Types of Recurring Revenue

Types of Recurring Revenue

December 26, 2024 by investor

Recurring revenue can be implemented in many ways.

Here’s a list of the different types of recurring revenue:

Charge based on time — this form of recurring revenue charges based on a period of time say a month or a year.

It’s simple and can be applied to all customers equally.

Perpetual use — this type of recurring revenue charges for continual access to a service through which one can buy specific goods or services.

The perpetual model creates a customer base that can be upsold to other products.

Product usage-based — this form of recurring revenue charges based on the usage of the product.  

Storage is an example of paying for the amount of storage used on a recurring basis.

Per seat usage — this type of recurring revenue charge based on how many users access the platform.

This works for enterprise applications which can have varying numbers of users.

Price tiers — this type of recurring revenue offers several price levels based on the usage and number of features used.

Freemium models — this type of recurring revenue uses a free product for onboarding customers and then charges a recurring fee for the use of premium features.

Consider these variations of recurring revenue for your business.

 

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