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TheWorldisMovingtoaSubscriptionEconomy
Amazon Prime slide
United slide
Confidential and Proprietary Information. Do not distribute beyond intended audience.
HIGH TECH
SAAS
CLOUD
MEDIA
DEVICES
T...
Zuora Receives £36m For
European Expansion
It’s Spreading Around the Globe
It’s Invading F500 BoardroomsIt’s Invading F500 Boardrooms
You are the Face of Innovation today
You are the Unstoppable
1 New Product
Created Every Hour
On Average …
10X transaction growth in 12 months
10,012,288
1,536,533
AUG
2012
AUG
2013
20Billion
Contracted Invoice Volume
Staying ahead of the UnstoppableStaying ahead of the Unstoppable
25X 10X60X
Faster Syncs Faster bill runs More capacity
Exponential
investments in
customer success
2012 2013
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 ...
So What’s Next?
“What is the best way to price?”
“How do I reduce churn?”
“How should I compensate my sales force?”
“How do I reduce the number of failed credit
card transactions?”
“Should I charge a setup or implementation
fee?”
“How do I account for multi-year contracts?”
“As I expand internationally, what payment or tax
issues will I encounter?”
“Should I offer monthly or annual billing periods?”
“I wish there was a blueprint”
What if We Could Create a Blueprint
We analyzed 6 years of data
You are trying to Price
Acquire
Bill
Collect
Nurture
Account
Measure
Iterate
Scale
Price
11%
Acquire
12%
Bill
14%
Collect
12%
Nurture
11%
Account
11%
Measure
9%
Iterate
11%
Scale
9%
Support Cases Categoriz...
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Introducing	
  the	
  9	
  Keys	
  t...
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Simple per-unit
pricing
Infinite
pricing options
2220000000	
  
?	
  
A new way to think about pricing
Increase
Cash Flow
Drive Down
Cost of Sales
Outflank the
competition
Grab Market
Share
Increase
Loyalty and
Retention
Pivo...
TheAbility to
Price in support of your business goals
is the first Key for
Success in the Subscription Economy
Itsoundseasy
Billing
Gateways
fulfillment
provisioning
Immediate or
delayed payment
Connect to
CRM
Notify
Connect to
accounting
Self se...
We live in a B2Any world
B2C B2B
The Ability to
Quickly Acquire Customers in a B2Any World
is the second Key for
Success in the Subscription Economy	
  
Andrew Lam-Po-Tang
Billing used to be simple
Ship Bill
$10	
  
new
customers
Existing
customers
Pro-rate Usage
Ship Bill
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Confused	
  customers	
  
Weeks	
  t...
The Ability to
Create Accurate, Clear Invoices at Scale
is the third Key for
Success in the Subscription Economy	
  
Electronic payments Non-electronic payments
Credit Cards Debit Cards Wire transfers
Catch exceptions
Multiple card types
C...
The need to automate
ACH
Handling of Exceptions
The Ability to
Tame the Complexity of Payments
is the fourth Key for
Success in the Subscription Economy	
  
Bill Plummer
Build Valuable Relationships
The Secret:
Give Customers Control of the
Relationship
Remember the
2nd Key:
Acquire?
Subscribe
That Was Just
the Beginning
Subscribe
Renew
Suspend
Add-on
Upgrade
Sign	
  up	
  
Validate	
  CC	
   Validated	
  
Create	
  Bill	
  
Process	
  
Payment	
  
Create	
  
Account	
  
Link	
  ...
The Ability to
Nuture And Develop Deeper Customer
Relationships
is the fifth Key for
Success in the Subscription Economy	
...
Andre Pimentel
“I’ve got this massive spreadsheet I use
to track Revenue”
“It’s Taking Longer and Longer to Close
My Books”
“It’s becoming harder to harder to
reconcile financial info across all my
different systems”
“The IT department used to be known
as Dr. No …. But now, it’s the finance
department”
There’s no accounting for subscriptions
Booking
Subscription
Billing
Cash
Revenue
The Ability to
Easily and Quickly Account for
Bookings, Billings, Cash and Revenue
is the sixth Key for
Success in the Sub...
You used to track these metrics
Revenue 	
  $100	
  	
  
	
  	
  COGS 	
  	
  	
  	
  	
  	
  	
  (30)	
  
