Subscription Plan
What are they, what are some common types
Table of Contents
Monthly Recurring Revenue Subscription Models
Usage-based Subscription Models
What is a Subscription Plan?
As a startup, you're always looking for ways to monetize your product or service. One way to do this is by offering subscription plans to your customers. But what are the different types of subscription plans out there? And which one is right for your startup? Let's take a look.
Monthly Recurring Revenue Subscription Model
The most common type of subscription plan is the monthly recurring revenue (MRR) model. Under this model, customers pay a set amount each month in exchange for access to your product or service. This type of subscription plan is popular because it's easy to understand and predict cash flow. Plus, it gives customers the flexibility to cancel at any time if they're not happy with the product or service.
Usage-based Subscription Model
Another type of subscription plan is the usage-based model. Under this model, customers are charged based on their usage of your product or service. This type of subscription plan is popular with startups that offer cloud-based services, such as storage or computing power. The advantage of this type of subscription plan is that it can be more profitable than the MRR model if customers use a lot of your service. However, it can also be less predictable, which can make it difficult to manage cash flow.
In Conclusion
There are two main types of subscription plans for startups: monthly recurring revenue (MRR) and usage-based. The MRR model is easier to understand and predict, while the usage-based model can be more profitable if customers use a lot of your service. Ultimately, it's up to you to decide which type of subscription plan makes the most sense for your startup.
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