Unit Economics for Recurring Revenue Businesses
For Recurring Revenue Businesses, Your “Unit” is Your Customer
In this FREE chapter download, we will dive into the power of a recurring revenue business and what that means for understanding unit economics. Recurring revenue is any product or service that a customer purchases on a repeatable, predictable basis. We will uncover the metrics used by recurring revenue businesses like MRR, CAC, LTV, and payback period.
While there are a lot of benefits to a recurring revenue business model, there are also some risks and we’ll discuss these. Most notably, the risks involve financing customer acquisition and then, retaining that customer long term.
This chapter will provide perspectives on:
- The benefits of a recurring revenue model
- Understanding and being prepared for the risks of recurring revenue
- Key calculations of recurring revenue metrics
Out of this chapter, I want you to be thinking about:
- How recurring revenue could be a differentiator for your business model
- Strategies for improving retention in your business
- Methods to acquire customers cost-effectively
- Setting up your financials to get the information for important calculations
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