Subscribed started as “Customer Day” with just 200 people. Seven years later, here we are at Subscribed 2018 with 2000 attendees—not to mention the 10 thousand attendees who attend our conferences worldwide from New York to Melbourne to Tokyo to London.
And Zuora, as a company, has kept pace, growing exponentially. To date, we have 29K end users, our customers manage 95 million subscriptions and manage 7.2 billion in quarterly invoice volume with 172 million invoices processed annually.
Phew! We’ve come a long way in 10 years. And, in fact, a whole lot has changed in these past 10 years.
That shift was the focus of today’s opening keynote.
In 10 short years, we’ve changed the way we see the world. Businesses used to see products, not people. Products were sold and customers bought. This was the era of ownership. But then companies had the courage to see the world in a new way, seeing people not purchases, and delivering outcomes, not products.
In short we’ve seen the end of ownership and the rise of usership. And we call this the Subscription Economy.
Subscribed 2018 transported us from 10 years back to 10 years into the future.
From Dell EMC and The Street in our opening keynote to a closing panel on the End of Car Ownership and a discussion with Mitch Lowe, CEO of MoviePass—and 40+ sessions in between—today was full of best practices, inspiration, and practical insights.
Here are just a few highlights from a great day of content:
On the Subscription Economy
“The Subscribed community has shown that the Subscription Economy isn’t just about a $10/month subscription but a whole different way of thinking about business models. Business isn’t just about having a cool product and selling as many units as you can. Now it all starts with the subscriber.” – Tien Tzuo, CEO, Zuora @tientzuo
On the end of ownership
“You looked at your businesses and you didn’t just see things but the people behind the things: what they wanted, what they needed, what inspired them. What we value is access over ownership, experiences over assets. This is what digital transformation is about: this end of ownership. And this unlocks growth.” – Tien Tzuo, CEO, Zuora @tientzuo
“The auto industry is in a tough spot. You’re in a margin business: manufacturing. And you face new businesses with recurring revenue models. The real invention is how do you escape the whole paradigm business model and not be left behind.” – Scott Painter, Founder and CEO, Fair.com @FairTheApp @TheScottPainter
“There are almost 1.5 billion cars on planet. We spend a lot to keep them. And they’re mostly under-utilized. Cars lose a lot of their value over the first 4 years of their existence. This means that we’re losing the equity in our cars when we buy them. Our simple idea is to bring well-established marketplace model to cars. There’s a tremendous amount of supply that’s underutilized. If we can help people trust one another, and make it easy for people to share their cars, we’re going to be adding that underutilized asset back into the market.” Andre Haddad, CEO, Turo, @turo
“It’s less about buying and selling cars and more about providing transportation. It’s about global miles traveled. Shift from being a maker of car models to being a provider of transportation. We’re working to develop that 1:1 relationship with customers and understand the economics.” – Chris Donus, President and COO, Silvercar @chrisdonus @silvercar
On sustaining growth
“The average percent of revenue from existing customers has been increasing over the last 5 years. 70% of revenue comes from upsells, cross-sells, and renewals.” – Dr. Carl Gold, Chief Data Scientist, author of the SEI, Zuora
“Companies where subscribers are making more changes are growing faster than companies that aren’t.” – Dr. Carl Gold, Chief Data Scientist, author of the SEI, Zuora
“You need usage-based billing to be just right with 1-50% of revenue coming from usage. This gives customers the flexibility to scale usage while staying grounded.” – Dr. Carl Gold, Chief Data Scientist, author of the SEI, Zuora
“Our customers are saying it’s harder to sustain growth. Change is hard…that’s what they’re saying. Specifically handling changes to subscriptions is hard. But companies need to understand how to manage changes.” – JJ Xia, Director Product Marketing, Zuora @jjxia
“The first 10 years was about growth through acquisition. The next 10 years needs to be about growth through expansions.” – Tien Tzuo, CEO, Zuora @tientzuo
“Companies are struggling. They are wondering how to apply technology to meet their business objectives. After getting all the low hanging fruit, what do you do next?” – Amy Konary, VP Customer Business Innovation, Zuora @mizkonary
On providing value
“If you as a company are still struggling to articulate the value that your subscriptions are providing to customers…then I can pretty much guarantee you’re not providing it.” – Amy Konary, VP Customer Business Innovation, Zuora @mizkonary
“We saw customers asking for more flexibility: pay with growth, pay as you go. And we were putting brakes on our sales org because we couldn’t manage this. But then we decided to embrace the x as a service – make everything as a service. We stopped staying no in the back office and starting embracing the billing option, the usage-based billing model, recognizing revenue in the way that customers wanted to make purchases.” – Thomas Austin, VP Corporate Finance, Dell EMC
“Why is it getting harder to sustain growth? The answer is the customer: the divinely discontent customer. They don’t want to wait on line. They want full transparency and control. Their expectations are always going up. They don’t just want their needs met; they want you to anticipate their needs. And this new divinely discontent customer is all of us.” – Tien Tzuo, CEO, Zuora @tientzuo
“When you get big, you still have to stay close to your customers.” – Mitch Lowe, CEO MoviePass @mitch__lowe @MoviePass
“What is our mission? What are we trying to deliver? Each team needs to have the same view. This is what needs to drive us every day in delivering on our mission to our subscribers.” – Margaret de Luna, President, The Street @TheStreet
