Transitioning to a Subscription-based Business Model
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This document provides a checklist and guidance for companies transitioning to a subscription-based business model. It discusses key metrics around acquiring, retaining, and growing customers over the lifetime of the relationship. The presentation emphasizes automating customer experiences, segmenting customers based on risk levels, and engaging customers appropriately through the lifecycle. It also outlines the benefits partner organizations can provide around optimizing subscription revenue and processes.
Transitioning to a Subscription-based Business Model
- 1. Transi0oning to a Subscrip0on-‐based Business Model: A Checklist for Success hosted by:
- 2. Jon Ge@nger, SVP Marke0ng Ashley S0rrup, SVP Product and Solu0on Marke0ng hosted by:
- 3. Subscrip0on businesses by the numbers Subscrip0on businesses by the numbers 10 10% 3.1 3.1 100 6x Chance customers will become loyal if they are not loyal within Chance customers will become the first 90 days a8er provisioning loyal if they are not loyal within the first 90 days a8er provisioning Years before a customer become profitable Years before a customer becomes profitable Percent of profits from exis>ng customers for subscrip>on More expensive to acquire a new customer vs. renew an businesses exis>ng customers hosted by:
- 4. Subscrip0on customer lifecycle Acquire Retain • What is the right plan? • Is usage mee0ng expecta0on? • How to transi0on from free to paid? • Are customers comple0ng the on-‐ boarding and training? • What are your compliance and en0tlement policies? Renew Grow • What is the • What are the correla0on between upsell & cross-‐sell usage and price? opportuni0es? • What payment, pricing and terms are available? • What is the next best offer based on derived value? • Are customers seeing the full value of the offering? hosted by:
- 5. Metrics to measure performance throughout the lifecycle Acquire • Customer Acquisi0on Cost Ra0o (CACR) • Breakeven point • Free Trail Conversion Rate Retain • Cancela0on Reason Analysis • End User Adop0on • Usage Analy0cs Renew Grow • Renewal Rate • Upsell/Cross-‐Sell Rate • Churn Rate • Customer Renewal Cost Ra0on (CRCR) • Customer Life0me Value (CLV) • Conversion Reason Analysis hosted by:
- 6. Automa0ng the customer experience Acquire • On boarding • Service enablement • Coupon redemp0on Retain • Single view of your customers • Mul0ple plan offerings Renew Grow • Self service • Offer triggers • Assisted • Plan op0miza0on hosted by:
- 7. Ac0onable tasks based on segmenta0on High Risk HI • • • Immediate save play Adop0on plays / on-‐boarding plays High-‐touch customer engagement Moderate Risk MED • • • Iden0fy any specific factors (e.g. compe00on) Adop0on, training, or upsell plays Watch list with quarterly contact Low or Very Low Risk LOW • • • • Low-‐touch renewals play 120 days before expira0on Self-‐service op0ons with annual customer check-‐ins Cross-‐sell play Collect quan0ta0ve characteris0c data to confirm segmenta0on hosted by:
- 8. Automa0on vs. high-‐touch engagement Determine the best type of customer engagement based on: 8% • Usage • Subscrip0on value • Poten0al CLV • Health score by engaging with customers on a quarterly basis Consider role specializa@on based on business needs and complexity of your solu0on hosted by:
- 9. Current Recurring Revenue Alliance Members Recurring Sales Recurring Revenue Analy@cs Data & Integra@on hosted by:
- 10. How we can help Increase renewal rates and efficiency Op0mize subscrip0on revenue throughout the customer lifecycle 15pt improvement in renewal rates* 20% increase in sales produc0vity** Op>onal Maximize performance with our experts in customer success and renewal sales Best prac>ce process & industry benchmarking *Based on internal studies, companies who worked with ServiceSource reduced churn by an average of 9 points **ServiceSource internal study comparing sales produc>vity before and a8er using Renew OnDemand showed an average increase of 20% hosted by:
- 11. The Aria Difference Keep Customers Engaged • Delivering a consistent high quality customer experience • My informa0on always presented in context Make More Money Rela0onship Ac0ve Commerce Orchestra0on Single Customer View Enterprise Cloud • Op0mizing the life0me value of customer rela0onships • The business is growing and valued by Wall Street Adap0ve Selling Easier to Manage Solves Big Problems • It’s in the Cloud! • Pushes Informa0on • Handles scale and complexity, security, reliability, compliance • High Performance Opera0on • No rip and replace hosted by: All Contents © 2013 Aria Systems
- 12. Q&A hosted by: