Webinar | Pendula & Subscription Factory

The importance of customer communication and building winning strategies for subscription businesses.

It’s no surprise that the ever changing technological landscape and shifting consumer behaviours has made both marketing and CX, challenging for all.

If you were unable to attend the live webinar, you still have the opportunity to watch the recorded version. In this session, Pendula and Subscription Factory delved into the strategies employed by leading technology businesses to overcome challenges in digital and customer communication

Bi-directional customer communication is a critical component of modern subscription-based business models, particularly in the realm of digital services, e-commerce, and SaaS (Software as a Service). It refers to the exchange of information and interactions between a business and its customers that flows in two directions: from the business to the customer and vice versa.

In this live virtual webinar, Pendula and Subscription Factory covered:

• Multichannel communication strategies and winning campaign flows that experts recommend
• Leading subscription-based business methodologies, matched with real-world business use cases
• Customer retention principles to drive engagement and improve customer lifetime value
• The technology required to support all your customer comms and subscription-based needs
• 10 minutes Q&A
• Plus much more!

Zaasly Press Release 

Zuora and Subscription Factory Introduce The Zaasly Program to Help Companies Accelerate Recurring Revenue.

October 12, 2023 – Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern businesses, and Subscription Factory today introduced Zaasly, a comprehensive program to help small to medium enterprises in Europe establish recurring revenue business models, including subscriptions and consumption-based models.

In the fast-paced world of digital commerce, recurring revenue has emerged as a transformative opportunity for predictable growth. Zuora’s Subscription Economy Index™ (SEI) report found subscription-based companies in the SEI have experienced 3.7x faster growth rates than the S&P 500 over the past 11 years. However, implementation and scale can be more challenging for small to midsize companies, as these new business models demand a concrete strategy and agile execution. The Zaasly program is tailored for this business segment with custom pricing and packaging, rapid implementation, and e-commerce integration, while reducing dependency on IT and operational resources.

About Subscription Factory

Subscription Factory, with a decade of experience, stands at the forefront of the subscription commerce revolution. Committed to bridging gaps, Subscription Factory combines subscription expertise, strategic thinking, and hands-on training to empower businesses across sectors. With a deep-rooted understanding of market dynamics, they provide tailored solutions, ensuring that companies not only get started with subscriptions but use them to drive growth.

About Zuora, Inc

Zuora provides a leading monetization suite for modern businesses across all industries, enabling companies to unlock and grow customer-centric business models. Zuora serves as an intelligent hub that monetizes and orchestrates the complete quote to cash and revenue recognition process at scale. Through its industry leading technology and expertise, Zuora helps more than 1,000 companies around the world, including BMC Software, Box, Caterpillar, General Motors, Penske Media Corporation, Schneider Electric, Siemens and Zoom nurture and monetize direct, digital customer relationships. Headquartered in Silicon Valley, Zuora operates offices around the world in the Americas, EMEA and APAC. To learn more about the Zuora monetization suite, please visit www.zuora.com.

The 9 Keys to Subscription Success!

Discover the Nine Keys and let us guide you through the process to profit from the Subscription Economy.

Have you noticed that so many day-to-day products or services enjoyed by consumers are no longer purchases but subscriptions?

That’s because the world has changed!

In this new world, your customers are increasingly comfortable with being subscribers. They have discovered that a subscription is a great way to access and experience your product or service.

Even better, you can tailor your service to their expectations and desires. Some customers are motivated by free trials, some are keen to experience the latest upgrades on a continuous basis, and some are excited by vouchers that give them a special bonus on Black Friday!

Long-lasting customer relationships

All of these methods and more are great ways to create engagement.

But how do you begin the process of delivering your product or service as a subscription? What’s the best way to enter the era of the Subscription Economy? Above all, how do you create an involving and responsible experience that drives truly valuable long-term subscriber relationships?

The answer lies in Zuora’s Nine Keys To Subscription Success.

Number Nine Dream

Zuora’s Nine Keys To Subscription Success are built on years of experience, analysis and research. During that time Zuora has enabled countless companies to adopt a successful Subscription Model. Those companies extend to all sectors, from the makers of razor blades to new generation IOT software providers.

We at Subscription Factory live and breathe the Nine Keys on daily basis. Our experts deploy them to ensure that our customers enter the world of Subscription Economy smoothly and successfully. And we are pleased to say that of all our customers are growing their subscription base and offering.

The Nine Key areas serve as a foundation for building a successful subscription business in any industry. And they encompass every necessary step, from setting up pricing to how you architect your eco system.

Here is how you could kick start your own journey!

1: Pricing & Packaging

What would happen to your business if you had the superpower to quickly launch new price models, create bundles and send out special  offerings 24/7?

Yes, it would drive growth of and increase retention.

