Insights from Subscribed Connect London
Zuora’s “Subscribed Connect London” event brought together pioneers in the subscription industry to discuss dynamic sustainable growth and modern business strategies.
One of the event’s highlights was an insightful breakout session on the evolving priorities of modern finance and accounting leaders. During this session, we ventured into the changing roles and responsibilities of finance and discussed managing subscription changes at scale.
A major benefit of the subscription model is that a company can build a secure recurring revenue stream. And with businesses grappling with tighter budgets amid economic uncertainty, the rise of subscriptions has never been more apparent.
But this comes with its challenges for finance. In a subscription business, the customer pays upfront for the subscription period for services the company has not yet delivered. This deferred revenue is entered on the company’s balance sheet as a liability that the company must fulfill. Instead of tracking products sold, finance professionals are now tracking obligations, and as a result, many are dealing with added complexity.
In this session led by Dr. Alex White, Finance Director at Zuora, our panel explored the new responsibilities of a finance team in the subscription era. They discussed how finance professionals can embrace change for subscription business growth, proactively onboard the technology driving innovation, and much more!
Let’s dive into the pivotal takeaways and valuable insights from this session…
The pursuit of sustainable business growth strategies stands as an enduring goal for finance managers striving to navigate the complexities of the market. At the core of these strategies lies a delicate balance between capital allocation and risk management. Savvy finance leaders recognize how to spend money on the right things while navigating the intricate landscape of risk. This is a sentiment echoed by our panel:
“It’s about minimizing risk, but also allowing the business to go to market in different ways.” Em Daigle, GM of Zuora Revenue, Zuora
“It all focuses on capital allocation… making sure we’ve got the right capital and allocation in the business to keep the flywheel going.” Keith Underwood, Chief Financial and Operating Officer, The Guardian
It’s clear then, that a pivotal facet of sustainable growth is strategic investments in infrastructure. This encompasses not only technological advancements but also the fortification of operational processes. The rationale is clear – a resilient infrastructure not only bolsters immediate efficiency but also positions the company for adaptability and longevity in the face of evolving business dynamics.
Real-world lessons come to light in the Guardian Media Group’s digital transformation journey. Faced with the challenges of a shifting media landscape, the Guardian not only survived but thrived by evolving its business model. Emphasizing quality journalism and embracing digital platforms, the group navigated change without compromising their core values:
“The Guardian’s business model has evolved an awful lot over recent history. If you think back, we were effectively printing newspapers, putting them out to newsagents or newsstands and we didn’t know, or to some extent care who bought them. We then moved into a digital era where we implemented, at that time, quite a risky pioneering model of keeping the content free and inviting readers to basically make a contribution or to voluntarily subscribe. Despite the many doubters, this model actually generated tens of millions of revenue and we’ve now got over a million subscribers to that product alone. For me [this shows] it’s about making sure we’re investing in the right things, and being ruthlessly prioritized about the stuff that we’re going to try and do on relatively limited capital budgets.” Keith Underwood
During the panel discussion, an unwavering commitment to innovation and a readiness to embrace change emerged as crucial elements to success. The panelists also agreed that thinking about long term reliability holds a significant edge:
“It’s thinking about sustainability and how that’s radically shaping businesses. It’s also thinking about how we raise awareness more broadly around these topics.” David Wray, President, French CFO network
The transformative power of technology is reshaping the very core of finance functions. Platforms such as Zuora have emerged as a catalyst in empowering finance functions to navigate the intricacies of managing complex subscription models.
Zuora was used by the Guardian Media Group, to help them offer various subscription packages. Through the implementation of Zuora’s platform, the Guardian Media Group has not only optimized its subscription processes but has also gained the agility to manage a spectrum of subscription models effectively. This case underscores the practical application of technology in addressing the nuanced challenges faced by finance functions in subscription-oriented industries.
Moreover, technology reshapes customer focused strategies, allowing for a more personalized and targeted approach. Through sophisticated data analysis and customer relationship management tools, finance functions can better understand the diverse needs of their customer base.
“I think it’s just a really interesting aspect knowing that there are solutions out there that can help you ultimately know your audience.“ Em Daigle
This not only enhances customer satisfaction but also contributes to the development of more predictable revenue streams. According to Keith Underwood, this approach has led to much more reliable revenue for the business:
“For us, the revenues are more predictable than they’ve probably ever been.” Keith Underwood
In essence, the role of technology in transforming finance functions is a comprehensive journey that touches every aspect of financial management. From streamlining subscription models with platforms like Zuora to redefining priorities in capital allocation, risk mitigation, and customer segmentation, technology stands as a driving force in the evolution of finance management.
Finance managers need to balance predictability and flexibility in their revenue models. That means they need to be able to plan ahead while adapting to market changes.
One way to do this is by diversifying revenue streams. The breakout panel discussed how this can be made possible by offering various subscription tiers that cater to different customer preferences. Ranging from short-term, flexible plans to longer-term contracts with added benefits, this approach provides customers with choices while affording the board a level of revenue predictability. Flexibility in commitment levels aligns with the diverse needs of the customer base, fostering a dynamic yet structured revenue model.
The panel also discussed the importance of a data driven approach and knowing your users in order to gain predictability. By harnessing the power of data analytics to glean insights into customer behavior and preferences, the panel proposed that you can achieve a more sustainable and profitable business in the long run.
“I always say that for the first million we made online, they’re the people who are most aligned to our brand values. They are the people who we effectively didn’t have to convince that hard to subscribe. But when you get to the second and third million onwards, that’s when you need to be really sharp about understanding your customers, going through analytics and developing that really deep understanding of your customers so that you can offer real time offers.” Keith Underwood
The discussion then moved to ways in which businesses can remain agile and flexible. In a rapidly evolving business landscape, agile business models facilitate adjustments based on market dynamics and customer needs. Regularly reviewing subscription offerings and making agile adjustments means businesses can meet changing demands. This adaptive approach ensures that revenue models remain responsive to the ever-shifting dynamics of the market, allowing for sustained growth and resilience. To help finance professionals understand this, Emily Daigle recommends bringing teams together:
“I think having billing within the finance function allows the finance team to understand what the offerings are and how they impact the business going forward. Being able to have a holistic view from both a billing perspective and a revenue perspective allows you to basically decouple your forward-looking revenue recognition from your billing.” Em Daigle
David Wray, President, French CFO network, seconded this, saying:
“Most importantly, [this team setup] shows you what it means to retain a customer and how, if you’ve got the right subscription approach, you actually have a far lower erosion of those customers. That becomes very interesting.”
By threading these elements of diversified revenue, harmonious teams, and flexibility and innovation together, finance managers can navigate the dynamic landscape of modern revenue generation for enduring success.
The breakout session on the evolving priorities for modern finance and accounting leaders illuminated the critical intersection of strategic decision-making and transformative technologies. Insights shared during the session underscored the imperative for finance professionals to not only adapt but proactively lead in the face of dynamic market shifts.
The role of finance and accounting leaders has evolved into a dynamic role where they are pivotal drivers of strategic growth, harnessing the power of technology to propel their organizations into the future.
Zuora’s comprehensive solution provides finance leaders with the tools they need to navigate the complexities of the modern business landscape. By streamlining subscription-based revenue models and offering invaluable insights into customer behavior, Zuora empowers finance managers to make informed decisions, fostering long-term sustainability and growth.
Stay tuned for more updates and join us in our mission to redefine modern business in the era of recurring growth. Watch and share recordings of all the Subscribed Live keynotes, customer stories, and product demos from Subscribed Connect London here.
To discover how Zuora can help your business thrive, connect with one of our experts today.