9 things to drive success in the subscription economy
TRANSCRIPT
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Our World Is Shi.ing
The Subscription Economy takes the changes wrought by the SaaS model and applies them to companies in every industry.
We call this the subscrip7on Economy
Mone7ze Rela7onships Ship Products
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Every company will be a Subscrip4on Economy Company
OUR VISION:
“ ”
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JOINS
The Subscrip4on ECONOMY
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The Subscrip4on ECONOMY
JOINS
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The Subscrip4on ECONOMY
JOINS
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JOINS
The Subscrip4on ECONOMY
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JOINS
The Subscrip4on ECONOMY
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JOINS
The Subscrip4on ECONOMY
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500+ Customers
15.5 Billion Contracted Invoice Volume
with �
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8X increase in processed invoices in 2 years
1.8 MILLION
239 K
APR 2011 APR 2013
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Training The Subscrip7on Economy
12,000+ Hours
Training Delivered
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Every Quarter Close To 50 Go-‐Lives
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20X more capacity in new datacenter
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Commitment To Rapid Innova7on
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220
104
Product Requests
Customers
In 180 Days
From
New InvoiceItemAdjustment datasource Override accoun7ng code on payment
More fields on dataSources Autopay flag UK direct debit
Refund Reason Codes BeWer user ac7vity log
More invoice merge fields More quote merge fields
Payment method expira7on Query usage by Invoice Id
Sort by name in PDF Credit balance refund -‐ MES
New UOM API Improved subscribe() Improved amend() Bill run rollbacks
API currency ac7va7on Refunds In SFDC Payments in SFDC
REST APIs
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HP Cloud TripAdvisor Xplornet Hosting.com MyEmma
30%-‐95% reduc8on in bill run 7mes
The latest performance improvements attest to the fact that as our business grows, Zuora continues to scale to accommodate that growth. “ ”
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The World Will Move to the is moving
Subscrip8on ECONOMY
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…Moving into uncharted terrain
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There are 9 things that you need to be successful
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Roadmap for Success
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But it takes 6 months and 10 engineers to implement a $0.05 price change
PRICING IN PROGRESS
Price and package to support your business strategy
1
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Donna Wells CEO
Increased revenue per customer
launched a new pricing model overnight
no engineering work required
1 Mindflash
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Monetization plans 155
Deployed by our average customer
1
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Enable new customers to subscribe 2
Make this preSer
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Enable new customers to subscribe 2
Can we add a Recognize as a
fiVh branch. Also this is now a
build, so you may need to redo the
build if you ungroup things
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NCR Silver
automated commerce, billing and finance
launched new service
in just 2 months
Bill Plummer
2
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This month’s fee + last month’s overage + last month’s pro-‐rata fee -‐ account credit + next month’s fee + sign up fee + 8.7% tax
= $192.48
Produce accurate, easy to understand bills for new and exis7ng customers
Confused customers
Weeks to generate bills
Billing Errors
Lost Revenue
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“But I signed up for the $100/month plan”
3
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with complex usage billing models
hands-off invoicing for thousands of clients
in multiple countries
Firehost Katrena Drake
3
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Collect cash fast 4
Automate small payments
Automate big payments
Billing disputes & credits
Late payments
Suspension warnings
Suspensions
Credit card updaters
Payment excep7ons
But the complexity of recurring payments is weighing you down
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Xplornet processes hundreds of thousands of payments in
hours
Across multiple payment methods
And manages payment exceptions and retries
automatically
Xplornet 4
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90% of transac7ons are changes
We will complete your request to change your subscription
15 business days
Click to continue
Give your customers control of their subscrip7ons
You struggle with the ripple effects of these changes
Result: Terrible customer service
BUT
5
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Implemented “Holiday Stops”
allowing hundreds of thousands of subscribers
to suspend service
in a matter of weeks
online or via call center
News Interna7onal
5
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“We need more 7me”
- Finance Team
But it takes weeks to close the books
Close your books faster while remaining compliant
6
