👉 Subscriptions math involves calculating the total revenue generated from recurring payments made by customers over a specified period, typically monthly or annually. It's crucial for businesses to understand subscription models because it helps in forecasting income, managing cash flow, and planning for growth. The basic formula is straightforward: Total Revenue = Number of Subscriptions × Subscription Fee per Period. For example, if a company offers a $10/month subscription and has 1,000 subscribers, the monthly revenue would be $10,000. Over a year, this totals $120,000. Subscriptions math also considers factors like churn rate (the percentage of subscribers lost over time) and customer lifetime value to optimize pricing strategies and retention efforts.
