At first, the Internet economy was very basic: pay for an item, get an item. But like all economics, the model eventually evolved. Now, more consumers pay for a subscription service, and big players like Netflix, Spotify and Amazon have dominated the space early. However, an increasing number of businesses across different industries are offering subscription services as well. In fact, the market has grown by more than 100 percent a year, increasing from $57 million in sales in 2011 to $2.6 billion in 2016. Businesses are entering an era of the subscription economy, and the enterprise software firm Zuora Inc. is at the forefront of the shift. Its cloud-based platform provides comprehensive subscription billing solutions that enable companies to compete effectively in the growing subscription sector.
How the Zuora Subscription Model Is Transforming Businesses
The rise of subscription-based services comes from the increasing consumer demand for more flexible consumption models. Static offers and one-time transactions are no longer enough. Because of this, companies are switching from the traditional pay-per-product model to the subscription model.
Tien Tzuo, founder and CEO of Zuora, coined the term “subscription economy” to describe this booming business landscape.
Both consumers and businesses benefit significantly from subscription billing solutions. Convenience, manageable pricing, and predictability are the main advantages for consumers. For businesses, aside from guaranteed recurring revenue, gains include better scaling, easy identification of buyer personas and various growth opportunities. Moreover, the subscription model allows better calculation of customer lifetime value, better inventory management, and more competitive pricing. Consequently, Fortune 500 giants who have realized how attractive these advantages are have adopted subscription billing platforms.
The subscription economy brings with it the demand for a completely distinctive approach to building businesses. Customer retention is prioritized over customer acquisition. Long-term relationships allow companies to capture more data on recurring behavior. These provide valuable insights that enable businesses to make more informed decisions on how to innovate and improve the customer experience.
According to Tzuo, such relationships lead to a sharper competitive advantage. “It’s easy to steal a product. It’s harder to steal the knowledge of your customers and relationships you have with them,” he writes in his book, “Subscribed: Why the Subscription Model Will Be Your Company’s Future—and What to Do About It”.
Choosing the Right Subscription Management System
To thrive in the subscription economy, businesses must grasp the power and competitive advantage that the right platform can provide. It can create new revenue opportunities, recover lost revenue and modify services in innovative ways.
An effective subscription management platform should allow easy adaption to rapid system changes. These include price adjustments, product stratification, and changing customer preference. It should also easily integrate with existing financial systems. Another consideration for choosing a subscription management system is its ability to streamline business processes. Needless to say, working with subscription billing platforms that lack agility and flexibility only adds unwarranted expense. Businesses must be quick, accessible and nimble. That’s what subscription billing systems need to be as well.
The Zuora billing system helps enterprises deliver a frictionless buying experience for customers and partners. The core platform acts as an intelligent management hub. It keeps track of subscription payments, invoices, pricing, product catalogs, and taxation. Zuora also offers reporting and analytics that provide access to customer demographics, behaviors, and financial performance. This scenario enables constant improvement of business results and enhanced development of subscriber relationships. Additionally, Zuora has an app development marketplace for customers that require third-party integrations.
Zuora steps ahead of the pack by providing relentlessly focused order-to-cash solutions. The company helps businesses rapidly transition to subscriber-centric, digitally-enabled business models.
Zuora: Powering the Subscription Economy Through Subscription Billing Platforms
Founded in 2007, Zuora is recognized as a leader in recurring customer and billing management. The firm currently serves more than 1,000 companies around the world. Clients include Ford, Zillow, General Electric and Hewlett Packard Enterprise, to name a few.
For years, Zuora and its CEO have been educating the business world about subscription billing solutions. Tzuo’s book serves as a definitive guide for how to succeed in the subscription economy.
Zuora also hosts a conference series called “Subscribed”. More than 10,000 people participate in the world-wide event each year to learn how to navigate the disruptive business model shift. The firm’s strong focus on thought leadership has made Zuora one of the biggest names in the subscription industry and software-as-a-service.
Zuora envisions a future where every business in the world will be part of the subscription economy. The company works towards achieving this goal by empowering businesses through its subscription management platform. Zuora’s bold vision is summed up with these words: “The World. Subscribed.”
Leveraging Subscription Billing Solutions to Gain Competitive Edge
Though a subscription model can be very lucrative, it has several challenges. The large volumes of data gathered can be difficult to handle. Customer information needs to be collected, aggregated and analyzed in real time. All of these can only be done with the right technological tools that go beyond average subscription billing solutions.
A comprehensive subscription management platform such as the Zuora billing system can allow businesses to manage renewals, upgrades and contract terminations successfully. It also provides the ability to harness the wealth of data offered by the model entirely. This fact is essential when the formula for growth is focused on monetizing long-term relationships. Subscription businesses that operate with superior technical execution can perform better against companies that employ less flexible subscription billing platforms. With fewer disruptions, businesses can focus more on improving their products or services. They are also able to attract more new customers and retain current subscribers.
Subscription services are transforming the way we buy and sell. Companies realize that flat, two-dimensional transactions will no longer work. Likewise, consumers continue to look for more dynamic means of acquiring products and services. “In the future, all aspects of our lives will be run by subscription services,” says Tzuo.
Read more about Tien Zuo in this bold leader spotlight profiling him.