Sometimes when a customer signs up for a subscription plan, there is a specific, corresponding cost incurred to the business. Often this is the result of data connections or usage-based pricing agreements with other SaaS companies (that you use to provide your own service).
To model these costs, Summit now has a "Per Customer Cost (Recurring)" event type under the "Product" category.
Events of this type can be attached to subscription plans. When subscribers sign up for these plans, these costs will increase automatically, and decrease automatically as subscribers churn.
Knowing how these costs scale is the key to negotiating fair rates with vendors and managing margins on a software business with real costs attached.
Here's an example of attaching these costs.
The percentages can be used to show that not everyone that signs up for this plan causes this cost to exist. In the above example, only half of our subscribers to this plan cause us to incur a Codat Connection charge, for example.
These costs will automatically appear in your financial model output as separate line items, like so:
Of course, attaching costs like this is totally optional, as some subscriptions are pure margin.
However, for many of us, this new event type will allow us to model our software margins much more accurately.