Recurring Revenue Fallacies & Truths


The desire for businesses to adjust their go-to-market strategies in order to offer products in some form of recurring revenue model has now graduated from a collection of vanguard recurring offerings (e.g. Netflix, Uber, Amazon Web Services) to an urgent imperative that spans virtually all industries. It is arguably a truism that has become unavoidable: regardless of what you sell, some or all of your customer base will expect a way to pay for it that spans time, mitigates or avoids the hurdle of up-front capital expenditure, and more directly reflects the long-term way in which people consume products in the digital age. Customers are embracing recurring revenue models, businesses have fallen in love with the revenue predictability offered by them, and investors are rewarding those who do it right and punishing those who don’t.

However, for business that are exploring the movement to recurring revenue models for the first time, there are social and technical challenges that are overlooked at their peril. This article endeavors to point out, at a high enough level to be as broadly applicable as possible, some of the false assumptions (i.e. fallacies) often made by new entrants to these models, what the general sources of those assumptions are, and to offer alternative ways of thinking that are far more likely to yield a successful market position.

Once you’ve got the specs down, give Aria a call and let us show you how our cloud billing and monetization solution can help grow your customer-era business.


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