Zuora Inc. Strives For Growth In Billing Software

Enterprise subscription management software is pretty boring. But the world is shifting from purchase to subscription. Every company now wants “continuous customer relationships” and consumers love subscriptions. In many ways, the subscription economy isn’t new. Even cars were often leased versus bought but they were still treated as an asset. Companies like Zipcar took it to a new level of all service.

Sellers like subscriptions because it gives them more predictable revenue and consumers like to avoid making large purchases and prefer smaller, predictable and cancellable subscriptions.

Some of the key drivers for this trend in business stem from four main drivers (according to Forrester):

Everyone wants stickier customer relationships. That demands a move away from “one and done” transactions and to models that keep the customer more locked in and coming back for more. For example “family plans” have caught on with service providers because it makes it much, much harder to change since it requires everyone in the family to change which is a major hassle.

Products are now connected. Thanks to the IoT trend everything is full of sensors and “smart” which require ongoing monitoring and updates. This opens up lots of business model innovation for companies which demands new types of billing to go along with them.

The cloud enables subscription and usage-based revenue models. In most developed (and many semi-developed) areas the cloud is ubiquitous and the general expectation for any cloud-based offering is that it will be sold on a subscription basis.

Data-driven customer care and business insights. If a customer walks away with a one-time purchase your opportunity to collect data and learn how to build a relationship is nil. But if they are linked by a recurring subscription they can be monitored based on usage, engagement, and sentiment. The data can be used to provide better service, product innovations or improvements in interfaces and packaging.