Success In The Subscription Economy - Brian Bell, CMO of Zuora
-
date post
14-Sep-2014 -
Category
Business
-
view
1.145 -
download
1
description
Transcript of Success In The Subscription Economy - Brian Bell, CMO of Zuora
1
Success in the Subscription Economy: Relationship-driven Businesses
B R I A N B E L L C H I E F M A R K E T I N G O F F I C E R , Z U O R A February 2013
2
3
What is the
3
By 2015, 35% of Global 2000 companies will generate revenue through subscription-based services and revenue models.
1999 Today
Subscription Economy?
BUY NOW SUBSCRIBE
4
Consumers Are Embracing The Subscription Economy
“This movement is inadvertently creating a new economic engine that has the potential to reorganize our economy” Sarah Horowitz, The Atlantic
• Designer ties - $11/month (Tie
Society) • Toys for Kids - $23/month (Spark Box) • Convenience – PRICELESS!
• Movies - $5/month (Netflix)
• Bikes - $10/month (Capital Bikes)
• Music - $5/month (spotify)
• Car - $30/month (zipcar)
SUBSCRIBE
5
The Tech Industry is Embracing The Subscription Economy
“The global market for SaaS will grow from $21.2 billion in 2011 to more than $92.8 billion in 2016”
Forrester
SUBSCRIBE
6
The Media Industry is Embracing The Subscription Economy
“By 2015, more than 40% of media and digital products companies around the world will use subscription services for their fulfillment, billing and renewals” Gartner
SUBSCRIBE
7
On Premise Giants Are Buying Their Way Into The Subscription Economy
To be replaced with a paid image
“Software giants face tough choices as their core businesses come under attack from pure SaaS players” Peter Golmacher, Cowen Group
IBM acquires DemandTec
SAP pays $3.4Bn for SuccessFactors
Oracle pays $1.4Bn for RightNow
HP takes on Amazon’s cloud services
SUBSCRIBE
8 8
Dollar Rubber Club
Condoms
Wonder Sitter
Baby Sitting
Babbaco
Kids Toys/Activities
Rent the Runway
Women’s Dresses
Bespoke Post
Luxury Items
Mystery Tackle Box
Fishing
Spice Guides
Date Idea
Spotify
Music
Businesses Can Subscribe To Anything
Test Tube
Beauty Samples
Workday
HR
Google Apps
Apps
Amazon
Infrastructure
Zendesk
Helpdesk
Intacct
GL
RingCentral
Phone System
Concur
Travel/Expense
Salesforce
CRM
ServCorp
Virtual Office
Consumers Can Subscribe To Anything
9
Why the Subscription Economy ?
Technology Trends
Smart Money Business Model Demand
Subscribe
10
The Subscription Economy Requires a Completely Different Approach to Building Businesses
Subscription Economy
Monetizing Customer Relationships
Pay-as-you-Go Pricing Plans
Multiple Orders Over a Lifetime
B2Any: Sell to Consumers & Businesses
Complex, Interrelated Bookings, Billings, & Revenue
This image cannot currently be displayed.
Sell Units
Forced to Pick a Customer Segment
Price Per Unit
One-Time Orders
Simple Financial Metrics
Product Economy
11
hasm
The Old World
The New World
12 CFO GM
Business Leaders Struggle With The Limitations Of Existing Systems
Why is it so hard to GROW my business
Why Can’t I Make My Processes FLOW Why Can’t I Find
What I Need to KNOW
COO VP of Sales
13
The Strategies Required to Grow a Subscription Business are Very Different
14
The Subscription Business Model Is Based Upon Long Term Recurring Relationships
Acquire New Relationships
Increase the Value of Your Relationships
Maintain Relationships
15
Packaging & Pricing Strategy
Acquire New Customers
Increase Value Per Customer
Reduce Churn
Launch First Product X
Add-on Options X
Monthly vs Annual Options
X X X
Higher Editions X X
Lower Editions X X
Product Bundles X
Pricing Tiers X X
Usage & Overage X X X
Multiple Currencies X X
Renewals X
Pricing Changes X X
Regional Pricing X
Pricing & Packaging Strategies Drive Growth
16
The Processes Required to Make a Subscription Business Flow are Very Different
17
Commerce
Billing
Finance
Book Order & Ship It
Invoice & Collect For It
Recognize It
Product Business
18
Subscription Business
Quote-To-Cash Renewals Payment Failures Account Suspension Amendments Account Management
19
Subscription Business
Commerce
Billing
Finance
20
What you Need to Know with a Subscription Business Model is Very Different
21
Traditional Income Statement
22
Revenue ARR
$0
$100
23
Subscription Economy Income Statement
ARR $100 Churn (10) Net ARR 90 COGS (20) G&A (10) R&D (20) Recurring Profit 40 Growth (40) Net New ARR 40 Ending ARR $130
Retention Rate
Growth Efficiency Index
Recurring Profit Margin
24
The Three Key Metrics of the Subscription Economy
ARR less Churn less Non-Growth
Spend
Recurring Profit Margin
How much of your ARR you
keep every year.
How much does it cost you to acquire $1 of
ACV
Retention Rate
Growth Efficiency
“ The metrics for Cloud computing is fairly different from traditional enterprise software. ” Bessemer Venture Partners – Top 10 Laws for Cloud Computing
25
But how do you run a customer focused company…
…with systems meant for the old world?
26
Your Systems Today
CRM ERP GL
27
I Need a System That Helps me Grow , Flow and Know in the Subscription Economy
28
An Integrated Relationship Business Management System
Service Rating & Billing
Secure PCI Payments
Billing & Payments History
Billing Consolidation
Taxation
Payment lifecycle mgmt
Accounting Periods
Accounting Close
Revenue Recognition
Aging Balances
Subscription Metrics
Reporting
Finance
Accounting & Finance
Billing
Billing Ops Commerce
Subscription Service Catalog
Flexible Pricing Models
Multi Channel Commerce
Cross and Upselling
Subscriber Renewals
Product Marketing
29
Plugs Into Your CRM and GL
30
Our Mission: Help you succeed in the Subscription Economy
FLOW: Run and flow your subscription business processes efficiently.
GROW: Build and grow your subscription business and revenue.
KNOW: Have the right metrics to optimize your subscription business.
Z-Business Helps You Grow, Flow and Know
31
N E W Y O R K W A S H I N G T O N D . C . R i t z C a r l t o n B u c k h e a d , A T L A N T A
March 6, 2013 5-9pm EST
http://www.subscribed.com/at.html
32