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Subscribed 2013 San Francisco: CEO's Keynote

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In September 2013, 1000 members of the Subscription Economy community gathered to exchange experiences, challenges and solutions to building a better business. Here from Tien, Zuora's CEO, and several …

In September 2013, 1000 members of the Subscription Economy community gathered to exchange experiences, challenges and solutions to building a better business. Here from Tien, Zuora's CEO, and several customers, why the Subscription Economy is unstoppable -- and so can your business.

Published in: Economy & Finance, Business

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  • 1. TheWorldisMovingtoaSubscriptionEconomy
  • 2. Amazon Prime slide
  • 3. United slide
  • 4. Confidential and Proprietary Information. Do not distribute beyond intended audience. HIGH TECH SAAS CLOUD MEDIA DEVICES TELECOM EDUCATION HEALTH CARE FINANCIAL SERVICES CONSUMER
  • 5. Zuora Receives £36m For European Expansion It’s Spreading Around the Globe
  • 6. It’s Invading F500 BoardroomsIt’s Invading F500 Boardrooms
  • 7. You are the Face of Innovation today
  • 8. You are the Unstoppable
  • 9. 1 New Product Created Every Hour On Average …
  • 10. 10X transaction growth in 12 months 10,012,288 1,536,533 AUG 2012 AUG 2013
  • 11. 20Billion Contracted Invoice Volume
  • 12. Staying ahead of the UnstoppableStaying ahead of the Unstoppable
  • 13. 25X 10X60X Faster Syncs Faster bill runs More capacity
  • 14. Exponential investments in customer success 2012 2013
  • 15. 100 90 93 91 95 98 94 96 97 97 0 25 50 75 100 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 “Matt replied in moments and I am happy with how he handled my issue” Kristi, “I love Zuora support. You guys really do a great job” Harsh, “Cesar was awesome. Very thoughtful and helpful” Alan,
  • 16. So What’s Next?
  • 17. “What is the best way to price?”
  • 18. “How do I reduce churn?”
  • 19. “How should I compensate my sales force?”
  • 20. “How do I reduce the number of failed credit card transactions?”
  • 21. “Should I charge a setup or implementation fee?”
  • 22. “How do I account for multi-year contracts?”
  • 23. “As I expand internationally, what payment or tax issues will I encounter?”
  • 24. “Should I offer monthly or annual billing periods?”
  • 25. “I wish there was a blueprint”
  • 26. What if We Could Create a Blueprint
  • 27. We analyzed 6 years of data
  • 28. You are trying to Price Acquire Bill Collect Nurture Account Measure Iterate Scale
  • 29. Price 11% Acquire 12% Bill 14% Collect 12% Nurture 11% Account 11% Measure 9% Iterate 11% Scale 9% Support Cases Categorized By 9 Things
  • 30. Confidential and Proprietary Information. Do not distribute beyond intended audience. Introducing  the  9  Keys  to  Success  in  the  Subscrip2on  Economy    
  • 31. Confidential and Proprietary Information. Do not distribute beyond intended audience.
  • 32. Simple per-unit pricing Infinite pricing options
  • 33. 2220000000   ?   A new way to think about pricing
  • 34. Increase Cash Flow Drive Down Cost of Sales Outflank the competition Grab Market Share Increase Loyalty and Retention Pivot into a new segment Expand Internationally
  • 35. TheAbility to Price in support of your business goals is the first Key for Success in the Subscription Economy
  • 36. Itsoundseasy
  • 37. Billing Gateways fulfillment provisioning Immediate or delayed payment Connect to CRM Notify Connect to accounting Self service vs assisted flows Butit’sHarderThanItSeems
  • 38. We live in a B2Any world B2C B2B
  • 39. The Ability to Quickly Acquire Customers in a B2Any World is the second Key for Success in the Subscription Economy  
  • 40. Andrew Lam-Po-Tang
  • 41. Billing used to be simple Ship Bill
  • 42. $10   new customers Existing customers Pro-rate Usage Ship Bill
  • 43. Confidential and Proprietary Information. Do not distribute beyond intended audience. Confused  customers   Weeks  to  generate  bills   Billing  Errors   Lost  Revenue   1   2   3   4   Everybillisaninteractionwithyourcustomer “But  I  signed  up  for  the   $100/month  plan”  
  • 44. The Ability to Create Accurate, Clear Invoices at Scale is the third Key for Success in the Subscription Economy  
  • 45. Electronic payments Non-electronic payments Credit Cards Debit Cards Wire transfers Catch exceptions Multiple card types Country specific banking rules Retries Card updaters Manual Lockbox Receive payment Notify delinquents Write off payment ReconcileSuspend service