“Implementations are a journey. When you’re going on a journey you have to think about who you need to take on the journey with you and where you are aiming to get to.” – Julie Hodge Engagement Manager, Zuora @JulieHodge
“When it comes to implementations, the leading do-over mistake is not thinking in terms of how is this going to affect the entire organization.” Rebecca Jaynes, Engagement Manager, Zuora
“Our mistake with implementation was that we didn’t engage with all the right people and didn’t collaborate with them. What workflows need to change. How does this affect the teams? What will success look like.” – Brian Grieb, Product Manager, Hudl, @bgrieb1 @hudl
“Invoices are an interaction with your subscriber so how can you use this to have more and better interactions with your customer?” – Kristin Hagan, Senior Director, ISV Partners, Zuora
“Payments is very complicated business. That’s why it’s highly regulated.” – Trevor Rubel, CEO, Merchant eSolutions, @MeSPayments @trubel9
“It’s challenging in high-volume businesses to optimize payment capture capabilities to prevent revenue loss. You do that by managing costs, and limiting attrition.” – Amanda Olsen, Senior Partner Manager, Zuora
“In the last 5 years, it’s become harder to do business. Consumers used to pay in whatever method the merchant wanted them to do so. Today consumers have all of the power. They’ll do business with any provider if they’re easier to do business with. They expect every merchant to take their preferred method of payment.” – Tyler Heun, VP – Global Enterprise Solutions Merchant Services, JP Morgan Corporate & Investment Bank Chase Paymentech @jpmorganchase
“Reconciliation is one of those things that nobody wants to do but everyone has to do it.” – Sidney Ong, Manager, Enterprise Applications, Zoom @zoom_us
“We may have had a good retention outcome this year, but a huge chunk of customers weren’t even up for a renewal. They may be a ticking time bomb when they do come up for renewal. It’s worth keeping an eye on.” – Nick Robin, Director, SP&A, box @BoxHQ
“Churn kills. So you need to watch for warning signs…but for signs of success as well.” – Ed Shaughnessy, CFO Logicmonitor @LogicMonitor @eshaughnessy30
On subscription metrics
“A lot of subscription metrics are about relationships. How do you measure the ongoing health of that relationship. Are we sustaining that? Are we growing that?” – Parveen Nandal, VP FP&A
We really should just design metrics that incentivize customers to use and get value out of the things they want to do rather than to find a correlated metric.” – Kevin Kooi, Director, FP&A, Intercom @intercom
You want to increase your customers’ success, maximize values, and improve internal company agility – all this is leading companies to take a much more fluid approach to pricing.” – Alex Prokhorenko, Product Director, Zuora
“The beauty of subscriptions is that people want to take advantage of the value.” – Mitch Lowe, CEO MoviePass @mitch__lowe @MoviePass
“Everything you’re doing in your business is used to drive a particular type of customer to a pricing page, or to justify a price to a customer.” – Patrick Campbell, Co-Founder & CEO, ProfitWell, @Patticus @profitwell
“ARPU the same for 4 straight quarters? You have a pricing problem.” – Patrick Campbell, Co-Founder & CEO, ProfitWell, @Patticus @profitwell
“This thing called price is really, really important. It’s a mistake to keep pricing static. Every company goes through changes of growth. Pricing needs to evolve as the company evolves.” – Kyle Poyar, Senior Director of Market Strategy, OpenView Venture Partners @poyark @OpenViewVenture
“Are your support teams and client sales teams overwhelmed by ‘what is this thing on my invoice?’ … this means pricing is too complicated, and your sales team is having difficulties describing what they’re selling.” – Mark Khavkin, Vice President, Finance, Pantheon Platform @getpantheon
“Find a pricing model that works, study it, find the data. Is this the right model? Is the retention rate what you want it to be? If it is not, did you test it?” – Kai Ichikawa, Vice President, Product Marketing, UserTesting @kai_ichikawa @usertesting
On rev rec and ASC 606
“You [those in revenue operation roles working for companies slow to move away from manual processes] for the past decade or so have been underserved by technology. There has been some short-term thinking when it comes to the investing in tools and systems that will help you do your jobs.” – Monika Saha, VP & GM, Product, Zuora @MonikaSaha
“This last year has been all about making our customers successful on ASC 606 IFRS 15. Every day we keep waking up in the morning and thinking what’s next. What can we do to get our customers to the next level? You’ve seen the biggest change happening in the accounting and you’ve embraced this change, but this is just the beginning. The next two years will be about making RevPro a self-driving system. This is what we are thinking every day when we wake up.” – Jagan Reddy, SVP, RevPro Products, Zuora
“Is it variable consideration or optional goods and services? You need to know the answer to this question before you can fully adopt ASC 606.” – Jacob Sperry, Director of Technical Accounting, Connor Group @Connorgp
“When creating new product offerings, get into a conversation early about how it’s going to impact your revenue recognition. Understand what’s changing. You need to think about billing, SSP, Ts & Cs in your contracts, how to process data and get it into your systems.” -Roxanne Brady, Partner, Connor Group @Connorgp
On leadership and innovation
“Adapting your leadership style is the most important pattern for steering your company through digital transformation.” R. Ray Wang, Principal Analyst, Founder & Chairman, Constellation Research @rwang0 @constellationr
“If you’re driving in control, you’re probably not driving fast enough.” – Didi Dayton, VP WW Channels and Alliances, Cylance @cylanceday1 @cylanceinc
“Old school economies spend more time protecting their current business then innovating.” – Mitch Lowe, CEO MoviePass @mitch__lowe @MoviePass
Stay tuned for more great insights from day 2 of Subscribed 2018.
And, in the meantime, if you’re looking for more great content and best practices for the Subscription Economy, check out Zuora Academy.