Substribe Summit: the future of B2B subscriptions took place recently, bringing together subscription leaders in data, media, information, and SaaS to share approaches to growing recurring revenues. The Summit explored 3 critical levers for growth, these being: product innovation, pricing optimization, and customer success.
The potential of subscriptions was explored in depth during the Summit starting off with a sentiment index taken from a Substribe survey. Those with subscriptions are more confident in this part of their business, and, there is an intention to shift the ratio of recurring revenues versus non-recurring revenues by an average of 34% (from 47% to 63%). This is bold and aspirational, and requires a transformation across the business to monetize and retain customers at this level.
The 5 success hacks are:
- Hack #1. Use design thinking approaches to launch new products: Anthony Rose, founder at disruptive SaaS business SeedLegals, urged the audience not to go off and build a product without interaction with customers. Instead, he shared the benefits of using mockups to prototype your concept with end-users, use results from customer testing to test your hypotheses about what you should be building, and then focusing on your core user group to build and iterate. A proven approach to use is the design sprint, where a prototype is built and tested with real customers within days, leading to minimum viable products that have value for end-users from the get-go.
- Hack #2. Invest in customer research to get closer to the customer: Subscription organizations should be looking to uncover real, ongoing value in order to benefit from customer lifetime value. To do this, you need to look for a problem worth solving, and get into the minutiae of your customers’ daily work flow. For instance, it’s not enough to provide content, you need to understand how it is going to be used once your end users find it, where it goes next, and where it ultimately ends up. To illustrate, the Utility Week case study evidenced a powerful transformation, brought about after researching their audience and uncovering what they needed to deliver to create enterprise value for their B2B customers. The results are high contract values, excellent renewal rates, and a differentiated brand.
- Hack #3. Meet B2B customers’ demand for intimacy, relevance and flexibility: The topic of micro-communities came up several times during the Summit (this being seen as a way to create powerful experiences within niche areas, at pace). Also, leading organizations are creating customized experiences for their subscribers, personalizing and contextualizing their service, to embed value throughout the year. Successful approaches include the high growth Business of Fashion, where workshops led by content creators are able to highlight key components of their information to help their customers understand opportunities in their market. In the past, B2B subscription organizations kept their customers at arm’s length, high performing organizations have flipped this approach to obsess about their customers.
- Hack #4. Avoid leaving money on the table by asking customers about pricing: The most hotly debated topic at the Summit was about pricing transparency for customers. There appears to be a movement towards involving customers to reveal value-based pricing, fairness and transparency with some exceptions (messy legacy pricing, early-stage, or a customized service), according to experts Notion Capital, Profitwell and Simon Kucher & Partners. To truly land pricing that supports customer lifetime value, the discipline of pricing should be a cross-functional and collaborative process across the organization – including sales and data-driven finance views.
- Hack #5. Think more like SaaS: There is a shift from a once a year focus on renewing contracts, to credible and ongoing delivery of value. Ashley Friedlein, Founder at SaaS start-up Guild, talked about focusing on delivering value each month of the year, speeding up time to value, and understanding that monetizing and retaining existing customers is more valuable than customer acquisition. These are important disciplines to borrow from the world of SaaS.
Substribe helps B2B organisations grow recurring revenues and unlock the secret of customer lifetime value. Our proven agile techniques empower teams who want to truly understand their customers to deliver success. We mix strategy and tactical guidance to quickly develop your capabilities, make changes and impact recurring revenue performance.