Best of Both Worlds: Bundling Hard Goods and Subscriptions (Subscribed13)


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Netgear - Jason Egnal, Director, Internet Marketing
TopCon - Martijn Hoppenbrouwers, IT Director

Interested in learning how to use a single billing system across multiple product types and business units, or how to integrate your traditional ERP with subscriptions in Zuora? In this session, we will explore how to consolidate your transaction processing systems for physical product sales and subscriptions, maximizing rates by bundling physical products and associated subscriptions.

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Best of Both Worlds: Bundling Hard Goods and Subscriptions (Subscribed13)

  1. 1. Best of Both Worlds: Bundling Hard Goods and Subscriptions Jason Egnal Director, Internet Marketing
  2. 2. The Nine Keys to Subscription Success $ PRICE   ACQUIRE   BILL   COLLECT   NURTURE   ACCOUNT   MEASURE   ITERATE   SCALE  
  3. 3. Agenda   1.  Introduc=on   2.  Billing?   3.  4  Subscrip=on  Essen=als   4.  Lessons  Learned   5.  Wrap  Up  &  QA    
  4. 4. About  The  Presenter   Background   @Netgear   Exper=se   J a s o n   E g n a l   Manage  Ecommerce  and  Internet  Marke3ng  for  NETGEAR's  global  web   proper3es.   Establishing  and  managing  corporate  web  presence.     Driving  sales  through  direct  marke3ng  strategies  and  programs.   Over  15  years  of  experience  in  Ecommerce  billing  systems.   Founded,  raised  capital  and  sold  business  with  subscrip3on-­‐based   revenue  models.  
  5. 5. NETGEAR   W e   c h a m p i o n   c o n n e c 3 v i t y   s o   y o u   c a n   d o   m o r e .   •  1.2  BN  Revenue     •  Market  Cap  1.1  BN   •  Retail   •  Commercial   •  Service  Providers     •  July  2012  Netgear  acquires  VueZone   •  Founded  2003,  raised  $19m   •  Home  Video  Monitoring      
  6. 6. Why  a  Billing  System?   Background   Business  Model   The  Challenge   Hardware  product  operated  in  the  Cloud.   Long-­‐term  rela3onship  with  customer.   Rich,  interac3ve  service,  costly  to  provide   B2B  +  B2C   Direct:   Channels:  Costco,  Amazon,  Service  Providers.   Implement  service  payment  plans  before  end  of  first  free  year.   Establish  if  our  customers  would  pay  a  recurring  service  fee.   Limited  budget.    
  7. 7. Implementa=on   Analysis   Integra=on   Provisioning   Product  Catalogue   •  Hardware   •  Service  Plans       Tradi3onal  ecommerce  shopping  cart.   Inventory  Management.   Cloud  Services.     Registra3on.   Features  by  Service  Plan.   Expira3on.    
  8. 8. 4  Subscrip=on  Essen=als   Test  the  market  with   different  offers  at   different  touch  points  in   the  customer  lifecycle.     Price  by  customer   segment.     1 2 P R I C E ,   A C Q U I R E ,   R E P O R T ,   S C A L E   Add  mul<ple  channels,   addi<onal  languages,   mul<ple  partners,  more   customers  .   4 Manage  a  global  rollout   with  country-­‐specific   pricing,  mul<ple  en<<es   and  complex  taxa<on.     3
  9. 9. Subscrip=on  Essen=al  :  Price   V u e Z o n e   P r i c i n g   &   P a c k i n g   J o u r n e y   We  ini3ally  launched  with  the  first  month  free     First     Year  Month   Free   Bundles   Tested  System/ Service  Plan   bundles,  addi3onal   free  months,   accessory  bundles.     VueZone  Basic/ Premier/Elite   Next  we  offered   upgrades     Restructured   Plan  Features     App  adack!   Adach  rate  explosion.    
  10. 10. Subscrip=on  Essen=al  :  Iterate   P R I C I N G   B Y   C U S T O M E R   S E G M E N T   S I G N I F I C A N T L Y   I N C R E A S E D   A T T A C H   R A T E   Offered  all   customers  the   same  incen=ves  at   all  touch  points   Provided  different   offers  to  different   customers  at   different  =mes   Op=mized   subscrip=on  offer   based  on  channel,   past  promo=ons,   product  ownership  
  11. 11. Subscrip=on  Essen=al  :  Report   G L O B A L   R O L L O U T   Account  for  mul=ple  plans  with   frequent  upgrades,  downgrades   and  refunds.     Do  it  globally.  
