Sales Funnel Annual Recurring Revenue Calculator
Estimate annual recurring revenue from your sales funnel using lead volume, conversion rates, average deal size and customer retention.
Overview
The Sales Funnel Annual Recurring Revenue Calculator helps you estimate how much recurring revenue your funnel could produce over a year. Enter your monthly lead volume, conversion rates, average monthly subscription value and annual retention rate to see projected customers, MRR and ARR.
How it works
The calculator moves leads through two conversion stages to estimate how many new customers you win each month. It multiplies those customers by your average monthly subscription value to estimate new MRR, annualizes that amount to estimate gross ARR, and then applies your annual retention rate to estimate retained ARR after 12 months.
How to use this calculator
- 1Enter the number of leads your funnel receives each month.
- 2Add your lead to opportunity conversion rate.
- 3Add your opportunity to customer conversion rate.
- 4Enter your average monthly subscription revenue per customer.
- 5Enter your annual retention rate and review the projected ARR.
Example Calculation
Monthly leads
1000
Lead to opportunity rate
20%
Opportunity to customer rate
25%
Average monthly subscription
$200
Annual retention rate
85%
Estimated annual recurring revenue
$102,000
With 1000 monthly leads, a 20% lead-to-opportunity rate and a 25% close rate, the funnel generates about 50 new customers per month. At $200 per month each, that is about $10,000 in new MRR, or $120,000 gross ARR. Applying 85% retention gives an estimated retained ARR of $102,000.
Frequently asked questions
What does this calculator estimate?
It estimates how many new customers your funnel may generate each month and the annual recurring revenue those customers could produce.
What is the difference between MRR and ARR?
MRR is monthly recurring revenue, while ARR is the annualized value of recurring revenue, usually calculated as MRR multiplied by 12.
Why does retention affect ARR?
Retention reduces the annual revenue estimate to reflect that not every customer is expected to stay for a full year.
Can I use this for non-subscription businesses?
It is most useful for recurring revenue models such as SaaS, memberships or service contracts. It is less suitable for one-time sales.
Does this include upsells or expansion revenue?
No. This version focuses on revenue from new customer acquisition and the retention rate you enter.
What if my funnel has more than two stages?
You can simplify your funnel into the two conversion steps used here or use average stage-to-stage rates that reflect your broader process.
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Assumptions and warnings
Assumptions
- This calculator assumes lead volume, conversion rates and average subscription value stay consistent throughout the year.
- Annual recurring revenue is estimated from new customer revenue and then adjusted using the retention rate you enter.
- The calculation uses a simple two-stage funnel from lead to opportunity to customer.
- Results are estimates and do not include refunds, expansion revenue, discounts, taxes or one-off fees.
Warnings
- This calculator provides an estimate only and should not be used as the sole basis for business or financial decisions.
- Actual recurring revenue can vary due to seasonality, churn timing, pricing changes and sales cycle differences.