Revenue Streams (Customer Contracts)
Lean-Case provides different kinds of revenue streams to model the Get-Customer as well as the Keep-and-Grow-Customers Phase of the Customer Lifecycle with different types of revenues:
Please also check out What Revenue Streams do.
To each revenue stream, you can add 1 or more Customer Contracts which define the characteristics of the selected revenue stream.
Funnel Stream
Simpy enter a name for your contract type (e.g. 'Lead', 'Signup', ’Trial’, ‘Cart’, ...)
Subscription Revenue Stream
The subscription business model is a business model where a customer pays a subscription price to have access to a product or service. Subscriptions are typically paid by units, e.g. by user, server, ... The Lean-Case Revenue Stream Subscription bundles a Subscription specific Revenue Model, the Revenue Forecast Model and revenue related cost models.
Enter assumptions for the Customer Type in the Widget Template:
Customer Contract
What do you want to call this type of Customer Contract or Customer Plan?
Enter a name for your Contract Type (e.g. 'Startup Plan', 'Service Customer', ’Shopper’, ...)
How many existing customers with this type of Customer Contract do you have at the beginning?
How many existing customers with this type of Customer Contract do you have at the beginning?
Monthly Sales Volume
The average monthly Sales Volume of customers is defined by the number of units which they buy per month multiplied by the average sales price per unit for that month.
If you sell services, units might be haircuts, meals, consulting engagements, fixed-price contracts, .. If you sell services billable by hour or day, units might be billing hours or billing days.How best to define a 'unit' depends on what you sell
What is the average Sales Price per Unit?
Enter the average sales price per unit. If you plan to change the price over time, to reflect price changes during contract lifetime, you can edit it using the spreadsheet icon next to the input field.
How many units does a customer buy on a monthly basis?
Enter the average number of units you think to sell to this customer in each month to reflect unit expansion during contract lifetime, you can edit it using the spreadsheet icon next to the input field.
Revenue Share and Discount
Sales Volume is the amount paid by a customer (no of units sold multiplied by price per unit). Sales Volume does not necessarily equal revenues because you might have to share part of the Sales Volume with 3rd parties (e.g. for commissions). In addition, you might grant discounts to customers which reduce your gross revenues further.
This is how Lean-Case calculates Revenues based on Sales Volume, Revenue Share and Discount
Sales Volume
- Revenue Share for 3rd parties
= Gross Revenues
- Discounts
= (Net) Revenues
What is Your Revenue Share in % of Sales Volume?
Enter ‘your revenue share’ in % of Sales Volume. By default, your revenue share is set to 100%, i.e. you can keep all money and do not have to share. If you plan to change the revenue share rate over time, you can edit it using the <UPW> icon.
What are discounts in % of Gross Revenues?
Enter the discount rate in % of Gross Revenues. By default, the discount rate is set to 0%, i.e. you are not granting any discounts. Gross Revenues and (Net) Revenues are the same. If you plan to change the discount rate over time, you can edit it using the <UPW> icon.
Enter the discount rate in % of Gross Revenues. By default, the discount rate is set to 0%, i.e. you are not granting any discounts. Gross Revenues and (Net) Revenues are the same. If you plan to change the discount rate over time, you can edit it using the <UPW> icon.
Contract Duration and Churn
What is the contract duration and billing period for this contract type?
Enter the billing period which also defines the contract duration for a subscription contract. Is the customer billed "Monthly", "Quarterly" or "Yearly"? This has significant impact on the cash flow. After the billing period the contract expires and the customer is up for contract renewal.
What is the customer churn rate upon contract renewal?
What percentage of your existing customers will cancel their contract before their contract renews and their next payment is due? We apply this rate to the customers which are due for renewal at the start of each period. If you plan to reduce your churn rate over time (that should be your objective), you can edit it using the spreadsheet icon.
By default, the churn rate for Subscription Revenues is set to 0% (i.e. ALL customers automatically renew their contracts).Please note: The Churn Rate is always linked to the contract duration. 10% Monthly Customer Churn means that 10% of customer are churning every month and the average customer lifetime is only 10 months. Whereas 10% Yearly Customer Churn means that 10% of customer are churning every year and the average customer lifetime is 10 years. To convert a Yearly Churn Rate into a Monthly Churn Rate, an approximation is to divide by 12. You can look up at the exact formula in our help center.
Billing & Cash Flow
What are discounts in % of Gross Revenues?
Enter the discount rate in % of Gross Revenues. By default, the discount rate is set to 0%, i.e. you are not granting any discounts. Gross Revenues and (Net) Revenues are the same. If you plan to change the discount rate over time, you can edit it using the spreadsheet icon.
How much time does your customer have to pay the invoice?
Select the payment terms. How many days after the invoice was issued does your customer have to pay. This is when you should receive cash in your account. If customers pay by credit card, select "0 days" for immediate payment.
