THE WORLD IS SHIFTING TO A NEW KIND OF BUSINESS MODEL

The way people buy has changed for good. It’s time for your business to change with them.

80%

of customers are
demanding new
consumption models

The Economist, 2014

80%

50%

of people in France are
moving away from
traditional ownership

– Institut Fracais D’opinion
Publique (IFOP)

80%

80%

of German companies
have dealt with the issue
of subscription
business models.

– IDG Research Services

80%

$420B

spent on subscriptions
in the US in 2015, up
from $215B in 2000.

– Credit Suisse

80%

WE NOW LIVE IN A SUBSCRIPTION ECONOMY

Success means engaging your customers in long-term relationships

At the heart of the Subscription Economy is the idea that customers are happier subscribing to the outcomes they want, when they want them, rather than purchasing a product with the burden of ownership.

Customers have changed. They’re looking for new ways to engage with businesses. Consumers today have a new set of expectations. They want outcomes, not ownership. Customization, not generalization. Constant improvement, not planned obsoleteness.

The result? Businesses are changing the way they sell their products and services. Over the past 9 years, we’ve seen an explosion of new types of business models all designed to keep customers consistently engaged in long-term relationships—think Netflix, Amazon Prime, Uber, Spotify, Salesforce, Zendesk, Box.

The Subscription Economy is a phrase (coined by our CEO, Tien Tzuo) to describe this new era of companies and business models.

In the old world (let’s call it the Product Economy) it was all about things. Acquiring new customers, shipping commodities, billing for one-time transactions. But in this new era, it’s all about relationships. More and more customers are becoming subscribers because subscription experiences built around services meet consumers’ needs better than the static offerings or a single product.

We All Want The Subscription Experience

Focusing on relationships requires a new way of thinking. Rather than placing your focus on the “product” or the “transaction,” Subscription Economy companies live and die by their ability to focus on the customer. The formula for growth is lies in delivering multi-channel experiences and services (that get better over time)

So as a business in the Subscription Economy, your focus is on retaining existing subscribers, monitoring usage, accounting for recurring revenue, finding new ways to deliver ongoing value to your customers that will build long-term loyalty.

It’s worthwhile to note that shifting to subscriptions isn’t just good for subscribers. Subscription models create predictable, recurring revenue streams that Wall Street and your Board will love just as much as you do.

So just to recap: The Subscription Economy is a new era with a new imperative for all companies—turn your customers into subscribers. Doing this will establish a mutually beneficial relationship for everyone involved.

Welcome to the new world of happy business.

– medium article –

The Subscription Economy

A Business Transformation

by Tien Tzuo, CEO and Co-Founder of Zuora.

dig in

– report –

MGI Research Forecast on Subscription Economy SaaS Tools 2016-2020

get the report