GrowthObservation 0012 min read
4
Revenue is evidence, not an explanation.
A rising line proves something happened. It says nothing about why, whether it was worth it, or whether it will happen again.
Subscription Businesses
Subscriptions turn customer economics into a monthly test.
Market context
Market context
Subscription businesses report recurring revenue, but its value depends on cohort retention, discounting at sign-up and the cost of winning customers back.
Commercial pressures
- 01Sign-up discounts attracting customers who churn at full price.
- 02Win-back campaigns reacquiring the same customers repeatedly.
- 03Price increases that lift revenue and accelerate churn.
Customer economics questions
The questions leadership should be able to answer.
Q1
What is retention by acquisition cohort and offer?
Q2
How much revenue comes from customers reacquired after churning?
Q3
Where do price increases hold, and where do they drive cancellation?
Relevant capabilities
Where the work usually starts.
- 01Customer EconomicsUnderstand the quality and economics of the customers generating growth.Explore capability
Customer · Contribution · Repeat
- 03Revenue & PricingImprove revenue quality and capture more of the value being created.Explore capability
Transaction · Contribution
- 06Growth IntelligenceGive leadership the intelligence required to make better commercial decisions.Explore capability
The full chain
Illustrative commercial problem
Illustrative · Not a client example
Subscribers bought twice
Illustrative pattern. A subscription brand's win-back campaign performs well on reported cost per acquisition. A large share of 'new' subscribers are customers it had already acquired, and lost, once before.
Also in Consumer Services
Intelligence
Related thinking.
Customer EconomicsObservation 0022 min read
−14.6%
Growth is not the same thing as value.
A business can get bigger and weaker at the same time. The gap shows up first in the customers, not in the P&L.
Customer EconomicsObservation 0042 min read
1.2 : 1
The ratio that reads 3 to 1, and isn't.
An LTV:CAC ratio is only as good as the churn behind it. Replace assumed churn with observed churn and the green light can turn red.
A TCB engagement
10–15
Business days
Customer Economics Sprint
One commercial diagnosis and a clear 90-day path forward: the constraint identified, the economics diagnosed, the opportunity benchmarked and the intervention prioritized.
Bring the constraint.We'll give it direction.
Start with the commercial problem you're trying to solve. We'll identify the constraint, diagnose the economics, and determine whether there is a useful next step.
- 01Identify the constraint
- 02Diagnose the economics
- 03Recommend the right intervention
- 04Define the next move