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SRExample situation: Moving From One-Off Sales to a Subscription
Question
“We sell software as a one-off license of 2,400 euros. We are thinking of moving to a subscription of 90 euros a month. Our revenue would be more predictable, but we are afraid of losing existing customers and new sales during the transition. Should we switch?”
What to question
How much cash do we lack in the first year after the switch? What share of customers would cancel the subscription in the first 12 months? What do we offer customers who have already paid for a license?
How the depth changes
Focused → broader → deepest
Four perspectives quickly separate the desired outcome from the risk of the switch: how much a customer pays in total over three to five years under…
Four additional perspectives question the assumption that a subscription is automatically better, model a scenario in which the cancellation rate…
Four additional perspectives test cash flow during the transition (the years in which revenue falls before it grows), terms for existing customers (a…
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