{"id":36445,"date":"2019-10-10T12:32:09","date_gmt":"2019-10-10T19:32:09","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=36445"},"modified":"2019-10-10T14:44:47","modified_gmt":"2019-10-10T21:44:47","slug":"why-b2b-is-buying-into-the-consumer-dominated-subscription-services-business","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2019\/10\/why-b2b-is-buying-into-the-consumer-dominated-subscription-services-business\/","title":{"rendered":"Why B2B is Buying into the Consumer-Dominated Subscription Services Business"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

Subscription services are no longer solely the purview of consumers.\nTrends in office space, finance, technology, sustainability and more are all pushing\nconsumption-based services deeper into the B2B landscape. In fact, Stanford Business<\/a> went so far as to predict that\nall business, B2C and<\/em> B2B, will become subscription businesses in the\nfuture.<\/p>\n\n\n\n

According to research from Zuora, the subscription economy has grown more than 300 percent<\/a> in the past seven years and shows no signs of slowing. The promise of simplified IT, optimized resources, mitigated risk and<\/g> consistent security is simply too compelling to ignore or put off. What\u2019s more, these types of emerging Everything-as-a-Service (XaaS) models aren\u2019t just about meeting customer needs,<\/g> but also helping organization<\/g> to drive true business outcomes. <\/p>\n\n\n\n

But, while the move to subscription-based models might be\ninevitable, it\u2019s not a straight or simple path. Here are three tips to get it\nright.<\/p>\n\n\n\n

Understand that c<\/strong>ustomers are focused on outcomes<\/strong><\/p>\n\n\n\n

B2B customers aren\u2019t streaming movies,\nordering vitamins or even signing up for monthly STEM games for kids. Instead,\nthey want to invest in driving business outcomes\u2014from\nbuilding a stronger customer focus to optimizing for efficiency and driving\nrevenue.<\/p>\n\n\n\n

As an example, a consulting firm was losing proposals due to long discovery time. Working with SaaS startup 9lenses<\/a>, <\/strong>they used the cloud assessment platform to reduce the time needed to learn the client\u2019s business from eight to three weeks. As a result, the firm was able to be more profitable, doing more work with fewer resources and raising its margins by 10 percent. Another example is CompStak<\/a>, a crowdsourced commercial real estate data platform that gathers and quality checks real estate information so agents can focus on meaningful networking, accurate analyses, and closing business.<\/p>\n\n\n\n

Recognize analytics are the golden goose<\/strong><\/p>\n\n\n\n

The brass ring of the as-a-service model is\ndata. Collecting customer information and distilling insights enables\nbusinesses to add tangible value and, as a result, become incredibly sticky. Case in point:<\/p>\n\n\n\n

Kareo, a cloud-based medical technology platform, utilized Gong\u2019s sales conversation intelligence platform<\/a> to increase close rates by 30 percent, accelerate onboarding time by 20 percent and cut the sales cycle in half.<\/p>\n\n\n\n

Usage data also feeds the R&D process; services transform information that\nused to come from customer surveys and focus groups into a steady, real-time data\nstream on how, when and why customers use your product. HP\u2019s\nDevice-as-a-Service (DaaS) does just that. It helps customers get a live look\nat how their devices are functioning, and even more importantly, actually use<\/em>\ndata, not just collect it. For example, HP\u2019s TechPulse applies analytics and\nmachine learning along with contextualized data to help users put action behind\ntheir insights and cut down on spending and resources.<\/p>\n\n\n\n

Analytics can even help companies create new\nmarkets. Take the Nest Learning Thermostat<\/a> for example. It\u2019s a B2C product that\nuses sensors to program itself based on an individual\u2019s daily activities. And Nest\nused its thermostat data to set up a subscription service for utility\ncompanies, who pay for energy management insights and services. <\/p>\n\n\n\n

Plan for organizational and financial implications<\/strong><\/p>\n\n\n\n

The\npeople, processes, technology, security and systems required to deliver a\nsubscription are very different than those required in simply fulfilling an\norder. No longer is a sale a one-time \u201cwon and done\u201d deal. As-a-service sales generally\ntake place in the C-suite, so moving\nto a subscription model demands customer\nrelationship managers who can facilitate higher-level\nconversations and engagement across business groups. <\/p>\n\n\n\n

