Subscriptions link the value propositions of customer usage to outcomes. To achieve this business model, traditional product companies need to reinvent innovation cycles, product development approaches, sales and marketing tactics, and customer support functions. There are many obstacles to this transformation — but it’s doable. Three main observations when defining your strategy for driving subscription revenues are that:

  • New operational capabilities drive the subscription model. The subscription model changes the way you invent and develop your products, go to market, and service your customers. More interactive customer engagement and outcome-based pricing are key.
  • Subscriptions let customers pay for consumption and avoid up-front charges. Subscriptions open opportunities for new value propositions in a post-COVID-19 world. Offerings become more embedded in the changing context of clients’ customer journeys.
  • New technology and processes are key to achieving the subscription model. The subscription business model alters value propositions, cash flow dynamics, sales incentives, and customer support functions. You’ll need to create new billing systems and production processes.

The report “Get Ready For The Subscription Business” outlines five steps to tap into recurring revenue streams. It helps business leaders build the capabilities that CIOs and tech decision-makers must master, as well as the actions to take to navigate each phase of becoming an advanced subscription business.