Elastic Path Software     Winning With Subscribers     Top trends and best practices for selling and managing     subscrip...
Introducing Elastic Path Software      Digital Commerce for Innovators      • We help the world’s biggest brands sell digi...
Agenda   Everything changed – or did it?   Rewards and risks of the subscription model   Best practices in the subscrip...
Everything changed – or did it?   Apple in-app subscriptions – February 15, 2011Elastic Path™
Everything changed – or did it?   Google One Pass – February 16, 2011Elastic Path™
Rewards and risks of the subscription model   Recurring revenue, LCV   Predictability and loyalty   Billing information...
Rewards and risks of the subscription model   Recurring revenue, LCV            High customer expectations   Predictabi...
Rewards and risks of the subscription model  Source: GigaOM Pro, 2010     Source: OECD via GigaOM Pro, 2010  Mobile apps ...
Rewards and risks of the subscription model  “What will be the most prevalent business model in your sector in the next th...
Best practices in the subscription space  When do subscriptions succeed over other monetization models?   Ubiquity couple...
Best practices in the subscription space                                         Ubiquity*                                ...
Best practices in the subscription space                                         Ubiquity*                                ...
Best practices in the subscription space                                                Ubiquity                          ...
Best practices in the subscription space                                         Ubiquity                                 ...
Best practices in the subscription space – maybe                                        Ubiquity                          ...
Best practices in the subscription space – maybe                                        Ubiquity*                         ...
Best practices in the subscription space     Customers subscribe to experiential services, not to content     Customers ...
Key features in a successful implementation   Subscription product definition, pricing, and characteristics   Activation...
Key features in a successful implementation   Billing, renewal, and cancellation options   Payment platform – including ...
Key features in a successful implementation   Customer account management, customer service access   Ancillary revenue g...
Get going: Subscription alternatives                Apple in-app subscription service                Content types:     Pe...
Get going: Subscription alternatives                Strengths/Opportunities         Weaknesses/Threats                   ...
Get going: Subscription alternatives                Google One Pass payment system                Content types:    Period...
Get going: Subscription alternatives                Strengths/Opportunities         Weaknesses/Threats                   ...
Get going: Subscription alternatives                Outsourced subscription SaaS                Content types:    Services...
Get going: Subscription alternatives                Strengths/Opportunities        Weaknesses/Threats                 Str...
Get going: Subscription alternatives                Ecommerce platform subscription feature                Content types: ...
Get going: Subscription alternatives                Strengths/Opportunities       Weaknesses/Threats                 Full...
Review and takeaways  Winning with Subscribers     Subscription fundamentals do not change with new services     Subscri...
QuestionsFor more on-demand digital commerce resourceswww.elasticpath.com/resourcessales@elasticpath.com1.800.942.5282 (to...
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Winning with Subscribers: Top Trends and Best Practices for Selling and Managing Subscriptions Online

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Consumer demand for the seamless online purchasing and management of subscriptions like telecom and cable plans, software, business services and digital content is poised to skyrocket. Companies that successfully overcome the strategic, technical and user experience hurdles that come with this model will be rewarded with revenue predictability, new monetization opportunities, and long-term, high-bandwidth relationships with more satisfied customers.

www.elasticpath.com

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Winning with Subscribers: Top Trends and Best Practices for Selling and Managing Subscriptions Online