Gross	
  Profit ...
Now you track these metrics
ARR 	
  $100	
  	
  
	
  	
  Churn 	
  	
  	
  	
  	
  	
  	
  (10)	
  
Net	
  ARR 	
  90	
  	...
Your current applications don’t give you the
metrics you need
The Ability to
Instantly Access
Subscription Economy Metrics
is the seventh key for
Success in the Subscription Economy	
  
Chuck Best
Pricing iteration is crucial to support growth
You can’t afford this …
“The next available engineer will
see you in 6 months”
The ability to
Rapidly Iterate On Your Pricing and
Acquisition Strategies
is the eighth key for
Success in the Subscriptio...
Why build all this into your service?
Pricing
Payments
Taxation
Billing
Rev Rec
Secure
Mission Critical
Scalable
Rating
When you could do this?
Integratewithanecosystemthatsupportsyour
service
Customer	
  
support	
  
Inventory	
  
Fulfillment	
  
EnDtlements	
  
Web...
The ability to
Run on a Scalable, Reliable, Mission
Critical Infrastructure
is the ninth key for
Success in the Subscripti...
Cathy MacDonald
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Introducing	
  the	
  9	
  Keys	
  t...
There have been moments where we took
a leap forward in our understanding of the
world
1789
1215
1687
1905
1980
2013
Today we are taking a leap forward,
together, in our understanding of the
Subscription Economy
Mike Pearl, PwC
AJ Bernstein, Acxiom
Confidential and Proprietary Information. Do not distribute beyond intended audience.
Introducing	
  the	
  9	
  Keys	
  t...
We are wrapping everything we do at
Zuora around these 9 Keys
Our Second Announcement
Why Are We Here?
Why is the Subscription Economy an
Unstoppable Force
There is a Better Way of Doing Business
Win / Win Relationships
Transfer of Assets
not
Stable Recurring Revenue Built on
Loyal Customers
Massive investment of capital with
unpredictable outcomes
not
Efficient use of resources
More Pens, More Cars, More Phones,
More Landfills
not
Subscription Business Model
Is The Better Way
Today, businesses must focus on
•  Deeper customer relationships versus one-time
transactions
•  Fair, value-based pricing...
If You Believe in a Better Way to Build a
Business
Join the Revolution
Sign the Manifesto
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
Subscribed 2013 San Francisco: CEO's Keynote
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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 customers, why the Subscription Economy is unstoppable -- and so can your business.

Published in: Economy & Finance, Business
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Transcript of "Subscribed 2013 San Francisco: CEO's Keynote"

