“The world is shifting from selling products to selling subscriptions, and in the subscription economy, companies are focused on generating recurring revenue. So it’s not about the price of the product and the margin. It’s about delivering value to customers, so they don’t want to switch services.”
This is the advice of Tien Tzou, CEO of Zuora, in his recent FORTUNE article.
In order to manage this effectively, Tien Tzou advises there are five things a company must do and one very important question to answer (yes, its all about asking the right question!) to leverage a once-in-a-century transformation in business.
- Define subscriber metrics
- Understand your consumer
- Personalize your service
- Customize access
- Create a great experience
The key question isn’t “What product can I sell?” but rather “What do my customers really want, and how can I deliver that as an intuitive service, rather than a stand-alone product?” Answer that question and you’re on your way.
Check out his full article to learn more about his perspective. Take note, Zuora is an enterprise software company that designs and sells SaaS applications for companies. And they use a subscription business model.
However, from my point of view, irrespective of your industry, Tzou’s advice is well worth the time contemplating at your next advisory council or Leadership Team strategy meeting (you do have one don’t you?).
Contact me to discuss how this shift applies to your business.
Copyright 2015-2020 David Paul Carter.