As we near the end of the Subscribed World Tour, we made an important stop in Munich: “Deutschland Bekommt Es Auch” (“Germany gets it”) as Amy Konary, VP Customer Business Innovation and Chair of the Subscribed Institute at Zuora, put it in her keynote address.
With such an impressive economy and region known for meticulous engineering, it’s no surprise that Germany is becoming a breeding ground for innovation.
The agenda kicked off using the mobility industry to illustrate how companies can reimagine their businesses to succeed in the Subscription Economy by “thinking big, starting small, and moving fast”.
Renault Credit International (RCI), AMAG Group, Namics (a Merkle Company) and MHP (a Porsche Company) offered insight into their efforts to focus on providing valuable, ongoing services to customers, ultimately aligning with preferences toward access over ownership.
Whilst MHP set the scene by sharing how customer segments in the car industry are completely shifting, leading to new opportunities to think about and serve the market, AMAG offered an overview of how they are making the most of that with their new service, Clyde. In partnership with Namics, AMAG was able to take their new subscription brand to market in just 6 weeks. They took a “green field” approach, staying away from existing systems to launch with just 3 sprints and 15 people! Now they are able to test the market and learn directly from their customers. In fact, they even personally called all of their subscribers to get direct feedback so they could iterate on their pricing, their bundling and additional value-added services. As the CFO of Contentful, Markus Harder, explained: “Don’t be afraid to let your customer’s success define your own success” – a strategy that has helped them double their revenues year on year.
The agenda then focused on the growth strategies subscription businesses can leverage once they’ve launched their new service.. Schneider Electric explained that their customers are now asking for solutions that make their factories more sustainable and carbon neutral – desires beyond particular new features for their machines. “We empower all to make the most of their energy and resources, ensuring ‘LIFE IS ON’ everywhere, for everyone, at every moment,” said Marc Lafond, VP IOT and Digital Officer at the company. To truly be “customer first”, Schneider needed to charge for usage, naturally leading them to the Subscription Economy. Now, they estimate that 35% of their revenues will be subscription generated in the next 5 years.
In keeping with the theme of “usership”, Lafond was later joined by another manufacturing powerhouse, Siemens Healthineers, who are moving from “selling boxes to pay-per-use”. The company’s Head of Strategy and Innovation, Thomas Hummel, said: “The healthcare industry is complex: who pays, who uses… We need to combine the need to build and service expensive machines with the rise of digital services, you need to marry the two, you can’t have one without the other…Over time you learn what is valuable – what is worth putting in the premium model, for example.” They stressed that iteration is pivotal throughout the process, not just at launch. “The challenge is balancing the application of the right technology and tools with the right mindset and culture”. Florian Rachny, CFO at Befund24, agreed, explaining that “you can’t achieve scale with manual processes.”
Subscribed Munich was a huge success and very insightful for everyone involved.
Of course, we owe a huge thanks to our partners, Accenture and Deloitte for guiding our customers through these growth strategies, as well as our sponsors GoCardless, Digital Route, Slimpay, Avalara, Keylight, Adyen, and Namics, for fueling this growing ecosystem!