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and 3 days better business operations
Our monthly close is 3 days shorter
I get 3 days better intelligence
every single month
Dyn Gray Chynoweth
6
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But the metrics you need to run your business are buried in spreadsheets
MRR
ARR
CLTV
CHURN
Gain visibility into key subscrip7on metrics 7
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And visibility into future revenues
When the board calls
we‘re able to give them actuals from prior months
SendGrid Jim Franklin
7
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Changing pricing requires filing a ?cket with engineering…
“The next available engineer will see you in 6 months”
Roll out price changes and experiment 8
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and signed on 200 new customers
We created a new promotion
in just a few minutes
without ever talking to engineering
Timetrade Mike Puglia
8
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Feel confident that your system is enterprise grade
9
Peace Of Mind
With… Scalability Security
Compliance
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1 Price and package to support your business objectives
2 Enable new customers to subscribe
3 Send accurate, easy to understand bills
4 Collect cash fast
5 Give customers control of their subscriptions
Gain visibility into key subscription metrics
7
6 Close books faster while remaining compliant
8 Roll out price changes and experiment 9
Feel confident that your system is enterprise grade
9 “things” on your roadmap for success
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You gave these 9 things equally high importance
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And you see an opportunity to improve your performance against all 9 things
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Importance Current State
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1 Price and package to support your business objectives
2 Enable new customers to subscribe
3 Send accurate, easy to understand bills
4 Collect cash fast
5 Give customers control of their subscriptions
Gain visibility into key subscription metrics
7
6 Close books faster while remaining compliant
8 Roll out price changes and experiment 9
Feel confident that your system is enterprise grade
9 “things” on your roadmap for success
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CEO
CFO
CIO
COO
CMO
These 9 things impact your en7re organiza7on
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CMO
How do I balance growth & revenue?
How to I think about choice vs. simplicity?
Do I price for new accounts or exis7ng?
How do I price vis-‐à-‐vis compe77on?
How do I improve TTM & opera7onalize?
It impacts marke8ng
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COO
It impacts opera8ons
How do I drive efficient bookings & cash growth across the complete customer lifecycle?
Sales Opera7ons
Billing & Revenue Opera7ons Subscription
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It impacts finance
APR $100 Chum (10) Net ARR 90 COGS (20) G&A (10) R&D (20) Recurring Profit 40 Growth (40) Net New ARR 40 Ending ARR $130
Growth Efficiency Rate
Recurring Profit Margin
Retention Rate
CFO
How do I run the business on a model 4ed to a completely new set
of metrics?
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It impacts technology
CIO
How do we architect our systems to interplay with commerce, billing and
finance
Billing Ra7ng Pricing
Revenue Recogni7on Accoun7ng Integra7on Gateway Integra7on
Taxa7on PCI compliance
Build Service Provision Service
Manage En7tlements
I don’t want to own
I own
?
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It impacts the boardroom
ARR Growth Reten8on Rates Unbilled Deferred Revenue
CEO
How do I convey the health of my business to
the board and Wall Street?
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Today: A day focused on your roadmap for success
Networking Recep7on
5:30-‐7:30 PM
The CEO Perspec7ve Driving Growth in the Subscrip7on Economy
Presenta7on + Panel
Roundtable
Presenta7on + Panel
Roundtable
Presenta7on + Panel
Roundtable
Innova7ve Pricing & Packaging
CMO COO CFO
CEO
Scaling Sales & Billing
Opera7ons
Finance Opera7ng Plan For The Subscrip7on
Economy
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Bay Area User Group
July 17th 6pm – 8pm 1051 East Hillsdale Blvd
Foster City
#StoS13
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The CEO Perspec8ve Meet The Panelists
@jimfranklin
SendGrid Jim Franklin, CEO
RightScale Michael Crandell, CEO
Mindflash Donna Wells, CEO
Informa7ca Cloud Ron Papas, GM & SVP
Zuora Brian Bell, CMO
@michaelcrandell @ronpapas @donnawells
@brianbell123
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Partner Showcase
#StoS13
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MaU Shanahan SVP, Strategy
Predic8ve Analy8cs For Maximizing Customer Lifecycle
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Cloud Profits Derived from Long-‐Term Customer Rela4onships
TIME Year 1 Year 2 Year 3
PROFIT
acquisition customer retention and growth
Customer Sign-‐up
Customer Acquisi4on Cost
Breakeven
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What’s missing? Predic4ve Analy4cs
— No Analy4cs Available —
Trials Adop4on Renewal Up Sell Cross Sell
acquisition customer retention and growth
Customer Sign-‐up
Customer Acquisi4on Cost
Breakeven
● Lead Scoring ● Funnel Tracking ● Forecas4ng ● Pipeline Management ● Conversion ● SEO Op4miza4on ● Keyword ● Lead Nurturing
Which are most likely to convert?
