Pricing Leadership: models, contracts and long-term price health

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I'm learning "Pricing Leadership: models, contracts and long-term price health" on The Future Market. Lesson 1: "Subscription and retainer models".

What the lesson teaches:
- A subscription is a regular fee (monthly or yearly) for ongoing access or delivery. A retainer is a regular fee for a block of your time or a set of services (for example "up to 10 hours a month").
- Monthly recurring revenue (MRR) = the sum of the monthly fees of all active customers.
- Churn = the share of customers (or of MRR) lost in a period. A simple rule of thumb: average customer lifetime in months is about 1 divided by monthly churn. It is a rough guide, not a promise.
- CM still decides: CM per customer per month = price - variable cost - payment fee. Lifetime CM is about CM x lifetime in months. Compare it with what it cost you to win that customer.
- Pricing choices to make: the fee, what is included, a cap on use (hours, items, requests), the price of extras (overage) and whether a yearly plan gets a discount.
- A yearly prepay brings cash in earlier and gives fewer chances to cancel, but each month earns less CM. Do the numbers (below).
- Whatever you charge, advertise a price a customer can actually pay. In Canada, for example, mandatory fixed fees must be in the advertised price (drip pricing rules), and government taxes such as HST are the usual exception. Check your own country's advertising rules (see In your country in Lesson 5).

The exercise I'm working on:
Design one subscription or retainer for a real or practice business. Write the included items, cap, overage price, CM per month, a churn guess, lifetime CM and what a 10% yearly discount costs you.

I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.

I'm a parent helping my child (about 8 years old) with a lesson called "Subscription and retainer models" from the course "Pricing Leadership: models, contracts and long-term price health".

Here's what the lesson says:
A magazine you buy once is a single sale. A magazine that comes every month is a relationship. The shop gets paid again and again, but it also has to keep the reader happy, or the reader cancels. A subscription or retainer is a price for "keep helping me", not for "do one thing".

The activity:
Design one subscription or retainer for a real or practice business. Write the included items, cap, overage price, CM per month, a churn guess, lifetime CM and what a 10% yearly discount costs you.

Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.