These\nmodels also demand a\ndifferent financial structure, moving from CapEx to OpEx. This means that\ncompanies who are pursuing a shift to a services model need to be willing to\nabsorb a short-term revenue hit against a future investment. Cisco<\/a> transformed\nfrom hardware to a subscription software-licensing model, necessitating a significant\nengineering effort and a new business unit as well as a sales and marketing makeover.\nWhile the company saw revenues through the software business earlier than\nexpected, it also saw a drop in overall revenues as the company went through\nthe transition. Adobe<\/a> also successfully did\nit with the launch of the Creative Cloud monthly subscription, adding a substantial bulk of net-new\nsubscribers along the way.<\/p>\n\n\n\n

All the benefits of subscription services that we have come to crave\nas consumers are appealing to businesses, too. Companies who are ready to make\nthe move to the as-a-service model certainly have challenges ahead\u2014but the\nrewards are well worth it. <\/p>\n","protected":false},"excerpt":{"rendered":"

Subscription services are no longer solely the purview of consumers. Trends in office space, finance, technology, sustainability and more are all pushing consumption-based services deeper into the B2B landscape. In fact, Stanford Business went so far as to predict that all business, B2C and B2B, will become subscription businesses in the future. According to research from Zuora, the subscription economy has grown more than 300 percent in the past seven years and shows no signs of slowing. The promise of simplified IT, optimized resources, mitigated risk and consistent security is simply too compelling to ignore or put off. What\u2019s more, these types of emerging Everything-as-a-Service (XaaS) models aren\u2019t just about meeting customer needs, but also helping organization to drive true business outcomes. But, while the move to subscription-based models might be inevitable, it\u2019s not a straight or simple path. Here are three tips to get it right. Understand that customers are focused on outcomes B2B customers aren\u2019t streaming movies, ordering vitamins or even signing up for monthly STEM games for kids. Instead, they want to invest in driving business outcomes\u2014from building a stronger customer focus to optimizing for efficiency and driving revenue. As an example, a consulting firm was losing proposals due to long discovery time. Working with SaaS startup 9lenses, they used the cloud assessment platform to reduce the time needed to learn the client\u2019s business from eight to three weeks. As a result, the firm was able to be more profitable, doing more work with fewer resources and raising its margins by 10 percent. Another example is CompStak, a crowdsourced commercial real estate data platform that gathers and quality checks real estate information so agents can focus on meaningful networking, accurate analyses, and closing business. Recognize analytics are the golden goose The brass ring of the as-a-service model is data. Collecting customer information and distilling insights enables businesses to add tangible value and, as a result, become incredibly sticky. Case in point: Kareo, a cloud-based medical technology platform, utilized Gong\u2019s sales conversation intelligence platform to increase close rates by 30 percent, accelerate onboarding time by 20 percent and cut the sales cycle in half. Usage data also feeds the R&D process; services transform information that used to come from customer surveys and focus groups into a steady, real-time data stream on how, when and why customers use your product. HP\u2019s Device-as-a-Service (DaaS) does just that. It helps customers get a live look at how their devices are functioning, and even more importantly, actually use data, not just collect it. For example, HP\u2019s TechPulse applies analytics and machine learning along with contextualized data to help users put action behind their insights and cut down on spending and resources. Analytics can even help companies create new markets. Take the Nest Learning Thermostat for example. It\u2019s a B2C product that uses sensors to program itself based on an individual\u2019s daily activities. And Nest used its thermostat data to set up a subscription service for utility companies, who pay for energy management insights and services. Plan for organizational and financial implications The people, processes, technology, security and systems required to deliver a subscription are very different than those required in simply fulfilling an order. No longer is a sale a one-time \u201cwon and done\u201d deal. As-a-service sales generally take place in the C-suite, so moving to a subscription model demands customer relationship managers who can facilitate higher-level conversations and engagement across business groups. These models also demand a different financial structure, moving from CapEx to OpEx. This means that companies who are pursuing a shift to a services model need to be willing to absorb a short-term revenue hit against a future investment. Cisco transformed from hardware to a subscription software-licensing model, necessitating a significant engineering effort and a new business unit as well as a sales and marketing makeover. While the company saw revenues through the software business earlier than expected, it also saw a drop in overall revenues as the company went through the transition. Adobe also successfully did it with the launch of the Creative Cloud monthly subscription, adding a substantial bulk of net-new subscribers along the way. All the benefits of subscription services that we have come to crave as consumers are appealing to businesses, too. Companies who are ready to make the move to the as-a-service model certainly have challenges ahead\u2014but the rewards are well worth it.<\/p>\n","protected":false},"author":217,"featured_media":36446,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1650,82,87,1638],"tags":[3719,2941],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36445"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/217"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=36445"}],"version-history":[{"count":2,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36445\/revisions"}],"predecessor-version":[{"id":36468,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36445\/revisions\/36468"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/36446"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=36445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=36445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=36445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}