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Recurring Revenue – Easy or Difficult?

Recurring Revenue – Easy or Difficult?


From Products to Smooth Services

The World Economic Forum has anticipated that all products will have become services by the year 2030. This is quite a bold statement but as you look around we are heading towards an outcome economy at an increasing speed.

Take a look at for example the traffic and transportation industry, which is facing the biggest changes in the last 100 years. The strongest drivers are clearly visible: 

  • Urbanization
  • Environmental sustainability
  • Owning stuff is not that cool anymore
  • Everything should be easy and smooth

The two last points are quite strong in any industry.

What a great service should actually offer is to make things easier than before. Many digital services are succeeding because of a brilliant idea for easing daily life and diligent service design.

A right to use a service is usually defined with a contract or a subscription for recurring services with an agreed price schema and means to pay.

Trust is also needed for easy collaboration. This is achieved by securing both service delivery and payment in some ways. In business to business, trust is usually created before a contract is signed, but new means are evolving. Artificial intelligence and blockchain will have effects changing the future.

What to Consider with Recurring Revenue Business Model

Your recurring revenue customers are likely to expect flexibility in your service content and pricing schemes. You may be considering new business opportunities and looking to move towards a recurring revenue model. Here are some things to consider:

  • How is your service integrated with a customer contract? How is your service integrated into billing?
  • How flexible is it to change your services or charging models when needed?
  • Will the customers keep valuing fixed-price or should pay-per-use or pay-per-outcome comprise part of the pricing scheme?
  • Will standard packages or customer-specific sales packaging provide competitiveness?
  • How to remove all unnecessary manual work from the process? How to automate intelligently?

Järvileasing Showing a Shining Example

Back to the traffic, transportation, and mobility industry example with a customer case story:

Good Sign’s customer Järvileasing is a newcomer in car leasing. As a challenger, they had the option to start with fresh processes without any legacy. They designed the whole process meticulously from the customer's point of view while emphasizing end-to-end process efficiency, too.

  • Järvileasing's monetization model is recurring revenue which is not only a fixed monthly price but customer-specific variation as well. This is where Järvileasing implemented automated usage-based billing to supplement the monthly variable recurrence.
  • Contracts are constantly evolving and started to become hard to manage. This is where Järvileasing implemented digital contracts which are steering the service processes.
  • They also believe in transparency towards the customers and implemented a customer self-service with real-time data. Self-service is a selected role-based view into the same real-time data as used internally.

Recurring Revenue - Easy or Difficult?

In a fast-moving service business, combining billing and monetization tightly with the end-to-end service process is a key element to success.

This may be easy when offering a fixed-price service like Spotify but may be quite complex if your business has variation in contracts or customer-specific price elements, or when the price will vary based on actual usage.

New capabilities are required to be able to offer smart and demanding recurring revenue business models and processes.

This is why modern software like Good Sign's Billing and Monetization Software has been created to offer recurring revenue end-to-end digitalization capabilities.


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