Did the customer get good value from the service?
Is user ac4vity mee4ng
expecta4ons?
Is the service underpriced compared to
usage?
Which addi4onal services should be promoted to fans?
PROFIT
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Scout Analy4cs
Leading Provider of Predic4ve Analy4cs to Maximize Customer Life4me Value
for Recurring Revenue Businesses
We Boost Total Revenue 10-‐15% by PuSng Usage Data to Work
● Increase Renewal Yields ● Minimize Churn ● Maximize Trial Conversion ● Op4mize Rate Plans
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Scout Analy4cs Predic4ve Analy4cs Suite
YIELD OPTIMIZER
Renewal Performance Management for Sales
and Marke4ng
RATE PLAN OPTIMIZER
Pricing Performance Management for
Product Management
CUSTOMER SUCCESS OPTIMIZER
Customer Lifecycle Management for Service and Support
Scout® Usage Data Hub
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Scout Analy4cs Enhances Your Zuora
• Predict Renewal Prices Based on Revenue Opportunity
• Predict and Prevent Churn before Renewal
• Predict Which Trial or Freemium Customers Will Convert to Paying Customers
• Match Rate Plan Structure to Consump4on Behavior
• Meter Usage for Usage Charging
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Free Trial Offer
• Calculate the Revenue Yield of Every Historical Renewal
• Analyze Sources of Revenue Growth and Churn
• Monitor Renewal Performance in Real-‐4me
http://www.scoutanalytics.com/
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Partner Showcase
#StoS13
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Darlene Ducharme Senior Director, Partner Development
What can Litle & Co. do for You?
Copyright © 2013 Litle & Co., A Vantiv Company │ All Rights Reserved
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To help you use payments to drive business growth. MISSION
Delivering payments intelligence through value-‐added solu?ons built on solid core processing, to help you acquire, convert, and retain profitable consumer rela?onships in card-‐not-‐present commerce.
DIFFERENTIATION
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ACQUISITION Iden?fy high-‐value cardholders & measure channel efficiency.
CONVERSION Be flexible with alterna?ve payments & mul?ple currencies.
RETENTION Stay current with automa?c account upda?ng & authoriza?on recycling.
ATTRITION Manage the impact of aOri?on and prevent loss with chargeback preven?on & representment strategies.
With the right processor you can
INCREASE CUSTOMER LIFETIME VALUE
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Highly scalable payment processing plaRorm built specifically for card-‐not-‐present commerce. Robust core payments acceptance and processing solu?on, with value-‐adding fraud, security, and revenue solu?ons. Backed by the best repor?ng and analy?cs in the business and award-‐winning customer service
OUR SOLUTIONS
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Darlene Ducharme (978) 275-‐6603 [email protected] www.litle.com
LEARN MORE
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Agenda The CEO Perspec4ve:
Driving Growth in the Subscrip7on Economy
Presenta7on + Panel
Roundtable
Presenta7on + Panel
Roundtable
Presenta7on + Panel
Roundtable
CMO Perspec7ve: Innova7ve
Pricing & Packaging 3:45 – 5:30pm
CMO
COO Perspec7ve: Scaling Sales
& Billing Opera7ons 3:45 – 5:30pm
COO
CFO Perspec7ve: The Three Metrics
That MaWer 3:45 – 5:30pm
CFO
CEO
Floor 1 Mezzanine Floor 2
All Perspec4ves: Cocktails & Apps
Floor 1
#StoS13