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5 Key Lessons From The Subscription Experience with Zuora

  • SUBTA Team
  • Mar 26, 2021
  • 7 minute read

Yesterday, Zuora hosted The Subscription Experience broadcast, an event for brands with a subscription model or those looking to add this component to their business strategy. From dissecting the evolution of consumer behavior to understanding subscription best practices regarding operations, billing and marketing, this event covered a wide range of topics for the subscription community to learn from. 

Zuora’s CEO and Founder Ten Tzuo helped kick off the event in the keynote address, which was delivered in the form of a documentary that reflected on what the U.S. economy had gone through in the last year. 

“The pandemic moved [the subscription economy] forward 10 years in 10 months,” he said. The rise of the subscription industry started happening prior to the global health crisis, but the accelerated timeline Tzuo referred to shows that a seismic shift is taking place right before our eyes.

 Zuora’s CEO and Founder Ten Tzuo speaks at The Subscription Experience

Key Takeaways from Zuora’ Subscription Experience

Ownership is as Fragile as Ever

The days of purchasing a product and proudly owning it are starting to dwindle. The modern consumer is not interested in the burden linked to ownership, according to Zuora experts. The concept of ownership started fading away before 2020, with people wanting to enjoy the benefits of usership through subscription.

More than 70% of consumers want to pay for a product based on their usage, according to Zuora. The business model alleviates consumers from the burden of ownership while offering the same benefits, and companies that offer usage-based pricing see better growth than their counterparts. In fact, companies that earn a quarter of their revenue in usage-based pricing grew by more than 20% year-over-year, according to the Subscribed Institute

The journey to usership is done in four steps, according to Amy Konary, Vice President and Vice Chair of the Subscribed Institute:

As seen on The Subscription Experience
  • Launch – The exciting phase
  • Optimize – The chance to test, gain insights and invest in effective strategies while remaining agile
  • Scale – Time to focus on your operations! Level up!
  • Lead – Dominate your market category, but get ready for some competition. Data will help you stay ahead of the curve, along with your ability to satisfy a growing customer base. 


Subscriptions are Relationships

“That moment of transaction is the starting line not the finish line with subscriptions,” Robbie Kellman Baxter, best selling subscription author and consultant, said at the event.  

Ownership is not only a burden, it provides no value outside of the product purchased. Subscription brands offer much more than that. They provide a stable relationship with customers while adding more value with each service or goods delivered, and often keeping the consumer engaged between the transmission of those goods or services. Many subscription brands build communities, as we’ve seen with SUBTA members Splendies, Sparkle Hustle Grow, and Hunt A Killer. 

A subscription model requires brands to proactively identify success metrics that go beyond the transaction, rather than be reactive to what a customer may want or need in the future. Understanding the customer’s personal and business objectives, creating additional resources for them, and maintaining that relationship decreases the likelihood that they will churn. 

The Focus is on the Customer

Subscription brands are not — or at least shouldn’t be — focusing solely on the product, unlike their traditional counterparts. Successful businesses, especially within the subscription space, must increasingly keep their eyes on the customers any way they can:

  • Listening to feedback
  • Designing an approachable and user-friendly website
  • Various subscription offerings
  • Accessible customer service

These elements will help any subscription business big or small prioritize the wants and needs of its customers. 

As companies work to further integrate these customer-first tactics into their businesses, it will help dictate the teams’ focuses and budgets. Philips’ Chief of Innovation and Strategy Officer Jeroan Tas, for example, spoke on his company’s commitment to prioritizing its customers’ needs.

Philips’ goal is to provide care to more than two billion people, and the only way to do so is through accessibility. By investing in new phone applications and software, the healthcare company can reach more people across the globe and help facilitate world-class care in innovative ways. 

Jeroan Tas, Philips’ Chief of Innovation and Strategy Officer, speaking at The Subscription Experience

Flexible Payments & The Rebirth of Free Trials 

The coronavirus pandemic reiterated the need for businesses to remain flexible and look for ways to constantly meet their customer’s unique needs. The finances of both companies and customers were uniquely strained in 2020. It became more important than ever for subscriptions to adapt to customer’s payment preferences. 

People want to know the product or service is going to work and fulfill their needs before they make a purchase. Offering free trials allow subscription companies to lower their customer acquisition costs while establishing a relationship with very little commitment on the consumer’s end. That little commitment goes a long way with setting potential subscribers into the business’ pipeline and working to convert them to fully paying subscribers. 

Turning a passive customer into an active subscriber can also be done with agility and flexibility. Offering a wide variety of payment and subscription options can help personalize the consumer’s experience and provide a sense of comfort. Offering annual, quarterly or monthly plans does not make a potential customer feel trapped, moreso empowered. On the other hand, enabling customers to pause their subscription whenever they’d like helps build this trustworthy relationship between a brand and its subscriber. It also reduces the chance that they’ll churn since the customer now has the freedom to simply take a break from products or services temporarily. 

Scaling your Subscription Business Requires the Perfect Team

Growth requires cohesion, that’s no secret. In the human body, cells work together to ensure healthy and sustainable growth, and the same should be done for a business. Except, instead of cells, it’s people who have to work as a unit. 

Operating a subscription requires processes, goals, and structures that are different than a traditional business. 

“It’s a different motion,” said Christopher Nelson, the Senior Director of Enterprise Application for Gitlab.

Good leadership requires a clear understanding of the specific needs a subscription model entails. Whether a company is adding a new subscription component to their existing model or growing a subscription-specific brand, Nelson advises companies to find someone who can anchor the team. Often, that person is the Business System Analyst (BSA). The individual in question can pinpoint how the processes and systems need to function. With so many moving parts in subscription, the person chosen to be the anchor needs to be highly qualified in this model to get the job done the right way.

Going beyond qualifications and focusing on your team’s mindset is equally important. This is especially true if a company is adding subscriptions to the existing strategy or pivoting to the model entirely. Subscription businesses rely on their customers to succeed. It’s not about closing a sale anymore; it’s about developing a long-term relationship with a subscriber that provides value for both parties. Once again, the focus is on the customer, not on the product sold. This may take retraining of your existing team and time to make the transition to subscription. 

The Subscription Revolution

The subscription space is lightyears ahead of any expert predictions in 2021, and whether or not the industry wants to admit it, it’s mostly due to the coronavirus pandemic. In a year that saw businesses closing, declaring bankruptcy or laying off employees, 2020 taught us all a valuable lesson: Flexibility is key.

The subscription movement is as significant and will be as impactful as the industrial revolution that took place in the 20th century, according to Tzuo. Zuora’s CEO went on to say it was comparable to the invention of the internet. Tzuo is not the only one who strongly believes in subscription. SUBTA Co-Founder and Chairman Chris George says the future looks bright. “I bet you by the end of 2022, you’re gonna see subscription in every part of our lives,” he said while reflecting on Zuora’s CEO’s comments.

While we might not know if Tzuo is right as of this moment, his statement reveals a lot about what kind of impact the subscription industry could have on modern society and business transactions as we know them.