In all industries the world over, we are seeing a fundamental shift in business models. Companies are moving away from traditional one-off product sales and are instead increasingly competing to launch innovative new digital services. And the new approach that the subscription revolution has brought represents a huge opportunity for digital marketers to reach out and engage with customers and prospects and build ongoing relationships that generate sustainable revenue streams and deliver cumulative value over time.
In particular, the new subscription-based model allows marketers to interact repeatedly with customers; get feedback from them and use the intelligence gained to cross-sell and up-sell new services. And this emphasis on the relationship gives rise to exciting new opportunities as loyal subscribers are alerted to new promotional offers or rewarded with access to special discounted deals, for example.
The focus on subscriptions may have been pioneered by newspapers and magazines and the media industry in general, but we are now seeing examples across all sectors of the economy. They include everything from automotive manufacturers offering digital services into vehicles for a set monthly fee, to the goods-as-a-service model where domestic purchases from fresh fruit to socks, and from washing machines to televisions, can be offered on an ‘as-a-service’ basis. We are also seeing instances in education where training colleges are offering personal tuition on a subscription basis to interested students or in the connected home market where appliances, lights and security systems can all be controlled remotely for a monthly fee.
Gauging the Challenge
Unfortunately, while the rewards that the subscription-based model can deliver are great, not least in the potential it offers to change the whole digital marketing landscape, achieving those rewards is not always straightforward. In the world of digital services, differentiation can be hard to achieve. Business ideas can be easily replicated, and competitors can enter the market and undercut on price by developing services at a cheaper location, for example.
The service provider needs to add more strings to its bow to retain its market edge. It needs to add more options for its customers, more flexibility around how it prices and packages its services – and it needs to roll out more digital marketing strategies to add value and strengthen its level of engagement with customers and prospects. Also, it must do all of these things without increasing its overheads.
This is where, despite its flexibility and creativity, a business can get held back by a seemingly straightforward back office process – its billing.
A business model based on subscriptions and usage needs to be able to offer variable pricing plans, which means investing in some kind of billing system. However, traditional on-premise billing systems are typically too expensive, or not agile enough, to handle this requirement. On top of this, they often take years to implement, configure and integrate with other applications.
The alternative is cloud billing which can dramatically cut the time taken and the costs incurred in setting up new services. Implementation can be done in-house in a matter of weeks or even days, and the business only needs to begin paying for the application once it starts being used commercially. Furthermore, users benefit from regular automatic software upgrades providing more options to stay one step ahead of the competition.
Once again, therefore, we are seeing an example of the cloud breaking down the barriers for businesses as they embrace the subscription revolution – and providing a more optimistic outlook for those wanting to develop dynamic digital marketing campaigns and monetise their service offerings.
So it’s positive news for digital marketers. And the overriding message is: now’s the time to reinvent how you bring new digital products and services to market – cloud billing solutions can help you do this quicker, more easily, more cost effectively and with greater flexibility, maximising the rewards you can gain as a result.
By Louis Hall, CEO of Cerillion Technologies.
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