This story was originally published in CIO Applications with the title “Zuora: Fueling the Subscription Economy”.
Zuora is one of the few companies to offer a SaaS platform for automating all subscription order-to-cash operations for businesses in real time. The firm brings forth a cloud-based subscription management platform that enables its clients to shift to recurring revenue models. In an interview with CIO Applications Europe, John Phillips, GM-Europe of Zuora, speaks about the proliferation of the “Subscription Economy”. He mentions that Zuora’s founder, Tien Tzuo, had a vision that in the days ahead the world would be “Subscribed” and every company will eventually transition to subscription business models.
Succinctly, take us through how businesses have evolved over the years and what uniqueness does Zuora bring to the market.
Through the last century, companies have operated primarily under a product-centric business model where the focus was to sell more units—more cars, more clothes, and computers. Today, consumers demand personalised, immediate, and flexible outcomes, as they are moving away from ownership models. This new paradigm, which we call the “Subscription Economy”, brings in a wide range of business models where products and services are wrapped around long-term customer relationships and can be priced based on the usage, consumption, and outcomes. While this shift started with software, it is now spreading to other industries such as manufacturing, utilities, telcos, consumer goods, and transportation. Zuora is explicitly architected for this type of dynamic, recurring subscription business model. Our solution functions as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-cash process, including billing and revenue recognition. It’s the new system of record for subscription businesses.
Give us an overview of the challenges faced by companies in the IoT space and help us understand how Zuora’s solutions address these challenges?
Today, companies embarking on IoT strategies face several challenges, but at the core of their monetisation strategy, they should be focused on rendering optimal customer services. They often seek a platform to control pricing scenarios without having to customise or create any additional SKUs. Flexibility also becomes a crucial factor when you are talking about changing pricing in days or weeks versus months or years. And over the last few years, many IoT businesses have moved from a traditional configure, quote, negotiate, price, and order-to cash system to more of a self-service solution. They are transforming from selling devices to building long-term service relationships with millions of consumers and businesses. These companies are monetising things such as usage, storage, contextual sharing, and aggregated data from connected machines. But this transformation brings several challenges: How do you price hardware versus services? How do you bundle for different categories of buyers? How do you innovate faster than the IoT market? The solution to these challenges lies in building out connected strategies. We support IoT companies such as Ford, Schneider Electric, and Centrica’s Hive through the implementation of successful connected strategies which result in faster go to market and increased subscriber loyalty. The Zuora platform helps our customers speed up the roll-out of new pricing and packaging, leverage customer data to make informed business decisions and increase customer satisfaction, and facilitate international commerce by means of secure payments, multiple currency support, automatic rating, and international tax compliance.
Can you elaborate on Zuora Central as the world’s only subscription order-to-cash platform?
How does it help companies to manage dynamic subscriber relationships and keep up with fast changing go-to-market strategies? Zuora Central is an all-in-one platform for your order-to-cash processes. It is like the connective tissue between CRM and ERP. This is an open platform which is 100 percent REST and easily connects all the applications in your order-to-cash ecosystem. Recognized by Forrester as a leader in The Forrester Wave (Recurring Customer And Billing Management, Q3 2017), our flagship products allow organisations to scale their billing operations by automating recurring invoices, applying realtime taxation, and calculating complex prorations. Zuora Central users can configure any subscription deal and quote for changes throughout the subscription lifecycle. Our customers can also further leverage pricing strategies to maximise customer lifetime value; configure automated dunning workflows; and automate the payment retry logic to prevent involuntary churn. Our platform also renders the metrics that our clients need to unlock new opportunities to drive their business, metrics like LTV, MRR, Net Retention, and Churn Rate. We also support the finance function by automating revenue management to meet compliance with the latest revenue standards and accelerating the time to close.
What relationship does Zuora share with its partners, and does the company plan to partner with any other major player in the vertical in future?
Zuora works with an ecosystem of partners that play a pivotal role in yielding end-to-end solutions for companies operating in the Subscription Economy. From consulting partners like Deloitte and Accenture who co-work with our customers along their digital transformation journey; technology partners that are building point solutions on our Connect platform; payment gateways like Worldpay, GoCardless or AmazonPay that enable flexible, global acquisition strategies… the Zuora solution sits at the heart of a network designed to help companies make the shift to the Subscription Economy.
Can you share a sample case study with us that demonstrates how Zuora has helped a customer to overcome business challenges and attain desired outcomes?
One of our clients is Hive, which is amongst the most prominent providers of smart home technology in Britain with more than 660,000 smart home hubs already installed throughout the country. Hive approached us for an order-to cash platform that could take it from a product-led solution to a suite of services. With Zuora Central, Hive got the operational support they needed to launch and monetise a full suite of services for their monthly subscribers. As a result of this shift from a product-led solution to an expanded suite of services, Hive’s official figures show a 70 percent surge in customers.