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How to Choose the Right Recurring Revenue Model

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How to Choose the Right Recurring Revenue Model

  • 1 | 2 | 3 | 4 | 5 | 6 | 7

Over the last decade, CEOs, investors, analysts and business advisors have fallen in love with the recurring revenue model. And why not?

Recurring revenue models provide for:

  • more predictable revenue streams
  • the ability to scale costs with revenues
  • a lower cost of sales, and higher lifetime customer value
  • benefit to customers due to lower up-front costs and more flexible terms

So the question is not if you’ll adopt such a model, but how to determine the right recurring revenue model for your organization.

Aria Systems, a leader in cloud billing systems, recently released a whitepaper that demystifies the three most widely adopted models: subscription, usage, and subscription plus usage, covering how each makes sense in different situations by delivering different advantages for sellers and buyers. The e-paper further delves into the various pricing “tactics” that can be used in conjunction with these models such as “freemium,” pre-paid, tiered and unlimited usage.