One-Time Revenue Stream
The One-Time revenue model is a business model where a customer pays one-time for services such as consulting or buys products over a specific contract duration. Lean-Case Revenue Stream One-Time Revenue bundles a Subscription specific Revenue Model, the Revenue Forecast Model and revenue related cost models.
Customer Contract
What do you want to call this type of Customer Contract or Customer Plan?
Enter a name for your Contract Type (e.g. 'Startup Plan', 'Service Customer', ’Shopper’, ...)
How many existing customers with this type of Customer Contract do you have at the beginning?
How many existing customers with this type of Customer Contract do you have at the beginning?
Monthly Sales Volume
The average monthly Sales Volume of customers is defined by the number of units which they buy per month multiplied by the average sales price per unit for that month.
If you sell services, units might be haircuts, meals, consulting engagements, fixed-price contracts, .. If you sell services billable by hour or day, units might be billing hours or billing days.How best to define a 'unit' depends on what you sell
What is the average Sales Price per Unit?
Enter the average sales price per unit. If you plan to change the price over time, you can edit it using the spreadsheet icon to reflect price changes during contract lifetime.
How many units does a customer buy on a monthly basis?
Enter the average number of units you think to sell to this customer in each month. If you plan to change the number of units over time, you can edit it using the spreadsheet icon to reflect unit expansion during contract lifetime.
Revenue Share and Discount
Sales Volume is the amount paid by a customer (no of units sold multiplied by price per unit). Sales Volume does not necessarily equal revenues because you might have to share part of the Sales Volume with 3rd parties (e.g. for commissions). In addition, you might grant discounts to customers which reduce your gross revenues further.
This is how Lean-Case calculates Revenues based on Sales Volume, Revenue Share and Discount
Sales Volume
- Revenue Share for 3rd parties
= Gross Revenues
- Discounts
= (Net) Revenues
What is Your Revenue Share in % of Sales Volume?
Enter ‘your revenue share’ in % of Sales Volume. By default, your revenue share is set to 100%, i.e. you can keep all money and do not have to share. If you plan to change the revenue share rate over time, you can edit it using the spreadsheet icon next to the input field.
What are discounts in % of Gross Revenues?
Enter the discount rate in % of Gross Revenues. By default, the discount rate is set to 0%, i.e. you are not granting any discounts. Gross Revenues and (Net) Revenues are the same. If you plan to change the discount rate over time, you can edit it using the spreadsheet icon next to the input field.
Enter the discount rate in % of Gross Revenues. By default, the discount rate is set to 0%, i.e. you are not granting any discounts. Gross Revenues and (Net) Revenues are the same. If you plan to change the discount rate over time, you can edit it using the spreadsheet icon next to the input field.
Contract Duration and Churn
What is the average contract duration in months?
Enter how many months the average contract for One-Time or Pay Per Use Revenues typically runs. By default, a they occurs in only 1 months, i.e. the contract duration is set to 1 month.
Please note: For One-Time Revenues using the Fixed Lifetime Model, the Contract Duration can only be 1 Month
How many of your customers churn and do not renew their contracts?
What percentage of your existing customers will renew their contract after it expired? By default, the churn rate for One-Time and Pay-per-Use Revenues is set to 100%, i.e. all customers are one-off customers and they churn without renewing their contracts after the contract duration. If a share of your customers returns periodically - e.g. after 6 months 70% of your customers return - enter a contract duration of 6 months and a churn rate of 30% (i.e. 30% churn away, but 70% return)
We apply the churn rate to the customers which are due for renewal at the start of each period. If you plan to reduce your churn rate over time (that should be your objective), you can edit it using the spreadsheet icon next to the input field.Please note: The Churn Rate is always linked to the contract duration. 10% Customer Churn for a 1-Month Contract means that 10% of customer are churning every month and the average customer lifetime is 10 months. Whereas 10% Customer Churn for a 12-months contract means that 10% of customer are churning after 12 monthsr and the average customer lifetime is 10 years. To convert Churn Rates for different contract duration, you can convert them into a Monthly Churn Rate. An approximation is to divide by the Contract Duration. You can look up at the exact formula in our help center.
Billing & Cash Flow
What is the average billing period for your customer?
Enter the billing period. Is the customer billed "Monthly", "Quarterly" or "Yearly"? This has significant impact on the cash flow.
When is the invoice issued?
Enter when during the billing period, you issue the customer invoice. Is this “At the Start” or “At the End” of the Period? This has significant impact on the cash flow.
How much time does your customer have to pay the invoice?
Select the payment terms. How many days after the invoice was issued does your customer have to pay. This is when you should receive cash in your account. If customers pay by credit card, select "0 days" for immediate payment.
Pay-per-Use Revenues
The Pay-per-Use revenue model is a business model where customers pay-per use revenues applying minimum revenues, $-fees to process transactions or %-fees as a percentage of sales volume. Lean-Case Revenue Stream Pay-per-Use Revenue bundles a Pay-per-Use specific Revenue Model, the Revenue Forecast Model and revenue related cost models.