With a legacy system, adjusting pricing and packaging will never be quick or easy. But in today’s world you need to respond rapidly to fast-changing business circumstances and consumer trends.

With Zuora pricing and packaging you have the flexibility to iterate in minutes.

Your hands will no longer be tied when you see opportunities for promotions and growth. You’ll have the flexibility to fight back if competitors get one step ahead. Above all, your customers will see that you’re moving dynamically to address their needs through great offerings and attractive pricing.

2: Acquire & Subscription Management

What if your subscribers can subscribe to your product or service anywhere and anytime?

Subscribers should have the flexibility to subscribe to your product or service via a mobile app or through a webshop. Some subscribers will want to get a quote before they subscribe. The good news is that Zuora supports all of these channels and more.

Want to achieve subscription growth that’s 3X faster?

Subscribers should have the ability to make changes, upgrade, renew or pause their subscription. Over time, based on Zuora’s research, companies that gives customers the freedom to change their subscription grow 3X faster than their peers. Of course, this brings challenges and impacts on your finance and technology. Zuora removes those bottlenecks and allows customers to make changes throughout a subscription life cycle.

3: Rating & Billing

How about staying stress free as the automated process takes care of generating accurate and timely invoices?

In a subscription business model, recurring and usage billing introduces new complexities.  There is high necessity to automate this billing so that accurate invoices are generated when your subscribers go through the life cycle of upgrades, downgrades, discounts and usage. Zuora’s billing engine allows your Billing operations team to automate and schedule bill runs with a variety of permutations.

4: Payments & AR

You don’t really manage payments and collections, we automate it for you!

Giving customers the ability to pay via a wide variety of payment methods is central to a successful subscription business. That’s because long-term subscribers often want to switch to a different payment method, or to adopt emerging new payment methods. With this complexity comes the need for greater payment automation.*

Zuora offers native integrations with a wide variety of payment gateways. And with the payments engine the collection process is simpler than ever before. You will soon be enjoying guaranteed monthly recurring revenue, giving you the resources to scale up your business to the next level.

5: Revenue Recognition

Say goodbye to manual revenue recognition and have the power to adopt new revenue recognition standards for new business models.

Companies find it hard enough to rely on error prone spread sheets for manual revenue recognition. When subscribers go through the subscription lifecycle of upgrades, downgrades, discounts or cancellations it becomes very complex to perform manual revenue recognition. You don’t have to undergo all this hassle as you are fully covered by Zuora’s Revenue Recognition models and Recognition rules.

6: Accounting Close

It’s month-end once again. Can your finance team close the books efficiently?

Your finance team should be able to easily manage financial controls, reconcile transactions, and integrate with your accounting system of choice. Zuora’s monthly journal exports plugs directly into your accounting software and General Ledger so that the accounting process runs smoothly. Rest assured you are fully covered with GAAP compliance.

7: Analytics & Reporting

Can you take the right decisions and make better offers when you have all the subscriber insights at your fingertips?

The Subscription Economy and subscription metrics enable you to look ahead for numbers rather than looking backwards with traditional GAAP metrics. Zuora analytics incorporates all key metrics such as MRR, ARR, ARPA, Net Retention, Churn and Customer Lifetime Value and much more. You’ll have the power to analyze, plan and make smarter decisions at your fingertips.

8: Integrate & Iterate

How about getting into the exciting game of trying something new with your order-to-cash ecosystem every day?

You’ve reached a point when subscribers are key to your business. Now is the time to get more creative around serving them in the best possible way by adding more integrations to your order-to-cash ecosystem. Zuora naturally connects with a variety of solutions in your ecosystem – CRM, ERP, E-commerce, Payment Gateways, and Taxation to name just a few. With the integrated order-to-revenue ecosystem you are already ahead in your journey into the Subscription Economy.

9: Scale

What do you do when your subscription offering is giving you the best results in your current market?

This is a no brainer! You definitely want to scale across multiple geographical locations and serve more of your subscribers. That’s why you should implement a solution that can change and scale as you grow. Zuora is built on secure, scalable technology infrastructure and there are no scale-up limitations.

Our experts at Subscription Factory understand that change is inevitable so we build-in the ability for your business to adapt to new markets, product/service launches, and evolving  ecosystems. We’re beside you wherever you start out, and with you wherever you want to go.

Congratulations! You’ve discovered the Nine Keys that will drive a successful Subscription Business.

Now it’s time to put some real thought into how your business can best profit from the Subscription Economy.

  Would you like to know more and discover the potential within your business?
Feel free to contact Timo Zuidgeest

How To Make Subscription Services Work

We specialize in the development and deployment of IT systems that support subscription models. That means we’ve seen what makes those models succeed or fail. Today we’re passing on some of that expertise.

Companies the world over are seeing the value of the recurring billing found in subscription models. Companies like IBM have realized how much value there is and are no longer purely a hardware business – they offer a huge variety of digital services on top.

