Recurring versus one-time: modelling a year
Two programs can pay the same in month one and differ by a factor of five by month twelve. The difference is retention, and it is the number most partners never model.
Build the twelve-month view
Take a recurring program: 20 percent of a 200 dollar monthly subscription is 40 dollars a month per customer. If a customer stays a year and you bring in two a month from month three, the base compounds while a one-time bounty does not.
A 900 dollar one-off bounty looks stronger in month one and flattens immediately. Neither is better in the abstract; they are different shapes of income.
- Recurring: back-loaded, compounding, sensitive to churn.
- One-time: front-loaded, flat, sensitive to your pipeline.
- Hybrid: pays for the effort now and keeps paying if the account sticks.
Apply your own churn assumption
Ask the program for a retention figure or a rough monthly churn number. If nobody will say, assume five percent monthly, which means half the base is gone inside a year.
Then run the model with your real close rate. A recurring program that pays 40 dollars a month only beats a 900 dollar bounty if you can close consistently and the customer stays long enough.
Choose by cash need
If you need money this quarter, take the bounty and treat the recurring program as the long position. If you have runway, recurring wins almost every time because the same introduction keeps paying without new work.
Never run both badly. Pick one motion per month and give it a fair test.
TAKEAWAYS
- Model commission over twelve months, not over one deal.
- Ask for churn; assume five percent monthly if nobody answers.
- Match the shape of the income to your cash needs.