Ask the CEO: A Customer Day Q&A with Tien Tzuo

Welcome! We’re having an exciting Customer Day here at Zuora, gaining insights from the collective intelligence of our amazing community and learning more about new innovations from our amazing product team. As part of the event, our fearless Chief Customer Officer Tom Krackeler has taken the opportunity to round up some questions from our customers, which I was happy to answer.



What’s the number one thing that you’d really want our customers to take away from the keynotes and other events at Zuora’s Customer Day?

I’m incredibly excited about the Journey to Usership. I know it’s a new concept for people, but I want our customers to know that we worked on the framework for a long time and then vetted it with a huge range of customers and industry leaders. It really came from what we’ve been hearing for years: “You’ve got great technology, but we need more help.” The Journey to Usership was designed to help customers understand what they need to do to succeed in the Subscription Economy: by industry, by department, by stage of growth. It’s designed for our customers to use themselves, and it’s also for our own teams to use to help our customers grow and succeed.

How does the Journey To Usership model build on what you wrote about in your book, Subscribed?

The Journey to Usership goes deeper, which is what all the companies we’ve been working with have asked for. How can I learn more about creating my offerings? How can I create an amazing experience for my subscribers? How do I think about my business operations? The great thing is that no matter where you are in the journey, no matter what you’re looking to do, it’s a blueprint and a set of resources that can help you be successful.

It’s been a decade since you coined the term Subscription Economy. What’s changed since then—and how would you describe it now? 

When we originally coined the term, we definitely got a lot of funny looks. A lot of people said, “Why would I subscribe to something I could own?” We spent a lot of time trying to help people understand the power of the subscription business model outside of the software sector because we believed that any industry could be completely transformed with the subscription model.

Over the last decade, we’ve been proven right. The Subscription Economy has grown, even more so in the past 18 months as the pandemic forced all of us to think bigger about where we need to go. With all the disruptions we’ve seen to physical supply chains, stores and so on, people are seeing the power of the subscription model now more than ever. One reason is the resiliency of the recurring revenue model. But the more important reason is that when you have a digital relationship with your customer, you can stay connected to them no matter what’s happening in the world. That’s incredibly powerful. 

How can the Journey to Usership help media companies deliver a subscriber experience that works for a global audience?

What’s happening in the media industry has truly been amazing. Just seven or eight years ago, there was a fear that there was no way to monetize digital media. Yes, you could sell physical newspapers and magazines, but everyone wanted their digital content free. But since then, we’ve had a transformation. The industry realized that it’s not selling a product or an article. It’s helping people figure out what’s going on in the world, and people want a brand they trust to do that. So a company like Bloomberg realizes they can do that better—and reach more people—in digital than they can in print. So the first thing I would say for reaching a global audience is that people are looking for the service and your brand is universal. Of course there’s a set of operational things you have to think about when you go global—different payment methods, taxes, pricing and packaging your offerings for different regions. The Journey to Usership can help with those more tactical things.

What differences do you see in subscription B2B business model adoption—particularly in traditional industries—versus B2C?

There used to be this idea that the subscription economy was really just for digital services. But as more physical products are becoming connected to the internet (IoT), the same revolution we saw in software and media is happening in the physical world. If you buy an appliance, if you buy a car, if you buy a medical device, it’s connected to the internet. 

In the B2B sector, we’re seeing the same thing. Just like we want the services in our personal lives (where would we be without Netflix?!), B2B buyers want services, too. And there’s a tremendous growth opportunity now to say, look, we have the brand, we have the customers, we have the engineering know-how. We can use our digital capabilities to pivot to subscription services and build a growth business that can actually eclipse the old product business. And I’ll say it again: it’s not a switch you flip; it’s a journey. 

Lately, you’ve been wrapping a lot of strategic services and strategic resources around your core product. Why are you going in this direction?

It used to be that when you sold a product, you were on the hook for making that product work, and it was on the customer to figure out how to use your product to achieve the outcomes they wanted. In the subscription economy, that just doesn’t fly anymore. The customer’s actually looking for an outcome. And the same is true for our own business. When we look at our customers, the outcomes they’re looking for are growth, innovation, a tighter relationship with their customers, and becoming more competitive in their industry. 

So while we realized that while our product—our technology—is a really important part of the equation, our customers need more from us to reach their goals. They want to be able to talk to other companies that are going through the same thing. They want frameworks that give them guidance on all kinds of things. Should they should do A or B? Should they do a 30-day trial or a 12-month trial? And in a free trial, should they take the credit card up front or not? How should they package and price their product?

We wanted a way to share our knowledge—and our customers’ knowledge—and so we’re doing two things. The first is the Subscribed Institute, which is a membership organization of the best companies in the world that are trying to figure out the subscription-based business model. 

The second thing we’ve done is create the Subscribed Strategy Group, run by Amy Konary, which creates more tailored solutions to help our customers make better decisions. 

What are you most excited about coming out of Zuora in the year ahead?

We’re really focused on the subscriber experience because it’s so critical to a subscription company’s success. It used to be that a company would invest in making their retail space—or even their online store—a great shopping experience. But now, companies are having to make the day-to-day experience of using a service special. We feel it when we use Netflix; we feel it when we use Instacart. Because we manage so much of that experience—taking the orders, sending out the invoices, doing the collections of the payments, automating some of the back office functions like revenue recognition—it’s really important.

We’re now seeing that we have an opportunity to take our capabilities and continue to help companies own and optimize more and more of that overall subscriber experience. It could be helping their customers get more use out of the product or enhancing renewals or finding different ways to bring new customers in. We want to take a greater role in helping companies design a great subscriber experience that goes beyond just billing, collections, and revenue recognition. 

How do you see Zuora’s future in terms of growth in the coming years and what will that mean for Zuora’s  current customers?

We have one vision, which is The World Subscribed. We believe that a world driven by the Subscription Economy is simply a better world: better for customers, better for vendors and service providers, better for the economy, and better for the world because it’s a more sustainable business model. Our growth is really predicated on the growth of the Subscription Economy, and the last year of growth was pretty amazing. Look at Zoom, Hubspot, or Clear—we’re seeing the Subscription Economy explode. This is the direction people are headed.

So we’re really investing with the expectation that these trends will continue. We’re investing in scalability and in performance and technology infrastructure. But we’re also investing in concepts like the Journey to Usership and in our Customer Day event to help us keep up with the growth of the subscription economy.


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