Data is critical in understanding how to launch a successful subscription model. To give an example, the Financial Times was one of the first online papers to go for a fully digital, paid service. They invested a lot of money into analysts to find out how their consumers were engaging with the paper. It was then possible for them to be confident in the shift to a digital subscription and be able to craft subscription options that matched what readers wanted to see.

Let’s be clear – not every company can offer a subscription model. But those that can need simple steps to start the process of developing a sustainable model. Today, we’re highlighting those steps, and in the coming weeks and months, we’ll be delving deeper into each point to give you a complete breakdown of how to make subscription services work.

Pricing and Packaging

Just like the FT you need to design your services around what customers are willing to spend and not the other way around. Some companies remain in a kind of trial phase and want to give new services or initiatives almost for free, trying to justify it by saying it’s giving the customer more value. This isn’t sustainable and the more defined your offerings are the easier it will be for customers to find what they want to spend their money on.

Subscription Sales

You need to get your salespeople to think and behave differently if you’re reinventing yourself by offering digital services that previously were a part of one-off sales. Given that sales commissions will change with your new model, sales managers need to be aware of commission structures and how they encourage sales team members by paying out incentives for securing transactions with recurring income.

Subscription Billing & Cash Collection

You should use several different billing techniques if you want your model to be successful. While monthly plan subscribers are more likely to unsubscribe they’re also more likely to stay subscribed if the cost is negligible to them. You won’t fully transition to the subscription economy if you only give subscribers the chance to pay annually. The point of subscriptions is to provide convenience so give your customers at least one monthly payment option.

Subscription Accounting

There are key differences between subscription accounting and regular accounting practices. What you want is a subscription billing engine that will create a sub-ledger and provide you with all the required information. Whether it’s an ERP system or a dedicated finance software platform they’re often built to support subscription income as a secondary revenue source – you need it to be built with subs as the focus.

Mindset Is Everything

There are of course technical challenges to implementing an effective subscription model. However, most businesses struggle with cultural change over anything else. It’s all about changing the mindset of your people to match the new way that you charge for your products and services. Once you’ve got that covered, you’re ready to get started.

Looking to put a subscription service in place? Talk to the experts today – Subscription Factory.

The Why Behind Subscription Factory

Many industries are changing the ways they deliver their products to customers. Companies all over the world are embracing subscription models and we’re proud and excited to be in the middle of it. Let’s quickly show you how we got here.

We’re based in the Netherlands and have the pleasure of working with clients based in Europe, Scandinavia, and the US. What we do really well is deliver B2B subscription projects for big brands – think Philips, Bitdefender, and Trustpilot. We can only work with the best because we’ve got years of industry experience so here’s how it all started, as well as where we’re headed.

Starting Out

About 11 years ago our founder, Timo Zuidgeest, was working on a project to transition a Dutch publisher to a subscription service using a subscription billing engine called Zuora. That work gave Timo a window into Zuora’s vision of the future and how billing models were changing globally. Full of new ideas, Timo went straight off and registered the domain name we use to this day – and those were the humble origins of what we’ve now built up to!

Zuora is still a trusted partner, and we work with many other subscription delivery companies to make sure we always have the tools to help businesses realize their goals. We’re experts at implementing the IT systems that support subscription models and so having links with the best technologies in the game is just one part of what makes us good at what we do.

The reason we’ve grown and been successful is that we truly believe in the power of subscription models. Product sales are no longer about ownership for businesses or consumers, it’s about usership. Everything is being driven toward digital and that’s how we always position ourselves.

Giving Customers What They Actually Want

Subscriptions really are about unburdening people. Whether it’s the rapid ascent of Netflix or Just Eat – subscriptions offer consumers absolute convenience. The market for consumer goods like food, music, and films is well established, and you’d be hard-pressed to find someone who doesn’t have at least one monthly subscription.

But one area which is also taking off is in the B2B world, where big companies have an opportunity to layer additional services on the back of their already popular products. SaaS is now the accepted model for pretty much every software company and steadily other sectors are adopting this practice.

For example, we’ve worked with DAF, a Dutch track manufacturer, who now offers digital services as additional extras as part of vehicle purchases. The truth is that if companies don’t create their own software a third party will so why not seize the opportunity for additional revenue as well as greater brand loyalty by offering more value.

Subscription models are here to stay and so are we. B2B subscription services are a growing segment, and we see huge opportunities to help create sustainable models that businesses can rely upon as they go up against increasingly disruptive competitors.

Want to know how subscriptions can work in your business? Talk to Subscription Factory today.

Common Pitfalls Of The Subscription Model And How To Avoid Them

Consumer attitudes to ownership are changing, with greater demand for products and services which offer convenience, high-quality customer experience, and accessibility. So it’s no wonder then that in the last decade or so, the digital subscription economy has rapidly grown, reaching $650 billion USD worldwide in 2020.

