The subscription model is rapidly becoming the norm for new products and services. Customers are signing up for subscription services to replace things that they once bought and owned outright. Customers tend to stick around longer in a subscription model because the relationship is regular, and they know what to expect. For this reason, many subscription-based companies are looking to find ways to upgrade their current, subscribing customers. In addition, acquiring new customers is much harder and costs more than getting additional revenue from existing customers.
A critical step in creating an upgraded level for a subscription service is developing a sales projection. The projection is a critical step in understanding how top line revenue will grow. A data visualization tool is a great solution for projecting revenue growth. The below dashboard offers an example of how a data visualization tool can provide a way to test various scenarios.
Let’s use the Revenue Projections dashboard to look at how a monthly pet food delivery service could increase its revenue. The upgraded subscription service level offers a monthly delivery that includes treats in addition to pet food. First, the additional revenue projected for the upgraded level is entered. Let’s say the company charges an additional $15 per month for the upgrade. Next, the current number of subscription customers is entered along with the percentage of existing customers that are likely to upgrade. The dashboard calculates the revenue increase for a monthly subscription period. An incremental increase in the number of upgraded subscriptions is assumed for each month.
If your business is trying to come up with a new model to offer to your customers, then I hope you find this tool useful. I also am available to modify this tool to customize it for your business. Please contact me if you are interested in learning more.