2001! 2011
BUY NOW
By 2015, 35% of Global 2000 companies will generate revenue through subscription-based services and revenue models.
April 2011: Building a Strategy for the Subscription Economy
The World is Moving to a Subscription Economy
Can we show a globe with dots represen=ng the ci=es (or countries
colored in) where we have customers? Or even include past customers. Or even
include pipeline.
Also keep the quote
No reason to list # customers, I’ll speak to it
Zuora Receives £36m For European Expansion
It’s Spreading Around the Globe
100
90 93 91 95 98
94 96 97 97
0
25
50
75
100
Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13
“Got my answer in 7 minutes!”
Ruggero Ferreti ,
“Am very satisfied with the prompt responses to my query.
Gelai is very helpful ”
Nicoal Wylie,
“Lightning Fast!”
Jason Goodworth,
Technology Trends Smart Money Business Model Demand
Mobile
Social Businesses want to subscribe
to services
Consumers want to subscribe to services
Wall St. and Sand Hill Value Subscrip=on-‐Based
Companies
Cloud
Business Should Be Built on Stable Recurring Revenue
Graphic doesn’t speak to me. Plus it’s not up and to the right.
Win/Win Relationships One-time transactions
Better Businesses are Focused on
Sustainable, forward-looking revenue
Efficient, consumption- based services
Fair, value-based pricing
Backwards-looking financial reporting
Shipping unit after unit
Fixed, cost-plus pricing
Price 11%
Acquire 12%
Bill 14%
Collect 12%
Nurture 11%
Account 11%
Measure 9%
Iterate 11%
Scale 9%
Support Cases Categorized By 9 Things
Increase Cash Flow
Drive Down Cost of Sales
Outflank the competition
Grab Market Share
Increase Loyalty and Retention
Pivot into a new segment
Expand Internationally
The Ability to Price in support of your business goals
is the first Key for Success in the Subscription Economy
Billing
Gateways
fulfillment
provisioning
Immediate or delayed payment
Connect to CRM
Notify
Connect to accounting
Self service vs assisted flows
But it’s Harder Than It Seems
The Ability to Quickly Acquire Customers in a B2Any World
is the second Key for Success in the Subscription Economy
Confused customers
Weeks to generate bills
Billing Errors
Lost Revenue
1
2
3
4
Every bill is an interaction with your customer
“But I signed up for the $100/month plan”
The Ability to Create Accurate, Clear Invoices at Scale
is the third Key for Success in the Subscription Economy
Electronic payments Non-electronic payments
Credit Cards Debit Cards Wire transfers
Catch exceptions
Multiple card types Country specific
banking rules
Retries Card updaters
Manual Lockbox
Receive payment
Notify delinquents
Write off payment Reconcile Suspend service
The Ability to Tame the Complexity of Payments
is the fourth Key for Success in the Subscription Economy
Sign up
Validate CC Validated
Create Bill Process Payment
Create Account
Link Account
Confirm Sign Up
Welcome Email
Create Subscrip=on
Provision Service
WEB
SITE
BILLING
CRM
PLAT
FORM
The Ability to Nuture And Develop Deeper Customer
Relationships is the fifth Key for
Success in the Subscription Economy
The Ability to Easily and Quickly Account for
Bookings, Billings, Cash and Revenue is the sixth Key for
Success in the Subscription Economy
You used to track these metrics
Revenue $100 COGS (30) Gross Profit 70 Opera=ng Expenses S&M (20) G&A (10) R&D (20) Total Op Ex (50)
Net Income $20
Now you track these metrics
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
The Ability to Instantly Access
Subscription Economy Metrics is the seventh key for
Success in the Subscription Economy
The ability to Rapidly Iterate On Your Pricing and
Acquisition Strategies is the eighth key for
Success in the Subscription Economy
Why build all this into your service?
Pricing
Payments
Taxation
Billing
Rev Rec
Secure
Mission Critical
Scalable
Rating
Integrate with an ecosystem that supports your service
Customer support
Inventory
Fulfillment
EnJtlements
Website
Provisioning
Commerce
Billing
Finance
Payments
GL
quoJng
orders
invoices
checks
events
account status
account balance
metrics
The ability to Run on a Scalable, Reliable, Mission
Critical Infrastructure is the ninth key for
Success in the Subscription Economy
Join the RevoluJon
www.subscrip=onmanifesto.com via the Subscribed Mobile App via Manifesto signing sta=ons
#subscripJonmanifesto
Mobile App
Customer Lead Sessions Product Vision Keynote
Do not miss.
#subscribed13
Cocktail RecepJon
Zuora Demo Booth
Get your mobile app. Search your app store for “Subscribed”
Download
Accept push notifications for conference updates
#subscribed13