Subscription Economy on the Rise: A Business Point of View

In the modern milieu, subscription business is the new gold rush. Thanks to the advent of a certain subscription economy, subscription billings and bookings have undergone revolutionary changes in recent times. Today, not only do customers have multiple service options to choose from, but businesses can also fall back on subscription revenue models for predictable and recurring revenue streams.

Let’s take a real-world example.

Imagine a day in the life of a typical consumer, Bob. Bob starts his day by quickly scanning headlines on his subscription news app. He then proceeds to pay his weekly fee for online grocery delivery. Next, it would be time for scheduling the day’s workout and meal plans on a health monitoring application. After this, he would dash for office on a subscription-based shuttle car.

No wonder, in today’s age of digitization, subscription models are everywhere.

Dawn of the Subscription Economy

This term coined by enterprise software company Zuora aptly captures the essence in which conventional pay-per-product services are increasingly shifting toward subscription-based revenue models. The subscription economy has disrupted the traditional way of doing business by paying close attention to how the modern consumer buys. So from streaming to healthcare to SaaS industries and beyond, subscription billing business has become today’s new normal.

And, digital technology has been its catalyst. Businesses can now swiftly process recurring payments without making colossal investments. In the wake of the subscription revenue model, exponential scale has become a reality. R&D is practically free; you just need to continually analyze the consumers’ behavioral patterns. Such servitization makes your business customer-centric leading to better engagements and higher margins in the long-run. So there are good reasons why you should modernize your subscription business as the iron has never been hotter.

However on the flip side, this also means that there are multiple players in the field today – often for similar products/services – competing against each other for grabbing (and retaining) the user’s attention.

In such a scenario, what can you possibly do to make your subscription business stand out?

Think Like Your Customer: Turn Users into Subscribers

The hallmark of a robust subscription revenue model lies in its value propositions. What would you like your existing and potential subscribers to think about your offerings?

The modern consumer is represented by a cohort of smart millennials. They continually compare experiences across the large number of monopolistic offerings. This behavior has in fact given rise to a class of ‘serial switchers’ – consumers who change brand preferences after a few bad interactions.

So to win the customer, you have to think like the customer. Read about these 7 great ways to sell subscription to millennials.

Consistency in the following areas can help in long-term retention:

  • Customer analytics – When consumers get used to agile and seamless subscriptions, they value them as a part of their daily lives. You need to fuse real-time data with AI and predictive analytics to keep on delivering up to the consumers’ expectations.
    Effective subscription management platforms can achieve this easily by maintaining a clean master data set procured by streamlining customer data with field telemetry, social intelligence, and real-time customer feedback.
  • Seamless experience – The subscription economy rides on the back of rich CX. Your software application needs to plug in a hassle-free CX – right from onboarding, adoption, retention, renewal, expansion to contextual recommendations.
    According to Harvard Business Review, a new customer acquisition is 5-25% costlier than retaining an existing one. So it is important that you expand your subscription business not only extensively by getting new subscribers, but also intensively by caring for the existing ones, and for this, stellar customer service is key.
  • Sustainable pricing – Subscribers can stop sticking around if you offer the same bundle of services as your competitor but at a higher price. This often triggers the infamous race to the bottom, where competitors try to undercut each other in terms of price while forgetting about quality altogether.
    The pricing must be profitable for you, but sustainable for your customers. The right assistance during your quote-2-cash process can help you in scaling up just right.
  • Cohesive KPIs – Effective customer management reflects in consistent KPIs. Opt for an enterprise solution that facilitates timely dashboards backed by product utilization, quality, and support metrics. Results must be easily interpretable for your technical and non-technical teams alike for measuring results across the value chain.
    Similarly, it is also important that your dashboard is customized as per your business needs. For instance, support-side metrics can be customer effort, tickets, time-to-resolution, survey scores, service requests, etc. Product and business metrics should also be monitored.
  • Robust architecture – All subscription models that succeed have one thing in common: they are in constant touch with their customers. Outdated legacy processes can often create a roadblock between you and your target segment. A digital transformation in terms of upgrading to a modern operating environment can streamline your traditional information silos.
    With a 360-degree view of real-time customer data, you would be empowered to address your customers’ concerns firsthand – and even predict their next move. With time, you will be also able to pair up your customer success teams with your sales team to promote cross-selling.

Stay Ahead of the Curve with Zuora CoE

Zuora Founder & CEO, Tien Tzuo, coined the term ‘Subscription Economy’ back in 2007. He then went on to build a highly acclaimed subscription management platform that can power any form of subscription business and solve the respective subscription billing structure, no matter how complex.

Grow your subscription business with a world-class subscription management and solution partner.

Estuate is Zuora’s Most Trusted Implementation Partner

In the realm of subscription economy, we offer the following customized services to businesses:

  • Advisory consultation
  • Zuora implementation & integration
  • Subscription billing & operation supervision
  • Quote-2-cash management

Our technical know-how in and around the subscription market reflects in our consistent KPIs. We leverage our in-house Zuora certified consultants to drive insightful decisions for businesses.

