Put all three models on a common basis
Prerequisites, sequence and stop points
- Define the same customer job, entitlement and 12-month comparison horizon. (not complete)
- Separate one-time delivery cost from recurring service, support and update obligations. (not complete)
- Record payment dates separately from recognised contribution for the chosen decision view. (not complete)
- Label retention, renewal and bundle attachment as assumptions rather than customer facts. (not complete)
- State cancellation, change and scope boundaries for local review. (not complete)
- For a rental-versus-sale case, align the same asset-access job, utilisation unit, comparison period, maintenance scope, downtime boundary and recovery/residual assumption. (not complete)
- Keep financing, depreciation, tax and legal treatment outside the comparison unless separately verified for the relevant market and business. (not complete)
- Stop if one option hides continuing obligations or uses a different customer job. (not complete)
Compare subscription, one-off and bundle conditions symmetrically
| Criterion | Subscription | One-off | Bundle |
|---|---|---|---|
| Value recurrence | Continuing entitlement must be explicit | Value delivered without assumed renewal | Component and combined value both named |
| Cost recurrence | Service, support and updates recur | Continuing support remains visible if promised | Each component and bundle-specific cost is retained |
| Cash timing | Cadence-specific receipts | Upfront or stated events | Component or combined payment events |
| Uncertainty | Retention is an assumption | Repeat purchase is an assumption | Attachment and cannibalisation are assumptions |
| Pure-versus-mixed bundle criterion | Not a bundle: one recurring entitlement | Not a bundle: one separately sold entitlement | Pure bundle only when components are offered solely together; mixed bundle when the same components are also offered separately on the same boundary |
| Component boundary | Keep the recurring entitlement and obligations explicit | Keep the standalone entitlement and obligations explicit | Record each component’s standalone availability, price and cost before comparing the combined offer |
| Decision | No automatic winner | No automatic winner | No automatic winner |
Work one seller-side 12-month scenario
Labelled scenario
Use user-entered delivery, service and support amounts. Keep raw contribution and cash timing in separate rows and do not extrapolate an infinite customer life.
| Case or record | Inputs and arithmetic | Interpretation |
|---|---|---|
| Subscription cash timing | 120 CU received each month for 12 months when the labelled full-horizon retention case holds; total receipts 1,440 CU | Monthly retention is an assumption; use the cadence planner for cohort and timing analysis |
| Subscription raw contribution | 1,440 CU receipts − 300 CU initial delivery − (45 CU monthly service/support × 12) = 600 CU | Finite 12-month contribution only; not LTV or a demand forecast |
| One-off cash timing and raw contribution | 1,200 CU received at the initial event; 1,200 − 300 CU delivery − (20 CU continuing support × 12) = 660 CU | The continuing promise remains visible; the single receipt is not inherently preferable |
| Bundle cash timing and raw contribution | 1,350 CU received at the bundle event; 1,350 − 500 CU component delivery − 150 CU bundle support = 700 CU | Attachment and component demand are unevidenced assumptions; use the bundle planner before acting |
| No-winner boundary | 600 CU, 660 CU and 700 CU are raw stated-case contributions with different cash and obligation patterns | Do not rank the models until entitlement, retention, attachment, support and local-law boundaries are evidenced |
| Comparison field | Rental case | Sale case | Evidence or stop condition |
|---|---|---|---|
| Revenue timing | Entered upfront and repeating receipts for the declared rental period | Entered sale receipt and any separately promised continuing receipts | Stop if payment timing or period differs |
| Utilisation | User-entered rental cycles or productive units in the period | One transferred asset-access unit on the same customer-job boundary | No utilisation or demand forecast |
| Service and maintenance | Seller-retained delivery, inspection, maintenance and support costs | Seller-retained handover, warranty-support or separately promised service costs | Use current operating records; no universal rate |
| Downtime | Entered unavailable time and lost productive units | Entered pre-sale preparation or post-sale obligation time | No failure-rate assumption |
| Recovery or residual | User-entered recovery, reuse or residual scenario at the period end | No seller residual unless a documented return or recovery right remains | Stop if condition, timing or ownership boundary is unclear |
| Working-capital timing | Asset cash outlay, repeating receipts and retained operating cash events | Asset cash outlay, sale receipt and continuing seller cash events | Compare dated cash events separately from contribution |
| Risk retained by seller | Entered maintenance, downtime, recovery and utilisation exposures | Only obligations explicitly retained after sale | Obtain separate legal, tax or accounting review where required |
Choose the exact calculator for the unresolved question
Use the calculation owner for the next step
- Target Margin & Pricing Planner
Set a price for a target gross margin
- Annual vs Monthly Plan Planner
Compare upfront annual cash and contribution with a retention-weighted monthly subscription cohort
- Product Bundle Pricing & Profit Planner
Choose bundle pricing after fulfilment, payment fees and attach-rate effects
- Recurring Support Plan Pricing Planner
Price recurring customer support
Questions and limitations
- Which model is most profitable?
- There is no universal answer. Use the same cost boundary and horizon, then test each option’s assumptions in its registered planner.
- Can subscription value be projected forever?
- No. Use a finite horizon and explicit retention cases; do not use an infinite-LTV shortcut.
Sources and scope
- Optimal bundle pricing under correlated valuations — International Journal of Industrial Organization: Model evidence that bundle outcomes depend on assumptions; not a universal winner.
- Component versus bundle pricing — Journal of Business Research: Experimental context only; no general recommendation.
- Subscription or perpetual licence research model — arXiv: Corroborative model, not outcome authority.