What Revenue Streams do 

The key concept in Lean-Case Projects are Revenue Streams. Revenue Streams can be connected to model the Customer Lifecycle, including how to:

  • create leads,
  • convert leads into paying customers and 
  • grow paying customers

Revenue Stream Components

Lean-Case Revenue Streams allow the modeling of

  • customer contracts with certain revenue types and contract terms,
  • forecast models to model traffic and pipeline volumes,
  • churn impacting the customer lifetime,
  • conversions rules to simulate upselling from one stream into another and
  • revenue-related costs 
  • to acquire customers (Cost of Customer Acquisition consisting of Cost of Selling, Cost of Marketing and Cost of Leads) and
  • to produce for, deliver to and support existing customers (Cost of Goods Sold)

Types of Revenue Streams

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 Lifecycles with its different type of revenues:

  • Funnel Streams to model the stages of the Get-Customer Phase with traffic and pipeline volume as well as  cost elements to model the stages in the sales funnel (e.g. leads, prospects, signups or free trials)
  • Subscription Revenue Streams to model paying customers who pay a subscription price to have access to a product or service. Subscriptions are typically paid by units, e.g. by user, server, ..
  • One-Time Revenue Streams to model paying customers who pay one-time for services such as consulting or buy products over a specific contract duration
  • Pay-Per Use Revenue Streams to model pay-per use revenues applying minimum revenues, $-fees to process transactions or %-fees as a percntage of sales volume

Fixed-Lifetime vs Generic-Lifetime

For Subscription Models and One-Time Models, Lean-Case supports two different types of customer lifetime models. These models simulate different types of customer cohorts (a customer cohort is simply a group of customers all signing up in the same month)

  • the Fixed-Lifetime Model (Data and Model can be exported to Excel) and
  • the Generic Lifetime Model (only Data can be exported to Excel). 

The Fixed-Lifetime Model is suitable when the sales volume of new customers in the first month of their contract increases over time, e.g. when a new customer signing up in February starts with a higher sales volume than a new customer who signed up in January (see example in figure below). Start of Contract Lifetime is fixed to the time when the customer signs up.


The Generic-Lifetime Model is suitable when the sales volume of new customers always starts at the same level, e.g. new customers signing up in January and February start with the same sales volume (actually have the same contracts over their lifetime). Contract Volumes follow a “Generic-Lifetime”.


Actually, both models deliver the same results as long as sales volumes (= units x price per unit) for customer contracts remain the same over time (i.e. there is no expansion of units and / or price).


Export Data and Export Models 

Can Data and Models of Lean-Case Projects be exported to Excel?

Lean-Case support two methods of export to Excel:

  • Data Export – all data for reports and charts created in Lean-Case Projects can be exported to Excel
  • Model Export – you can even export a fully functional (stand-alone, 5-year) Excel Model of your Lean-Case Project if you build your project only using Fixed Lifetime and Non-Paying Revenue Streams

Comparison

The table below summarizes the different revenue streams with their relevant features


Revenue Stream Model

Use when ..

How Sales Volume is calculated

Impact of Contract Duration and Churn
on Customer Lifetime

Export Options supported

Funnel Stream

.. Modelling funnel stages of non-paying customers (e.g. signups)

.

Customer Lifetime defined by Churn Rate

Data Export

Model Export

Subscription –
Fixed Lifetime

Sales volume of different customer cohorts increases

Avg. Price per Unit x Units

Note: both Subscription models deliver same results if price and units remain equal over time

Contract Duration defined by Billing Period Monthly/Quarterly/Yearly

Customer Lifetime defined by Churn Rate

Data Export

Model Export

Subscription – 
Generic Lifetime

Sales volume of different customer cohorts starts at same levels

Avg. Price per Unit x Units

Note: both Subscription models deliver same results if price and units remain equal over time

- Contract Duration defined by Billing Period Monthly/Quarterly/Yearly

- Customer Lifetime defined by Churn Rate

Data Export


One-Time 
Fixed Lifetime

Sales volume of different customer cohorts increases

Avg. Price per Unit x Units

Note: both One-Off models deliver same results if Contract Duration = 1 month and if price and units remain equal over time

Contract Duration limited to 1 month

 Lifetime determined by Contract Duration

Data Export

Model Export

One-Time –
Generic Lifetime

Sales volume of different customer cohorts starts at same levels

Avg. Price per Unit x Units

Note: both One-Off models deliver same results if Contract Duration = 1 month and if price and units remain equal over time

Contract Duration variable between 1 to 60 months

 Lifetime determined by Contract Duration

Data Export

Pay-Per-Use – Generic Lifetime

Sales volume of different customer cohorts starts at same levels

Combination of

- % Fee of Sales Volume

- Fixed Fee per Sales Transaction

- Minimum Fee

Contract Duration variable between 1 to 60 months

 Lifetime determined by Contract Duration

Data Export

Criteria to add a Revenue Stream

How to decide if you add one or more Revenue Streams to your Model?

  • If you have different revenue sources with different cost structures, it is wise to add separate Revenue Streams.  
  • If you have one revenue source with different customer types which have similar cost structures in terms of getting and keeping them, you can model them as part of one revenue stream (it is always possible to break them apart later).  







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