  1. Elastic Path Software Winning With Subscribers Top trends and best practices for selling and managing subscriptions online Featuring: David Chiu, Digital commerce strategist at Elastic Path SoftwareElastic Path™
  2. Introducing Elastic Path Software Digital Commerce for Innovators • We help the world’s biggest brands sell digital goods and services • We provide a flexible digital commerce platform and expertise in commerce strategy and implementation • #1 ecommerce blog www.getelastic.com • For more on-demand digital commerce resources www.elasticpath.com/resourcesElastic Path™
  3. Agenda  Everything changed – or did it?  Rewards and risks of the subscription model  Best practices in the subscription space  Key features in a successful implementation  Get going: Subscription alternativesElastic Path™
  4. Everything changed – or did it?  Apple in-app subscriptions – February 15, 2011Elastic Path™
  5. Everything changed – or did it?  Google One Pass – February 16, 2011Elastic Path™
  6. Rewards and risks of the subscription model  Recurring revenue, LCV  Predictability and loyalty  Billing information on file  Increased customer insights  Easier up-sell opportunities  Tier and loyalty possibilities  Ancillary revenue streams  Marketing benefitsElastic Path™
  7. Rewards and risks of the subscription model  Recurring revenue, LCV  High customer expectations  Predictability and loyalty  Consistent content quality  Delivery service levels  Billing information on file  Customer service and CRM  Increased customer insights  Easier up-sell opportunities  Packaging and distribution  Tier and loyalty possibilities  You will compete with “free”  Ancillary revenue streams  You need to sell an experience  Marketing benefits  Business process complexityElastic Path™
  8. Rewards and risks of the subscription model Source: GigaOM Pro, 2010 Source: OECD via GigaOM Pro, 2010 Mobile apps  Games and social networking  Digital music  Ebooks  Film and video  Lifestyle services  News and info  Business and consumer software  Business servicesElastic Path™
  9. Rewards and risks of the subscription model “What will be the most prevalent business model in your sector in the next three years” Source: Accenture Global Content Study, 2009 “Which factor represents the most important source of revenue growth for your segment in the next 3 years” Source: Accenture Global Content Study, 2009Elastic Path™
  10. Best practices in the subscription space When do subscriptions succeed over other monetization models?  Ubiquity coupled with experience (frictionless) “I will subscribe if you can get it to me in a way that I cannot imagine living without.”  Exclusivity “I will subscribe if I want it, but absolutely cannot get it anywhere else.”  Amortization “I will subscribe if other ways to get it involve spending a huge pile of cash.”Elastic Path™
  11. Best practices in the subscription space Ubiquity* Experience Exclusivity AmortizationElastic Path™
  12. Best practices in the subscription space Ubiquity* Experience Exclusivity AmortizationElastic Path™
  13. Best practices in the subscription space Ubiquity Experience Exclusivity Amortization Source: MMOGCHART.com, 2009Elastic Path™
  14. Best practices in the subscription space Ubiquity Experience Exclusivity AmortizationElastic Path™
  15. Best practices in the subscription space – maybe Ubiquity Experience Exclusivity AmortizationElastic Path™
  16. Best practices in the subscription space – maybe Ubiquity* Experience Exclusivity AmortizationElastic Path™
  17. Best practices in the subscription space  Customers subscribe to experiential services, not to content  Customers pay for access to content, not for the content  Multiplatform access is a big deal – and getting bigger  Watch for tension between ubiquity and experience  Make the recurring payment part as effortless as possible  Provide clear and responsive customer service options  Treat your subscribers like the valued members that they are Successful subscription-based products and services will have at least one (preferably two) of ubiquity, exclusivity or amortization plus a customer experience that is market average or better.Elastic Path™
  18. Key features in a successful implementation  Subscription product definition, pricing, and characteristics  Activation date, duration, tier, tier fluidityElastic Path™
  19. Key features in a successful implementation  Billing, renewal, and cancellation options  Payment platform – including recurrence and dunningElastic Path™
  20. Key features in a successful implementation  Customer account management, customer service access  Ancillary revenue generation – gift subscriptionsElastic Path™
  21. Get going: Subscription alternatives Apple in-app subscription service Content types: Periodicals, video, music Platforms: iOS Payments: iTunes store platform Implementation: Low Recurring cost: High (30% rev share)Elastic Path™
  22. Get going: Subscription alternatives Strengths/Opportunities Weaknesses/Threats  Premier mobile ecosystem  Limited to iOS platform  160MM+ devices  iTunes store billing  Desirable hardware  30% revenue share  2-9% web traffic/market  Customer data control  Mobile “plug and play”  “Shuttle” restrictions  Proven effective funnel  Multiplatform price cap  Possible antitrust actions  Possible antitrust actions  Instant platform for  Pain for content licensees content owners  Restrictive customer data  Strong multiplatform policies may impact players could still benefit ubiquity initiatives  “Need to be here”  “Need to be here”Elastic Path™
  23. Get going: Subscription alternatives Google One Pass payment system Content types: Periodicals, other media* Platforms: Web, mobile except iOS Payments: Google Checkout Implementation: Low Recurring cost: Med (10% rev share)Elastic Path™
  24. Get going: Subscription alternatives Strengths/Opportunities Weaknesses/Threats  Web and mobile spaces  Google Checkout billing  10% rev share (vs. 30)  10% rev share (vs. 2.5)  Variety of pricing models  Unproven funnel  No “shuttle” restrictions  Somewhat less “plug and  Relatively permissive play” for mobile at launch customer data rules  Google brand and trust  Android Market revenue  Stronger foundation for share details multiplatform initiatives  Google Checkout track  More consistent with record questions programs to increase  10% may still be marginal channel ubiquity value for licenseesElastic Path™
  25. Get going: Subscription alternatives Outsourced subscription SaaS Content types: Services, other media Platforms: Primarily web Payments: Most types Implementation: Medium Recurring cost: Low (2-5% interchange)Elastic Path™
  26. Get going: Subscription alternatives Strengths/Opportunities Weaknesses/Threats  Strong presence for Web  Limited application/focus  Extensive monetization in mobile space models for products and  Mobile may require add services  Not specialized for  Service-oriented APIs content publishers (yet)  Lower interchange costs  For enterprises with  Issues with mobile market custom requirements, walled gardens SaaS provides lower CoE  SaaS sometimes limit  Solid platform for channel customization possibilities ubiquity programs  Cost-benefit needed for  Customer data ownership very high volumesElastic Path™
  27. Get going: Subscription alternatives Ecommerce platform subscription feature Content types: Any Platforms: Web, mobile except iOS Payments: Any type Implementation: Medium to high Recurring cost: Varies (incremental)Elastic Path™
  28. Get going: Subscription alternatives Strengths/Opportunities Weaknesses/Threats  Full customization  Higher implementation  Extensive monetization costs than other platforms models for products,  Potentially higher support services and content  Longer time to market  Lowest interchange costs (almost zero increment)  Allows very unique and  Issues with mobile market complex features/models walled gardens  Single platform for all  Constant upgrade cycle to customer touchpoints maintain ubiquity (multi-model enterprises)  Cost-benefit needed for  Customer data ownership all transaction volumesElastic Path™
  29. Review and takeaways Winning with Subscribers  Subscription fundamentals do not change with new services  Subscription is a demanding monetization model  Experience and access, not content, are king  Growth will come from packaging and delivery advancements  Aim for 2 out of 3: Ubiquitous, exclusive or amortized  Don’t forget that CRM is amplified in a subscription model  Look for solutions that provide mobile access to content  But … consider cost/benefit for each ecosystem carefully  Innovate “strategic workarounds” to maintain the big threeElastic Path™
  30. QuestionsFor more on-demand digital commerce resourceswww.elasticpath.com/resourcessales@elasticpath.com1.800.942.5282 (toll-free in North America)www.elasticpath.comElastic Path™

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