  12. 12. Subscrip=on  Essen=al  :  Scale   G R O W   G L O B A L L Y   T O   D R I V E   $   G R O W T H   ACME   Inc.     Began  with  the  US     market  only,    1  currency,  two  channels  and  a   small  team.   Acquisi=on  brought  mul=ple   channels,  addi=onal  markets,  a  large   accoun=ng  department  and  a  global   customer  support  infrastructure.      
  13. 13. Lessons  Learned   Flexible   B E S T   P R A C T I C E S   Experiment   Simplify   Understand  your  billing  systems  capabili3es  and  make  it  conform   to  your  business   An  un3dy  product  catalogue  is  not  an  un3dy  room       Keep  your  billing  prac3ces  simple      
  14. 14. Wrap  Up   Test  the  market  at   different  price  points  and   touch  points.         Bundle!   Know  your  customer.       Where  they  purchase.   How  they  use  your   product.       Think  big  -­‐  it  happens   sooner  than  you’d  expect.     Your  company  is  global.     Subscribers  cross  borders   and  currencies  with  no   regard  for  regula<ons.     PRICE   ACQUIRE   REPORT   SCALE  
  15. 15. Q&A   Thank  You!  
  16. 16. From Hardware to Solutions Introducing Subscription business at Topcon Dave Vopnford Solutions Architect Martijn Hoppenbrouwers Director IT Business Solutions &
  17. 17. The Nine Keys to Subscription Success $ PRICE   ACQUIRE   BILL   COLLECT   NURTURE   ACCOUNT   MEASURE   ITERATE   SCALE  
  18. 18. Founded  in  1932:  Tokyo  Op3cal  Instrument    Company   World  leader  in  Precision  Measurement  and  Posi3oning   Solu3ons     Major  Shareholder:  Toshiba  Corpora3on     3  Major  Companies   Posi3oning   Smart  Infrastructure   Eye  Care   About  Topcon  
  19. 19. 2009   Road  to  Saas   Emergence  as  soiware  as  key   component  of  business  model.   Tradi3onal  ERP  no  longer   suffices     2010   2011   2012   2013   Online  self   service  tools   introduced.     Stabiliza3on   &   healthcheck   period.     Saas  as   standard.   Upgrades,   renewals,  direct   delivery.  
  20. 20. Most,  but  not  all,  subscrip3ons  are  sold  as  part  of  kits  including   hardware.    Most,  but  not  all,  kits  have  an  ini3al  free  or  pre-­‐paid   period.       Soiware  sold  to  a  distributor  with  subscrip3ons  need  to  be   ac3vated  by  customers.     Subscrip3ons  need  to  be  tracked  by  ac3vated  device,   distributor,  end  user  and  ac3vated  modules.    The  hardware   needs  to  be  able  to  check  in  with  SaaS  plakorm     for  available  and  ac3ve  modules.          Our  Subscrip=on  Susiness  
  21. 21. Today   At  Implementa=on   Our  Challenges   •  We  were  building  our  first  SaaS  plakorm.  This  is  a  learning   process,  with  many  unknowns.  It  took  some  itera3ons  to   get  right.     •  Risk  of  losing  focus  –  we  are  a  small  team  that  was   simultaneously  implemen3ng  SAP  for  our  company.   •  Based  on  our  implementa3on  experiences  we  have  been   able  to  steadily  increase  our  offerings;  upgrades,   maintenance  packages,  online  ac3va3ons.   •  SaaS  is  being  supported  by  all  the  regular  business  func3ons   through  Zuora,  SalesForce  and  SAP.  
  22. 22. To  use  available  technology  and  tools  as  much  as  possible,  in   order  to  leverage  exis3ng  best  prac3ces  to  the  fullest.     Maximize  our  flexibility  by  minimizing  our  reliance  on  on-­‐ premise  and  pre-­‐SaaS  control-­‐centric  tools.   Our Approach
  23. 23. Model   Distributors   Distributor  Orders   Distributor  Invoices   Products/Part  Numbers     Order  Triggers   Product  Triggers   Product  Modules   Sobware  Serial  Numbers   Ac=va=on  Codes   End  User  Companies  and  users   Cer=ficates   Communica=ons     Product  Catalog   Subscrip=ons   End  User  Invoices   Credit  Card  Data      
  24. 24. All  integra3ons  created  internally  with  Zuora  order   builder  func3ons:     •  Create  accounts   •  Create  payments  func3ons   •  Create  subscrip3ons   •  Modify  subscrip3ons   •  Process  direct  and  distributor  sales   •  Manage  reminders,  renewals  and  upgrades   Development  
  25. 25. Topcon  created,  owned,  cloud  based  SaaS  plakorm.  Single  set   of  func3ons  rolled  out  to  mul3ple  product  development   groups.     No  implementa3on  or  consul3ng  cost.  No  added  headcount   un3l  business  model  had  proven  revenue!   Mission  Accomplished  
  26. 26. Interna=onal  Rollout  
  27. 27. Q&A   Thank  You!