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Transi0oning	
  to	
  a	
  Subscrip0on-­‐based	
  
Business	
  Model:	
  	
  
A	
  Checklist	
  for	
  Success	
  	
  

hosted	
  by:	
  
Jon	
  Ge@nger,	
  SVP	
  Marke0ng	
  

Ashley	
  S0rrup,	
  SVP	
  Product	
  and	
  
Solu0on	
  Marke0ng	
  

hosted	
  by:	
  
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:	
  
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:	
  
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:	
  
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:	
  
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:	
  
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:	
  
Current	
  Recurring	
  Revenue	
  Alliance	
  Members	
  
	
  
Recurring	
  Sales	
  

Recurring	
  
Revenue	
  

Analy@cs	
  

Data	
  &	
  
Integra@on	
  

hosted	
  by:	
  
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:	
  
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	
  
Q&A	
  

hosted	
  by:	
  

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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