The subscription business model is a business model where a customer pays a subscription price to have access to a product or service. Subscriptions are typically paid by units, e.g. by user, server, .. The Lean-Case Revenue Stream Subscription bundles a Subscription specific Revenue Model, the Revenue Forecast Model and revenue related cost models.

Check out the following example to understand the basics of a Subscription Revenue Model (see figure below):

  • a Business sells subscriptions of an accounting service to 2 different customer types: a Startup Plan and an Enterprise Plan
  • For a Startup Plan, a customer typically pays a subscription of $100 on a monthly basis
  • For an Enterprise Plan, a customer typically pays a subscription of $300 on a monthly basis
  • Small Customer make up 70% and large customers make up 30% of all new customers.
  • the Business adds 1 new Sales Team per Month between Jan 18 und Jun 18
  • each Sales Team acquires 10 new customers per month (for the above example: 7 startup plans and 3 enterprise plans). 

 

Related Categories 

Follow the links below to dive into more detail on how to create a Subscription Revenue Stream: