New Publishing Tech
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Q&A: Zuora, driving the subscription economy for publishers

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Headquartered in San Mateo, CA, with satellite offices across North America, Europe, China, India, Japan, and Australia, Zuora is one of the world’s leading subscription management platforms, with 800+ employees and client publishers of the ilk of the FT, News UK, Seattle Times, Guardian, and others. WNIP caught up with Zuora’s EMEA MD, John Phillips, to find out more…

Can you give us some background about your company?

Prior to founding Zuora, Tien Tzuo, our founder and CEO, was the 11th employee at Salesforce where he worked alongside Marc Benioff, eventually rising to become the company’s CMO.

As a marketer at Salesforce – which became the world’s first Software-as-a-Service (SaaS) company – he often says that he had to think in terms of subscribers, not customers. The relationship with subscribers was not about a product or transaction, but instead about building long-term loyalty by focusing on the subscription experience, which is personalized and exists over time.

The idea for Zuora came to be during a meeting at Salesforce between Tien, Marc Benioff and two employees from WebEx named K.V. Rao and Cheng Zuo. They spent a lot of time complaining about what a headache billing was for subscription companies, the complexities of different currencies, tax laws, pricing and packaging models, and eventually founded Zuora.

There’s a huge opportunity in subscriptions, but they’re also a lot more complicated than transactional sales because you’re adding time and recurring billing, along with upgrades, downgrades and different pricing bundles. As we’ve seen, the customer relationship is fundamental in a subscription model, and billing is key to that relationship…

What is your core product addressing this problem?

The new imperative for companies in the Subscription Economy is to establish meaningful, long-term relationships with customers by providing recurring value. However, many are challenged by the inherent complexities of maintaining and scaling a subscription business.

Our core offering, Zuora Central, is a software platform that helps publishers eliminate these complexities, drive growth, and refocus their efforts with the customer at the center of their businesses. It makes it much easier for publishers to manage ongoing subscriber relationships and keep up with fast-changing go-to-market strategies.

It helps put the customer at the heart of publishers’ subscription-based products and services, by breaking down those silos with an end-to-end solution that allows them to react to changing customer needs, quickly experiment and iterate their offerings, and maximize the monetization potential of their existing subscribers.

We also provide publishers with the opportunity to tap into rich customer data sets obtained through their subscriptions. They can use this data to better price, package and sell their products on a recurring basis. Flexible and convenient subscriptions are increasingly important as the way we consume content continues to evolve. Just look at the Financial Times, whose subscription-based business is so successful that it is now sharing its subscription learnings with the world via FT Strategies.

We also offer Zuora Collect, an add-on product that connects publishers with other Zuora billing, insights and relationship management software, as well as other third-party applications, so that publishers can optimize collections for their subscription business. This enables them to minimize churn, reduce costs and making it easier for customers to pay with a self-service web portal or multiple payment methods for one subscription.

Can you give some examples of publishers successfully using your solution?

The Financial Times needed to react to changing market demands and launch a digital subscription revenue stream. Before implementing Zuora, the FT was running legacy systems which lacked the flexibility and agility necessary to support their changing business needs. In addition, they lacked visibility of customer usage data, which hindered their ability to drive further engagement. After working with Zuora to implement its Zuora Billing platform, the FT was equipped with more agility to drive customer acquisition and increase long term customer value (LTV).

During Brexit weekend, FT dropped its paywall for all Brexit related news and naturally saw a traffic spike. Consumers, inspired by the quality of content wanted also buy subscriptions. Zuora’s platform empowered the FT to experiment with new offerings, services and pricing during this surge, which led to a 600% increase in digital subscriptions.

Zuora’s Central platform also powers The Guardian’s memberships from acquisition, billing and payment to financial reporting and relationship management. The Guardian, whose membership program is held up as a best-in-class example, is now able to go to market quicker with flexible programs that help further cultivate its community of readers.

Pricing?

We base our pricing on specific requirements and, so, pricing is bespoke for each customer depending on their size and the number of transactions the platform handles.

What are other people doing in the space and why?

Recently, The Economist has changed its social media strategy to focus more on driving people to its website where people can register and ultimately subscribe. The new strategy is working. In the last six months, the publisher has increased monthly referral traffic from social media platforms by 180%

Currently, the majority of publisher subscription efforts are concentrated on their own websites where they have insight into what a person is reading, how often they visit and what they have read in the past.

How do you view the future?

GDPR and other European regulations such as ePrivacy are expected to negatively impact advertising revenue in the coming months and years. With that in mind, publishers should be looking at different ways of securing revenue and increasing customer loyalty, for example via subscription business models.

Those that innovate and evolve their offerings will see the fruit of their labours as readers’ reward publishers with loyalty and a predictable stream of subscription revenue.

Successful publishers will be the ones that understand the needs of their readers as well as the evolving nature of the industry. Delivering a personalized, seamless and flexible content experience is the only option in this new era of publishing. Those that realize this and offer innovative solutions will win out.

Thank you.

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