Subscribed Paris 2018 was hosted at La Maison de Mutualite—an historic monument in Paris, the site of significant congresses and events. It was a perfect site for this year’s historic Subscribed Paris in which we reflected back on the last 10 years of the Subscription Economy and looked ahead to the future, while celebrating our ever-growing Subscribed community throughout Europe.
And the Subscription Economy does indeed continue to grow. According to the Subscription Economy Index, over the last six years, subscription businesses grew revenues 5 to 9x faster than the S&P 500!
And Europe in particular is growing really fast. In fact, the EMEA sub-index of the SEI is growing six time faster than companies represented by the FTSE (London), CAC (Paris) and DAX (Berlin) stock indices.
We see success story after success story across Europe: businesses which have transformed from selling products to selling services. For example, Royal Canin went from a pet food products to a holistic service. SNCF, an age-old transportation company that is battling competition from new ride-sharing services through subscriptions, shifted from rides to mobility. Visiomed launched their new digital “personal health assistant,” in response to the changing needs of its customers, introducing connected health products to help people and doctors better manage health. Bic moved from selling razors to providing a service that solves a problem.
This year’s Subscribed Paris continued our tradition of featuring some of the most forward-thinking and exciting European companies sharing their innovations around digital transformation, including ALE International, BayBridgeDigital, Schneider Electric, Doctolib, ValueIn, Roland Berger, Cegid, DXC Technology, OpenClassrooms, SNCF, Homly You, and more.
For those of you who missed the event, or want to relive the excitement, here are some highlights from an exciting day of keynotes, breakouts, and our inaugural Paris Subscribed Institute.
10 YEARS OF THE SUBSCRIPTION ECONOMY
“In the 10 years since Zuora was founded, we’ve explored, we’ve innovated, we’ve created, we’ve learned. We introduced the idea of the “Subscription Economy” – the idea that it’s not about just “renting” stuff but a whole new way of thinking about business and business models. And over the last 10 years, we’ve seen this shift play out in sector after sector: Tech, Manufacturing, Media, Retail. Transportation. And we’ve seen how the Subscription Economy changes everything: how you build product, how you market, how you sell, how you think about finance.” – Tien Tzuo, CEO of Zuora
“We discovered that at the heart of this new model, is the central idea of FREEDOM, that the reason we love subscriptions like Amazon Prime, Netflix, Salesforce, is that they give us freedom: to access what we want and release ourselves from the shackles of product ownership.” – Tien Tzuo, CEO of Zuora
END OF OWNERSHIP, RISE OF USERSHIP
“This new focus on subscribers over products has led to a sea change….We are witnessing the End of Ownership and the rise of Usership!” – Tien Tzuo, CEO Zuora
“We now live in a world where we value access over ownership, experiences over assets. We don’t want to be owners, but users. This is the essence of digital transformation.” – Tien Tzuo, CEO Zuora
“The future is not about products, but about people. See your customers and recognize that the future is about delivering the outcomes that they’re looking for. Start with their needs.” – Tien Tzuo, CEO of Zuora
ZUORA PRODUCT: ZUORA CENTRAL, ORDER MANAGEMENT, REVPRO, AND ZUORA COLLECT
“In order to deliver business freedom, new technology is required: an agile solution for dynamic pricing and packaging, an end-to-end solution that can flex to dynamic subscriber needs over the entire subscription lifecycle. But legacy technology is not dynamic.” – Tien Tzuo, CEO of Zuora
“Companies across industries and geographies told us that the hardest part about subscription business models is handling subscription changes. Customers are making more and more changes to their existing subscriptions. And all of these changes begin with the order. Instead of just capturing new sales, you need order management to capture a large volume of subscription changes.” – JJ Xia, Director of Product Marketing at Zuora
“Sales loves subscription changes. Upsells, cross-sells, renewals and all subscription changes drive growth. Finance hates subscription changes. Subscription changes are hard.” – JJ Xia, Director of Product Marketing at Zuora
“The poor customer is stuck between all of this complexity when they want to just make a change to an order. We’ve heard stories where a customers had to wait an average of 21 days for an order to be processed because it was so difficult for a finance team.” – JJ Xia, Director of Product Marketing at Zuora
“Transforming the business model is great for the business, but it creates unscalable issues for revenue operations. Revenue accounting teams are growing exponentially and they’re very difficult to scale.” – Tom Krackeler, SVP Products at Zuora
“Finance teams live in spreadsheets forever and never scale. Finance leaders need a way to systematically recognize revenue. As a revenue accountant, you don’t want to be a victim of the contracts; you want to be a business driver.” – Jagan Reddy, SVP of RevPro at Zuora
SUBSCRIPTION ECONOMY GROWTH PREDICTIONS
“Companies whose subscribers are making the most changes are growing the fastest. If you have 1 changes for every 10 subscriptions, growth doubles. And churn is reduced by 25%. When there are even more changes – average of 1 changes for every subscription – those companies have 3x the growth and churn is reduced by 25%.” – Carl Gold, Chief Data Scientist, Zuora
“Companies that use usage based billing grow faster, but there is a tipping point. With less than 50% of revenue comes from usage-based billing is where we see the biggest growth. Companies need to shift to usage-based pricing model to optimize how much they grow in the subscription economy.” – Carl Gold, Chief Data Scientist, Zuora
TECHNOLOGY FOR THE SUBSCRIPTION ECONOMY
“The new world of business is about agility, not scale. I suspect that everyone of your companies is going through org changes because businesses used to be about functional silos. But that doesn’t work anymore. Now companies are talking about more cross-functional teams. They need to operate in a cross-functional worlds and be agile to meet the changing needs of customers.” – Tien Tzuo, CEO, Zuora
SUBSCRIPTION TRANSFORMATION & GROWTH
“We see 8 core subscription growth strategies: high-volume self service, usage pricing, new editions, expand to enterprise, assisted sales, strategic acquisitions, drive upsells and cross-sells, expand internationally. Successful companies do all of these over time.” – Tien Tzuo, CEO, Zuora
“To transform your portfolio, the first thing to do is think in terms of topline. The core strategies are: repackage to recurring, bringing more value to the product with additional services; connected services, don’t change your product but add value that customers will appreciate; product-as-a-service, a combination of the two.” – Jean-Michel Cagin, Senior Partner, Roland Berger
“Everything about transformation is difficult. You all have your cash cow that you want to protect. But when that happens, your cash cow can become a sacred cow…and we all know what happened to that sacred cow.” – Jean-Michel Cagin, Senior Partner, Roland Berger
“When you move away from ownership, from assets like cars that sit idle over 90% of the time, server capacity that sits unused, conspicuous consumption, planned obsolescence — it turns out that when you remove these things, you unlock growth.” – Tien Tzuo, CEO Zuora
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