Revenue Models

Different revenue models behave differently and require different leadership: subscription, transactional, usage-based, services and hybrid.

Different revenue models behave differently and require different leadership. Subscription / SaaS revenue is recurring and forecasted on ARR / MRR with attention to NRR and churn. Transactional revenue is recognised on each sale and forecasted on volume and average selling price. Usage-based revenue is consumption-driven and forecasted on adoption and expansion. Services revenue is project-based with utilisation and margin as primary levers. Hybrid models combine multiples of these.

Knowing your model dictates your sales motion (PLG, SLG, hybrid), your pricing, your compensation design and the metrics you optimise for. A subscription business with a transactional comp plan will incentivise the wrong behaviours; a usage-based business measuring success on closed-won ACV will miss the actual revenue trajectory.