recurring revenue tracking per deal in the HubSpot Knowledge Base article, Track Recurring Revenue in HubSpot.

This allows an element of forecasting, as you’re now mapping revenue over the lifespan of the deal. Looking for a quick overview? Access these reports in the HubSpot reports > analytics tools > revenue analytics reports section. 

When and how to implement

The sooner you start tracking MRR, the sooner you can get valuable insights into revenue per deal, and per month. However, we know operational changes can come slowly in large organisations, no matter how valuable they are. 

At Huble Digital, we’ve made it our mission to take this kind of trouble off your hands. As a HubSpot Elite Agency Partner, we help enterprise business teams use the HubSpot growth platform to maximum effect — including setting up and rolling out the use of MRR pipelines and reporting. Find out more about our HubSpot agency services or set up a meeting with one of our consultants and let’s discuss your needs, goals and how we can help you achieve them. 

Not using HubSpot yet?

Book a demo with our team today.

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