The customer benefits of the subscription model are clear: no large upfront cost, smaller affordable recurring payments, the option to cancel at any time, and the flexibility to change providers. Whilst customer-focussed businesses see the value of adopting a subscription model, they’re not always aware of the impact on their organization, or some of the potential challenges involved with setting up and running internal systems for handling recurring revenue.

Martin van Vugt, Partner and Senior Business Consultant at Subscription Factory, shares his experience and insights on some of the common pitfalls of getting started with the subscription model.

Implementing A Scalable Model

In today’s world, many people expect convenience and instant access to everything at once. With subscription services like Netflix and Spotify, people are accustomed to quickly entering their personal details and card information online to instantly unlock vast libraries of content. That process, sometimes referred to as the ‘happy flow’, is the simple process for getting started.

When implementing a subscription service for the first time, it’s important to keep the solution simple and scalable. Sometimes the temptation for businesses is to give their customers everything at once – which is possible with a platform like Zuora – but they run the risk of over-complicating their offering and creating deep and unnecessary organizational complexity.

It’s true to say that the subscription economy allows you to scale endlessly, but at the same time the organization itself also needs to be able to handle a sudden upsurge in subscribers. If a subscription model is overly complicated, it becomes difficult to maintain, and scale. That means knowing how to handle support, and limiting the number of features.

Managing Organizational Change

Implementing a recurring revenue model necessitates organizational change. So there’s a direct impact right across the business – from sales through to finance. For a finance team, used to the old transactional model, suddenly they’re faced with new ways of working, and increased automations. For instance, things like invoicing, payment reminders, and even cancellations can be automated, which might leave members of a finance team wondering what their new roles will be or whether they’ll still have roles to fulfil. 

In reality, the subscription model creates new kinds of finance work because with more frequent transactions comes the need for more regular reporting and so on. On the flip side, subscription models ultimately lead to more predictable, and regular revenue rather than the peaks and troughs of single-transaction sales – like an annual software licence.

The subscription model also impacts the way sales teams operate. With a single licence or yearly renewal, sales teams are used to securing the deal and walking away with their commission. As recurring payments usually involve smaller amounts –as opposed to one large upfront cost – which has a knock-on effect on how commissions are handled. 

Typically, recurring revenue businesses calculate commission using a multiplier; based on the average time a customer stays with the company. Whilst salespeople are no longer in the position to offer discounted pricing to ‘seal the deal’, a subscriptions model potentially enables them to push their product or service to more customers, and therefore boost their commissions. Further down the line, there’s also the opportunity to upsell customers on the next subscription package in the line-up. 

 Moving from a single upfront payment to monthly recurring payments removes the need for a yearly touchpoint with the sales team, so they can instead spread their efforts more evenly across the year. Regular and frequent contact with customers is obviously another key organizational change when switching to a subscription model.

For marketing teams, the subscription model opens up more creative opportunities at the wide end of the funnel – because unlike a single transactional product or service, it’s no longer static. In fact, many organizations renew the structure of their subscription packages on a regular basis: to keep their offering fresh, competitive, and of course profitable. This creates scope for more frequent and engaging marketing campaigns.

Handling Technical Implementation

When a company – a re-inventor – switches to a subscription model, they sometimes presume that they can carry over their previous model, making a new subscription service fit their old ways of working. 

Particularly in B2B, where a company may have special agreements in place with certain customers, there is a bedding-in period as existing customers make the transition. Even by providing the best support and guidance possible, this transition can obviously lead to churn.   

Another part of the technical implementation of a subscription model involves careful consideration of how to handle the cancellation process without overburdening the customer and leaving the door open to a future relationship.

Downsizing the complexity of the implementation helps organizations to transition more smoothly, as does rolling out a solution at the right pace. The typical time it takes to get a good first version of a subscription model in place is around six months. The switch to subscriptions also creates a revenue gap, because yearly payments are now spread monthly across the year. In the long term, the revenue is the same (or higher) but in the short term there is an initial deficit when compared with the single transaction model.

That’s why when it comes to implementation, many businesses turning to the subscription model build in a transition period to allow customers to make the switch, and stagger the onboarding process rather than moving everyone over all at once. Of course, this transition period requires businesses to run two models, which adds to the complexity in the short term.

Avoiding The Pitfalls

Businesses switching to a subscription model face a number of potential pitfalls which can be difficult to avoid, without expert guidance and support. 

For over a decade, Subscription Factory has helped numerous businesses make a successful transition into the subscription economy. At GoRecurring 2022, we’ll be sharing expert advice for implementing successful subscription services. 

  Would you like to know more and discover the potential within your business?
  Feel free to contact Martin van Vugt