1. Home
  2. WEBchat
  3. Tips

How to keep growing despite economic impact of the Global Pandemic: use subscription business model

The latest Zuora Report shows that 4 of 5 subscriptions companies are still growing despite the economic impact of the Global Pandemic:

Robbie Baxter, author of The Forever Transaction on recurring/subscription payments explains why they are so important. In this discussion she reviews:

1.  Why Everyone Wants to Do Subscriptions: why it covers all sorts of B2C as well as B2B organisations

2.  The Financial Benefits of Subscription: predictable recurring revenue, but also more profitable revenue because you don’t have to attract them again, so less marketing, and also higher valuations among investors

3.  The Non-Financial Benefits of Subscription: direct relationship with subscribers; more engaged members provide better data for planning and roadmap; more nimble organization

4.  Why Some Organizations Resist: requires change, risk of cannibalization of an existing business, as it takes a while to pay off

5.  What to Do/Where to Start: look for pockets where colleagues are experimenting with subscription and support them, work with them wherever you are in the Launch/Scale/Lead part of the process.

 

The WEBchat covers:

  1. How prevalent subscription business models are used EVERYWHERE
  2. Treasury processes without workflows
  3. Bank account management with workflows + Demo
  4. The main benefits of using TIP treasury workflows
Key timing points
1:00 Subscriptions are EVERYWHERE
2:03 - largest companies in world are using subscriptions, e.g. for B2B companies such as Caterpillar
4:04 - why subscription revenues are loved by investors by investors because they are more predictable, and businesses with valued more highly (5-7x sometimes)
5:24 - organisations moving business model to as much subscriptions as possible
5:38 - move to subscriptions now in pandemic crisis because business more resilient and reporting member gr
7:40 Subscription phases
8:18 - challenges and best practices for corporates and global
11:22 - need commitment to solving customers’ needs and problems
11:42 - launch phase: overcoming the culture problem
13:06 - the metrics need to track: engagement and retention; customer lifetime value
15:05 - Scale the subscription business: education, impact on product, how revenue comes in differently, and need to educate investors.
16:42 - Lead: how to avoid subscription fatigue and what else is happening worldwide; don’t confuse inertia with loyalty
22:10 Overall framework
22:20 - key levers in maximising the subscription model
23:28 - dangers of assuming that you have a fixed advantage
25:30 - organisation wide initiativeS
26:10 - role of free services
28:32 - how overcome technology barriers
30:00 - how change mindsets the biggest problem: passive aggressive resistance
32:02 Key takeaway for CFO/corporate treasury department

CTMfile take: The world is changing with companies like Caterpillar, who is already a heavy user of subscriptions, are now talking about their customers not buying their heavy equipment instead they will subscribe for a fully supported service, rather than have the responsibility of ownership, i.e. the customer doesn’t want to own the equipment they really are only interested in achieving results. Building more disruption proof and more valuable relationships. This really is a new Business Model. Listen to the new disciplines needed.

Like this item? Get our Weekly Update newsletter. Subscribe today


This item appears in the following sections:
Tips
Podcasts
Treasury insights

Also see