  1. 1. TheWorldisMovingtoaSubscriptionEconomy
  2. 2. Amazon Prime slide
  3. 3. United slide
  4. 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. 5. Zuora Receives £36m For European Expansion It’s Spreading Around the Globe
  6. 6. It’s Invading F500 BoardroomsIt’s Invading F500 Boardrooms
  7. 7. You are the Face of Innovation today
  8. 8. You are the Unstoppable
  9. 9. 1 New Product Created Every Hour On Average …
  10. 10. 10X transaction growth in 12 months 10,012,288 1,536,533 AUG 2012 AUG 2013
  11. 11. 20Billion Contracted Invoice Volume
  12. 12. Staying ahead of the UnstoppableStaying ahead of the Unstoppable
  13. 13. 25X 10X60X Faster Syncs Faster bill runs More capacity
  14. 14. Exponential investments in customer success 2012 2013
  15. 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. 16. So What’s Next?
  17. 17. “What is the best way to price?”
  18. 18. “How do I reduce churn?”
  19. 19. “How should I compensate my sales force?”
  20. 20. “How do I reduce the number of failed credit card transactions?”
  21. 21. “Should I charge a setup or implementation fee?”
  22. 22. “How do I account for multi-year contracts?”
  23. 23. “As I expand internationally, what payment or tax issues will I encounter?”
  24. 24. “Should I offer monthly or annual billing periods?”
  25. 25. “I wish there was a blueprint”
  26. 26. What if We Could Create a Blueprint
  27. 27. We analyzed 6 years of data
  28. 28. You are trying to Price Acquire Bill Collect Nurture Account Measure Iterate Scale
  29. 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. 30. Confidential and Proprietary Information. Do not distribute beyond intended audience. Introducing  the  9  Keys  to  Success  in  the  Subscrip2on  Economy    
  31. 31. Confidential and Proprietary Information. Do not distribute beyond intended audience.
  32. 32. Simple per-unit pricing Infinite pricing options
  33. 33. 2220000000   ?   A new way to think about pricing
  34. 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. 35. TheAbility to Price in support of your business goals is the first Key for Success in the Subscription Economy
  36. 36. Itsoundseasy
  37. 37. Billing Gateways fulfillment provisioning Immediate or delayed payment Connect to CRM Notify Connect to accounting Self service vs assisted flows Butit’sHarderThanItSeems
  38. 38. We live in a B2Any world B2C B2B
  39. 39. The Ability to Quickly Acquire Customers in a B2Any World is the second Key for Success in the Subscription Economy  
  40. 40. Andrew Lam-Po-Tang
  41. 41. Billing used to be simple Ship Bill
  42. 42. $10   new customers Existing customers Pro-rate Usage Ship Bill
  43. 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. 44. The Ability to Create Accurate, Clear Invoices at Scale is the third Key for Success in the Subscription Economy  
  45. 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. 46. The need to automate ACH
  47. 47. Handling of Exceptions
  48. 48. The Ability to Tame the Complexity of Payments is the fourth Key for Success in the Subscription Economy  
  49. 49. Bill Plummer
  50. 50. Build Valuable Relationships
  51. 51. The Secret: Give Customers Control of the Relationship
  52. 52. Remember the 2nd Key: Acquire? Subscribe
  53. 53. That Was Just the Beginning Subscribe Renew Suspend Add-on Upgrade
  54. 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. 55. The Ability to Nuture And Develop Deeper Customer Relationships is the fifth Key for Success in the Subscription Economy  
  56. 56. Andre Pimentel
  57. 57. “I’ve got this massive spreadsheet I use to track Revenue”
  58. 58. “It’s Taking Longer and Longer to Close My Books”
  59. 59. “It’s becoming harder to harder to reconcile financial info across all my different systems”
  60. 60. “The IT department used to be known as Dr. No …. But now, it’s the finance department”
  61. 61. There’s no accounting for subscriptions Booking Subscription Billing Cash Revenue
  62. 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. 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. 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. 65. Your current applications don’t give you the metrics you need
  66. 66. The Ability to Instantly Access Subscription Economy Metrics is the seventh key for Success in the Subscription Economy  
  67. 67. Chuck Best
  68. 68. Pricing iteration is crucial to support growth
  69. 69. You can’t afford this … “The next available engineer will see you in 6 months”
  70. 70. The ability to Rapidly Iterate On Your Pricing and Acquisition Strategies is the eighth key for Success in the Subscription Economy  
  71. 71. Why build all this into your service? Pricing Payments Taxation Billing Rev Rec Secure Mission Critical Scalable Rating
  72. 72. When you could do this?
  73. 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. 74. The ability to Run on a Scalable, Reliable, Mission Critical Infrastructure is the ninth key for Success in the Subscription Economy
  75. 75. Cathy MacDonald
  76. 76. Confidential and Proprietary Information. Do not distribute beyond intended audience. Introducing  the  9  Keys  to  Success  in  the  Subscrip2on  Economy    
  77. 77. There have been moments where we took a leap forward in our understanding of the world
  78. 78. 1789 1215 1687 1905 1980 2013
  79. 79. Today we are taking a leap forward, together, in our understanding of the Subscription Economy
  80. 80. Mike Pearl, PwC AJ Bernstein, Acxiom
  81. 81. Confidential and Proprietary Information. Do not distribute beyond intended audience. Introducing  the  9  Keys  to  Success  in  the  Subscrip2on  Economy    
  82. 82. We are wrapping everything we do at Zuora around these 9 Keys
  83. 83. Our Second Announcement
  84. 84. Why Are We Here?
  85. 85. Why is the Subscription Economy an Unstoppable Force
  86. 86. There is a Better Way of Doing Business
  87. 87. Win / Win Relationships Transfer of Assets not
  88. 88. Stable Recurring Revenue Built on Loyal Customers Massive investment of capital with unpredictable outcomes not
  89. 89. Efficient use of resources More Pens, More Cars, More Phones, More Landfills not
  90. 90. Subscription Business Model Is The Better Way
  91. 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. 92. If You Believe in a Better Way to Build a Business Join the Revolution Sign the Manifesto
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