The Evolving Role of Payments In a Customer Centric World
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Chargebee's presentation from our recent talk at the Worldpay Rethink workshop held in Chennai, India. The presentation, titled 'Evolving Role of Payments in a Customer Centric World', will take you through why we think pricing and payments are integral components of any recurring revenue relationship.
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The Evolving Role of Payments In a Customer Centric World
- 1. Evolving Role of Payments in a Customer Centric World Worldpay - Rethink
- 2. The shift in the revenue model Traditional Software Licensing Business Model One-time Sale of Software Success Depends on Sale of Software Copies CAPEX Model Software-as-a-Service Business Model Recurring Revenue Relationship Success Depends on Number of Customers OPEX Model
- 3. And this has resulted in industry buzzwords such as Customer Success
- 4. Customer ROIProduct ROI Product Focus
- 5. So What Role Do Payments Play In This?
- 6. Pricing - an integral component in any recurring revenue relationship … And in SaaS, it’s tricky! The shift from CAPEX model to OPEX model is driving the shift in how products are priced and customers are acquired.
- 7. The ability to accept frictionless payments globally is an essential component … And any friction here will lead to customer churn
- 8. Ingredients of Operational Hygiene in Frictionless Payments The ability to - assess risk - graceful recovery from payment failures - accurate revenue management
- 10. Thank you!
Editor's Notes
- Shift in traditional software licensing business models to SaaS model by business owners The success of the business does not depend anymore on how many copies of software is sold, but in how many customers are using your product on a recurring basis The economics of licensed software do not apply in SaaS business model when evaluating capital, profitability and business value. In SaaS business model where Recurring Revenue Relationship is the basis, the focus on Customer ROI is more pronounced, as the value from customer is realised over the entire duration of the relationship.
- Why tricky? Very FEW businesses get pricing right the first time. After developing your app, you have to decide how to price it. Price too high and you risk locking out potential customers. Price too low and you risk losing out on revenues. How do you determine the right price for your service? The “right” price is subjective. For SaaS founders, this is even trickier since they are selling services and not product which have fixed costs. How do you price the thousands of lines of code running your app plus the support you will offer? Shift from CAPEX to OPEX model - Taking care of the operational side of subscription management and billing (adding credits, extending the trial period, changing the billing date, offering a discount, activating/cancelling a subscription, etc.). These are the tasks that are generally carried out by your sales/ marketing/customer support team, and are pivotal in managing your customer relationships.
- collecting payments from customers, through a flexible range of payment options (credit cards, debit cards, PayPal, Amazon Payments, ACH, wire transfer, checks, cash, etc.) should be made possible, frictionless and automatic. This is non-negotiable as any amount of friction will lead to customer churn. http://merchantaccounts.expertmarket.co.uk/online-payment-methods-around-the-world
- How do we add more value to the product to enable ppl to pay more. And how payment plays a crucial role
- Customer experience needs to be looked at wholistically all the way from first touch point through product experience, billing and customer support experience and payments plays an integral role in the new world.