Customer Contract
Enter a name for your Contract Type (e.g. 'Startup Plan', 'Service Customer', ’Shopper’, ...)
What do you want to call this type of Customer Contract or Customer Plan?
Enter a name for your Contract Type (e.g. 'Startup Plan', 'Service Customer', ’Shopper’, ...)
How many existing customers with this type of Customer Contract do you have at the beginning?
How many existing customers with this type of Customer Contract do you have at the beginning?
Monthly Sales Volume
The average monthly Sales Volume (or Transaction Volume) of customers is defined by the number of transactions processed for a customer multiplied by the average transaction amount per transaction.
How best to define a 'transaction' (or 'unit') depends on your type of business. These might be payment transactions, small purchases, advertising clicks, airtime loads, ..
What is the average number of transactions processed for this customer contract? How many transactions per month and per customer do you have to process on average?
Enter the number of transactions you think you sell to this customer type in each month. You can set this as a flat amount or vary the amount over time to reflect growth, seasonality, added resources, and so on using the spreadsheet icon next to the input field.
What is the average amount per transaction?
Enter a constant average amount per transaction or vary it over the lifetime of a customer contract using the spreadsheet icon next to the input field to reflect changes in demand, planned increases, and so on.
Note: If one of these fields ‘No. of Transactions’ or ‘Average Transaction Amount’ is set to 0 for a certain month, your Sales Volume for this month will be 0 (because ‘Sales Volume’ = ‘No. of Transactions’ x ‘Average Transaction Amount’)
Minimum Fee
What is the Minimum Fee which you charge monthly, quarterly or yearly?
What is the average minimum fee which you charge your customers? Enter the amount and how often you charge this fee.
Transaction Fee
What is the average fee per transaction you charge to customers? You can charge a
You can apply both transaction fees at the same time so that they add up, or you can apply whichever is higher (e.g. you charge 1% but at least a minimum of $0.30 per transaction).
You can apply both transaction fees at the same time so that they add up, or you can apply whichever is higher (e.g. you charge 1% but at least a minimum of $0.30 per transaction).
Which fee per transaction in % do you charge for your service?
Enter the average fee in % you charge to customers based on the transaction amount (e.g. 1% of the transaction amount)? If you plan to vary your fee over the contract lifetime due planned changes, promotions, .., edit it using the spreadsheet icon next to the input field.
Which fixed fee per transaction do you charge for your service?
Enter the average fixed fee per transaction you charge to customers (e.g. $0.30 per transaction)?
If you plan to vary your fee over the contract lifetime due planned changes, promotions, .., edit it using the spreadsheet icon next to the input field.
Which transaction fees do you want to apply?
In case you are using both types of transactions fees, enter if you want to apply both fees or only the one which is higher?
Contract Duration and Churn
What is the average contract duration in months?
Enter how many months the average contract for One-Time or Pay Per Use Revenues typically runs. By default, a they occurs in only 1 months, i.e. the contract duration is set to 1 month.
Please note: For One-Time Revenues using the Fixed Lifetime Model, the Contract Duration can only be 1 Month
How many of your customers churn and do not renew their contracts?
What percentage of your existing customers will renew their contract after it expired? By default, the churn rate for One-Time and Pay-per-Use Revenues is set to 100%, i.e. all customers are one-off customers and they churn without renewing their contracts after the contract duration. If a share of your customers returns periodically - e.g. after 6 months 70% of your customers return - enter a contract duration of 6 months and a churn rate of 30% (i.e. 30% churn away, but 70% return)
We apply the churn rate to the customers which are due for renewal at the start of each period. If you plan to reduce your churn rate over time (that should be your objective), you can edit it using thespreadsheet icon next to the input field.Please note: The Churn Rate is always linked to the contract duration. 10% Customer Churn for a 1-Month Contract means that 10% of customer are churning every month and the average customer lifetime is 10 months. Whereas 10% Customer Churn for a 12-months contract means that 10% of customer are churning after 12 monthsr and the average customer lifetime is 10 years. To convert Churn Rates for different contract duration, you can convert them into a Monthly Churn Rate. An approximation is to divide by the Contract Duration. You can look up at the exact formula in our help center.
Billing & Cash Flow
What is the average billing period for your customer?
Enter the billing period. Is the customer billed "Monthly", "Quarterly" or "Yearly"? This has significant impact on the cash flow.
When is the invoice issued?
Enter when during the billing period, you issue the customer invoice. Is this “At the Start” or “At the End” of the Period? This has significant impact on the cash flow.
How much time does your customer have to pay the invoice?
Select the payment terms. How many days after the invoice was issued does your customer have to pay. This is when you should receive cash in your account. If customers pay by credit card, select "0 days" for immediate payment.