  • 380+ successful implementations
  • 250+ person-years of experience
  • 15+ innovative accelerators
  • Vast cross-industry expertise
  • Consistently high CSAT

So if you are looking to take your subscription business to the next level, we’re right here to help.


What’s your take on the subscription economy? Do you think it’s here to stay?

Is Blockchain the future of Retail?

Blockchain is turning out to be the biggest technology revolution of the decade. This article digs deeper into the concept of Blockchain and explains why it is a game-changer for the retail industry.

Blockchain and Bitcoin have been the biggest buzzwords in the market lately. There have been massive investments in Bitcoins at a breathtaking pace worldwide. It is today one of the most popular and widely explored financial instruments, with a global market value worth $8,409 as of April, 2018. However, despite the huge worldwide spending on Blockchains and Bitcoins, many of us still have our doubts and questions.

This article tries to simplify the whole concept of Blockchain and brings out its use cases beyond money transfer, especially in the retail industry.

What is this Blockchain? Blockchain is the technology behind Bitcoin. In simple words, Blockchain is a ledger or record of digital transactions; each record known as a “Block”. It is a distributed database that maintains a continuously growing list of data records, known as a “Chain”.

So, who can use Blockchain? Blockchain is an open source network of computers connected to carry out digital transactions using virtual currency like Bitcoins; so practically anybody with an internet connection can use Blockchain.

And how does it work? Let’s assume A wants to send some money to B digitally. He communicates the intention through to a peer-to-peer network using a Public Key. He adds money to a digital wallet (say Bitcoin) and allows the money to be sent using an encrypted (protected) digital signature. Once this information is received by the computers in the connected network, they verify and validate the transaction. Once approved, the money is moved to B.

But why all the hype? Blockchain is a revolutionary technology that is reshaping the world of finance. One of the prime reasons for its popularity is the fact that it is an open source technology that brings transparency to financial transactions. It reduces the possibility of fraud to a great extent. Also, it is a convenient and faster mode of carrying out transactions, compared to regular banking, which has its own limitations.

Is there more to it than money transfer? Absolutely! The Blockchain technology runs the world of cryptocurrency. But, it has several other uses beyond digital currency transfer. Some of the key industries, including banking, insurance, supply chain management, healthcare and retail are using Blockchain extensively for varied purposes.

How is Blockchain impacting Retail?
Blockchain is significantly changing the face of Retail. The retail industry is getting digitized every day with technology seeping into all its critical aspects. Here are 4 ways in which Blockchain is hugely influencing the retail industry.

Authenticity
Since consumers today do not settle for less, Blockchain helps retailers establish authenticity of their products in the market. The Chain system allows retailers to track down the product right from the point it was manufactured. It gives a clear picture of what materials were used, what steps went into producing a product and what measures were taken in the packaging too. Especially in an e-commerce set up, where consumers make a purchase only after a thorough research of a product, Blockchain ensures retailers offer only quality products to their customers.

Logistics
Whether it is a bulk order or single product, Blockchain is widely being used to track product shipment. Every logistical stage of a product’s journey including the information on who handled it, where and when in real time it is being transported can be visualized. It also results in reduced loss and damage of goods. Consumers too can track the movement of products they ordered online through mobile applications.

Payments
As mentioned before in this article, Blockchain enables easy, secure and fast payments. Retailers are using Blockchain to accept Bitcoin or Cryptocurrency payments, allowing them to carry out international transactions effectively. They are also widely using Blockchain to procure goods from overseas and make hassle-free, easy payments to global vendors.

Proof of Ownership
One of the biggest advantages of using Blockchain in retail is the fact that it establishes a proof of ownership, reducing the possibility of theft and misplacing of retail products. By tracking product information from the source of manufacture, till the point it reaches the end user, Blockchain allows retailers to ensure that the product reaches the rightful consumer through a proper channel of delivery, leading to improved customer satisfaction and branding.

The Blockchain market is growing at an alarming rate, and is expected to soar to $20 billion by 2025. It is one of the most disruptive technologies of the decade, and is here to stay for many more decades to come. How long until you embrace Blockchain to drive your business and achieve significant tangible benefits?

Why modernize your subscription business?

Managing subscriptions the old-school way in the modern world? Discover the multiple benefits of a modern subscription management platform.

The subscription economy is a constantly evolving space. Compared to the subscription models in the past, which were restricted to magazines, newspapers, utilities and telecommunication services, the number of subscription offerings has grown exponentially today.

The worldwide subscription market is growing at 200% annually. Technology has brought about a sea change in the way subscriptions are managed and recurring billings are monetized. More and more businesses are digitizing their subscription activities.

Have you been planning to modernize your subscription business as well? Here are 6 ways a modern subscription management platform will help you scale up your business performance.

Ecommerce Engagement
Now subscription businesses are entering the world of e-commerce through web-based subscription sites and mobile applications. Online stores allow businesses to generate more leads, offer products and services, engage customers, and introduce new product lines effectively. This trend of incorporating e-commerce features in subscription models results in a win-win situation for both business owners and customers.

