The year-two renewal cliff nobody screenshots

The year-two renewal cliff nobody screenshots

Everyone shows you year one. Year two is where recurring goes to die.

An affiliate tracked a clean annual-plan cohort of 120 SaaS customers across 24 months:

— Year 1: 120 customers, $87 commission each = $10,440. Beautiful.
— Renewal at month 12: only 47% renewed (industry annual-renewal reality is often 40–60%).
— Year 2 commission: 56 customers x $87 = $4,872.
— Year 3 projected at the same rate: ~$2,280.

The "recurring" income halved, then halved again, with zero change in their effort. The base doesn't hold itself up; it erodes unless you keep feeding new cohorts in.

Recurring commission is a bucket with a hole sized to your churn rate. Stop pouring and it empties on a predictable schedule.

Model year two before you quit your job over year one.