Discount ImpactDiscounts as % of MRR
How much recurring revenue you're giving away in coupons and discounts.
The share of your recurring revenue lost to active coupons, promotional pricing, and negotiated discounts. A small per-deal discount feels harmless, but stacked across the base it quietly compresses MRR, ARPU, and gross margin.
Formula
Discount Impact = Discount Amount ÷ Gross MRR (before discounts)Worked example
Gross MRR before discounts $52,000; active coupons total $4,160/mo → Discount Impact = 8%. Net MRR billed = $47,840.
Benchmark
Effective discount rateWhy it matters
Discounts are the easiest concession to grant and the hardest to claw back — early customers often keep promo pricing for years. Tracking discount impact tells you the real, net price your market pays, and whether 'growth' is actually just discounting. It also flags when a few large discounted accounts distort your blended ARPU.
Common mistakes
- Reporting list-price MRR while billing discounted amounts — overstates real revenue.
- Letting time-limited coupons roll over indefinitely with no expiry review.
- Not separating one-off promotional credits from recurring discounts.
- Ignoring discounts when computing ARPU and gross margin.
Tracked in FlowMRR
Conversion → coupon & discount cost panel shows exactly what active codes are costing you.
