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11 Types of Recurring Revenue

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Recurring revenue is revenue that is likely to reoccur on a regular basis such as monthly or annually. The following are common examples.

Rent

Rental income such as a property rental based on a contract that may span a year or more.

Leasing

Equipment and vehicle leasing.

Advertising

Certain types of advertising contract such as billboard leasing.

Service Contracts

Services that require a contractual obligation such as a consulting contract.

Service Subscriptions

Services that freely allow customers to cancel at any time but nonetheless represent recurring revenue as cancellations are relatively low. For example, a streaming media service that allows customers to cancel at any time may see cancellations of less than 1% a month.

Product Subscriptions

Product subscriptions such as an ecommerce site that offers recurring purchases. For example, a business might order basic office supplies on a recurring basis to simplify reordering.

Content Subscriptions

Content subscriptions such as an online newspaper that requires a membership.

Support Contracts

In some cases, a product is sold on a non-recurring basis with support services that are recurring. For example, software that has both an upfront cost and an annual support fee.

Vendor Lock-in

Customers who become dependent on your products or services such that they find it very difficult to switch. For example, a cloud computing platform may allow customers to stop using the service instantly. However, many customers will offer predictable revenue streams as they become dependent on the technologies offered by the vendor such as platforms and APIs.

Razor & Blades

A product that requires regular consumables such as printers & ink.

Customer Loyalty

Loyal customers who make predictable purchases might be considered recurring revenue. For example, a restaurant that buys its bread from your bread shop each morning.

Notes

The term recurring revenue implies a high certainty that revenue will reoccur with predictable frequency such as daily, weekly, monthly or yearly. As such, regular purchases with an uncertain pattern aren't usually considered recurring.
Overview: Recurring Revenue
Type
Definition
Revenue that is likely to reoccur on a regular basis.
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