For my role in Cloud Blue, Fortune 500 companies often turn to me for help solving technology challenges when moving to a subscription business model, simply to realize that they have not taken the necessary organizational steps to ensure a successful transition. Subscriptions scale better, enhance the customer experience, and retain the promise of repeat and more predictable revenue streams – a fantastic tempting prospect for any business.
This business model has dominated the software as a service (SaaS), but it’s hard to find an industry that doesn’t have a successful subscription story. Growing companies in the fields of health, education, professional development and home maintenance, ranging from automobiles, airlines, gaming and health, have launched subscription services in recent years. But businesses should be aware that the subscription model is much more than just putting a monthly or annual price tag on their offer.
Executives can’t just put a subscription model on top of an existing business. All of their stakeholders need to ship, change the whole operation process, re-collect their strategy, and create a subscription culture. Business 70% of business leaders believe that subscriptions will be the key to their future, only 55% of companies believe they are ready for this transfer. Before talking about technology, which serves as and enabler, companies must first plan the key issues below in detail and switch to a recurring revenue model.
Legacy firms accustomed to paying for models as you go may consider moving to a subscription model only as a sales issue. They are wrong. Such transfers will affect almost every department across an organization, from product development and production to finance, sales, marketing and customer service.
Leaders must inspire all stakeholders to change and empower them to be actively prepared for transformation. The better you prepare, the easier the transition will be. But as we know, people do not naturally like change, even if it is in their own interest. So it can be a great job to secure the cooperation of all internal stakeholders, which can number in the thousands depending on the size of your organization.