SaaS Subscription Model

The SaaS Subscription Model is just fundamentally different from the business model of traditional product companies, with different priorities, concerns, metrics, reporting, etc. As our world is advancing toward change and focusing on customers as the center of a business, we are also converting to a Subscription world. This enables us to adopt a SaaS Subscription Model where users are paying for what they use, when they want it. Popular examples of SaaS Subscription businesses are: Netflix, Hulu, Spotify, and more!

As we pivot our businesses into this new direction, it is crucial to keep in mind several things of meaningful metrics that are applicable to companies utilizing the SaaS Subscription Model:

  • Value one-time revenue very differently than recurring revenue
  • Measure business across multiple dimensions of time -- not just the past, but the future as well
  • Manage complex changes that can create chaos in downstream processes, such as mid-month subscription cancellations that can result in credits or refunds thereby impacting revenue recognition

The Subscription world is becoming larger and larger, and it is crucial to familiarize your company with the SaaS Subscription Model to head towards the direction of success. Let's focus on how to better improve your customers' experience and build a world where clients are central.

Download our guide now and learn more on basic equations for a successful SaaS Business Model.