  • 46. The need to automate ACH
  • 47. Handling of Exceptions
  • 48. The Ability to Tame the Complexity of Payments is the fourth Key for Success in the Subscription Economy  
  • 49. Bill Plummer
  • 50. Build Valuable Relationships
  • 51. The Secret: Give Customers Control of the Relationship
  • 52. Remember the 2nd Key: Acquire? Subscribe
  • 53. That Was Just the Beginning Subscribe Renew Suspend Add-on Upgrade
  • 54. Sign  up   Validate  CC   Validated   Create  Bill   Process   Payment   Create   Account   Link  Account   Confirm  Sign   Up   Welcome   Email   Create   Subscrip2on   Provision   Service   WEBSITE  BILLING  CRM  PLATFORM  
  • 55. The Ability to Nuture And Develop Deeper Customer Relationships is the fifth Key for Success in the Subscription Economy  
  • 56. Andre Pimentel
  • 57. “I’ve got this massive spreadsheet I use to track Revenue”
  • 58. “It’s Taking Longer and Longer to Close My Books”
  • 59. “It’s becoming harder to harder to reconcile financial info across all my different systems”
  • 60. “The IT department used to be known as Dr. No …. But now, it’s the finance department”
  • 61. There’s no accounting for subscriptions Booking Subscription Billing Cash Revenue
  • 62. The Ability to Easily and Quickly Account for Bookings, Billings, Cash and Revenue is the sixth Key for Success in the Subscription Economy  
  • 63. You used to track these metrics Revenue  $100        COGS              (30)   Gross  Profit  70     Opera2ng  Expenses   S&M  (20)   G&A  (10)   R&D                    (20)   Total  Op  Ex  (50)       Net  Income  $20  
  • 64. Now you track these metrics ARR  $100        Churn              (10)   Net  ARR  90        COGS  (20)      G&A  (10)      R&D                    (20)   Recurring  Profit  40       Growth  (40)   Net  New  ARR  40     Ending  ARR    $130    
  • 65. Your current applications don’t give you the metrics you need
  • 66. The Ability to Instantly Access Subscription Economy Metrics is the seventh key for Success in the Subscription Economy  
  • 67. Chuck Best
  • 68. Pricing iteration is crucial to support growth
  • 69. You can’t afford this … “The next available engineer will see you in 6 months”
  • 70. The ability to Rapidly Iterate On Your Pricing and Acquisition Strategies is the eighth key for Success in the Subscription Economy  
  • 71. Why build all this into your service? Pricing Payments Taxation Billing Rev Rec Secure Mission Critical Scalable Rating
  • 72. When you could do this?
  • 73. Integratewithanecosystemthatsupportsyour service Customer   support   Inventory   Fulfillment   EnDtlements   Website   Provisioning   Commerce   Billing   Finance     Payments   GL   quoDng   orders   invoices   checks   events   account   status   account   balance   metrics  
  • 74. The ability to Run on a Scalable, Reliable, Mission Critical Infrastructure is the ninth key for Success in the Subscription Economy
  • 75. Cathy MacDonald
  • 76. Confidential and Proprietary Information. Do not distribute beyond intended audience. Introducing  the  9  Keys  to  Success  in  the  Subscrip2on  Economy    
  • 77. There have been moments where we took a leap forward in our understanding of the world
  • 78. 1789 1215 1687 1905 1980 2013
  • 79. Today we are taking a leap forward, together, in our understanding of the Subscription Economy
  • 80. Mike Pearl, PwC AJ Bernstein, Acxiom
  • 81. Confidential and Proprietary Information. Do not distribute beyond intended audience. Introducing  the  9  Keys  to  Success  in  the  Subscrip2on  Economy    
  • 82. We are wrapping everything we do at Zuora around these 9 Keys
  • 83. Our Second Announcement
  • 84. Why Are We Here?
  • 85. Why is the Subscription Economy an Unstoppable Force
  • 86. There is a Better Way of Doing Business
  • 87. Win / Win Relationships Transfer of Assets not
  • 88. Stable Recurring Revenue Built on Loyal Customers Massive investment of capital with unpredictable outcomes not
  • 89. Efficient use of resources More Pens, More Cars, More Phones, More Landfills not
  • 90. Subscription Business Model Is The Better Way
  • 91. Today, businesses must focus on •  Deeper customer relationships versus one-time transactions •  Fair, value-based pricing versus fixed, cost-plus pricing •  Efficient, consumption-based services versus shipping unit after unit •  Sustainable, forward-looking revenue versus backwards-looking financial reporting  
  • 92. If You Believe in a Better Way to Build a Business Join the Revolution Sign the Manifesto