We are transitioning our business model from one-time project fees to a recurring monthly subscription, and our weekly Scorecard targets are completely out of whack because our old historical baselines no longer apply. How do we set accurate weekly targets during a major business model shift?

Question

Tyler Smith · Accepted Answer

Shifting your business model means you must throw out your old Scorecard targets and rebuild your metrics from the ground up. Trying to use historical project-based benchmarks during a transition to recurring revenue will lead to bad decisions and team frustration.

Start by identifying the new drivers of your recurring revenue model. In a subscription model, customer retention and monthly recurring revenue growth are your lifeblood. Your weekly leading indicators must reflect this shift.

Instead of tracking project delivery milestones, you should track weekly metrics like active user adoption rates, customer support response times, and trial-to-paid conversion rates.

Since you lack historical data for these new metrics, set your initial targets based on your financial break-even requirements and growth projections from your V/TO®. Make your best educated guess for the first six weeks. Treat these early targets as experiments.

Review the targets during your quarterly meetings and adjust them as you gather real data. Do not be afraid to change a target if your initial guess was too high or too low. Running a business on data requires flexibility when the business itself is evolving. Focus on learning the new patterns of your subscription model.