Personalized Offerings
Technology has made subscription businesses highly flexible. Now you can offer weekly, monthly, or annual subscriptions for your products and services based on customer preferences. Also, it is much easier today to cancel, renew or upgrade subscriptions anytime. By automating subscription management, you don’t have to worry about keeping a track of your customer’s preferences or changes in plans. It results in higher customer satisfaction as well as simplicity in operations.

Faster Quote-to-Cash
Traditional subscription models involve lengthy and time-consuming processes to convert order to cash. Modern subscription management solutions automate your Quote-to-Cash process and eliminate the manual steps involved therein. It helps you manage orders and leverage workflows effectively, joining the dots from order to cash faster, eventually enabling faster revenue recognition.

Seamless Subscription Billing
New-age subscription models are designed to manage recurring billings effectively within a single platform. Automated subscription management helps you generate invoices, notify customers, deduct payments and customize subscriptions as required. Also, they allow you to manage a range of product categories and billing cycles effortlessly with end-to-end subscription management features.

Improved Payment Mechanisms
Gone are the days when you lost revenues because of failed payment mechanisms. Modern subscription platforms help you monetize your recurring billings and manage revenues effectively. Today, you can introduce multiple payment options and adopt more efficient payment gateways. You can also notify your customers immediately when a payment has failed and reprocess failed transactions in time.

Enhanced Analytics
Traditional subscription models lack a mechanism of tracking day-to-day operations and analyzing business performance. With the best practices in subscription management, you can generate custom reports, measure performance of individual product lines and improve decision making. With advanced analytics, you can channelize your marketing strategies and improve performance to achieve business goals efficiently.

Digitization is everywhere and the subscription economy is no exception. Your old-school subscription management platforms might not be competent enough to perform well under changing business scenarios. The key to survival in this era of digital transformation is to keep upgrading with time by adopting latest technologies and best practices in subscription management.

7 great ways to sell subscription to millennials

We live in a world where millennials form a major chunk of the consumer centric market. They’re technologically savvy and financially smart.  They prefer access to ownership and crave for convenience. And that’s why they’re totally attracted to subscription models. Today, 92% millennials have active subscriptions.

As much as they love subscribing for stuff, they’re not easy to please. With tons of similar products all around, attracting millennials to subscribe for you is a tough nut to crack. Moreover, with so many overwhelming alternatives, especially with ecommerce sites, it is difficult to ensure loyalty from a millennial for a long time. And, they come with extremely high expectations. They will not settle for anything ordinary. You have to be on your toes to keep them happy with your service.

However, bring value to the table, and they’ll be your most loyal and long term customers. In this article, we’ll discuss the 7 best ways to sell subscription to millennials.

1.     Offer value, not just a product or service

The consumer today is not impressed by what you’re selling, but by how your product or service is going to benefit him. Bring out the value for money in your offerings. Design a customer avatar, your ideal target market and define how he can benefit with your subscription. The more benefits or solutions you can offer, the more irresistible it is to subscribe for you.

2. Build relationships instead of pitching for sale

Building relationships is the best strategy in closing successful, long term sales. It becomes more crucial in a subscription business, because you want your customers to stick around. Millennials are too smart to avoid sales pitches. So if you want them to subscribe and stay loyal to you, do not rush to close the sale. Instead, take time to build a connection and then make your move.

3.     Flexible pricing options

Millennials seek convenience everywhere. They want flexible pricing options, custom payment methods, multiple billing frequencies, and everything that suits their convenience. To satisfy the needs of the millennial generation, offer different price plans and convenient billing cycles. Companies like Netflix and Zipcar follow flexible pricing strategy to keep their customers satisfied.

4.     Smart advertising on social media

The youth today wakes up to social media and feeds on it. Social media platforms like Facebook, Twitter, Instagram are huge influencers. To boost your subscription business, you must have some social media presence. Smart and unique advertising on social media attracts a massive customer base, most of which are millennials.

5.     Easy renewals and updates

Today’s generation is time poor. It’s all about giving them an effortless experience while they sit back and enjoy your service. Make it easier for your customers to renew, update and upgrade to their subscriptions. You can go for a good subscription management software that will take care of all renewals, upgrades and cancellations effectively.

6.     Give away freebies

Give your millennial customers the privilege to use your products and services free of charge for a limited period. Let them try it before they buy it. If they love your product or service, there are thin chances that they would stop using it. Many businesses like Mailchimp and Amazon have significantly profited by adopting a freemium strategy.

7.     Focus on customer service

In a world where customers are flooded with alternatives for almost all services, the last thing you want to do is turn them off with poor customer support. Make sure your customer support team is capable of resolving customer complaints effectively, offer valuable suggestions and engage them in meaningful conversations. At the end of the day, the customer needs to be happy with you.

Millennial customers are intelligent, curious and cautious shoppers. They will only spend their time and money where they get the value they expect. Studies reveal that by 2020, the expected turnover from millennials is going to be over $2.4 trillion. Your subscription business can certainly soar high if you succeed in attracting millennial customers and continue to deliver excellent service in the long run.

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