Many businesses are now looking to Cloud Billing applications as a means to provide the agility needed to succeed in the rapidly evolving subscriptions market. Taken from the executive summary our new white paper, Cloud Billing – Enabling Business Innovation and Revenue Growth, Dominic Smith provides an introduction to why flexible billing is crucial and how billing-as-a-service can help drive your business forward.
The subscription business model is going from strength to strength as companies evolve from selling products to becoming ‘as-as-service’ providers. It is a process that has the potential to transform your entire organisation - whether you are an established company looking to rapidly launch new services or solutions, or a new start-up, eager to develop an agile and flexible customer engagement strategy.
It is an ongoing trend highlighted in an online survey Cerillion ran gauging the views of 200 senior IT professionals. Across a broad range of industry verticals polled, the results
revealed that the number of businesses operating with one-off product pricing models is set to fall by 39% in the near future. In contrast, new relationship-based services built around subscriptions are on the rise, including freemium and pay-per-use pricing models.
Rather than selling products individually, a subscription provides periodic use or access to a product or service, benefiting suppliers by securing a steady stream of recurring revenue and providing a regular contact point to strengthen the customer relationship, reducing churn and making it easier to cross-sell and up-sell new services. It is an approach with the potential to transform both established organisations looking to rapidly launch new services or solutions, and new businesses eager to quickly develop an agile and flexible customer engagement strategy.
Technology giants, whose brands have become synonymous with innovation, like Spotify, Netflix and Amazon, understand the value of the subscription business model and are making active use of it to launch new service offerings. For example, Amazon recently launched a new ebook rental service called Kindle Unlimited
, which offers subscribers unlimited access to more than 600,000 titles on any device for less than ten dollars a month. In the software market, the price per month approach has likewise become the norm as industry heavyweights from Salesforce to Adobe and from Microsoft to Google are now selling their applications on a per user per month basis.
In tandem, we are seeing a new breed of niche e-commerce start-ups come to the fore by introducing the subscription billing model for traditional repeat purchases, including everything from razor blades to coffee beans and quality wine, and services such as food delivery, dentistry and car hire, reaping the rewards by tapping into a rich source of recurring and predictable revenues.
But moving to a subscriptions-based model can also bring challenges. As the move to subscriptions gathers momentum, markets inevitably become more competitive. Whether you are already offering subscription services or looking to change your business model and start rolling them out, you’ll need to find a way of differentiating yourself by quickly and easily adding more strings to your bow without breaking the bank in delivering them.
That’s where no matter how creative and innovative your business is, you can find yourself held back by a seemingly straightforward back office process - your billing. Traditional on-premise billing systems are typically too expensive or not agile enough to handle the demands of a dynamic subscription business, or, even more seriously perhaps, they are ‘untouchable’ for fear of affecting existing revenue streams. On top of this, they can be slow to implement, configure and integrate with other applications.
So how do you address this challenge? How can you turn your billing system from a barrier to innovation into an enabler of a successful subscription-based model?
For any business looking to move to subscriptions, cloud billing, which can dramatically cut the time taken and costs incurred in setting up new services, can be the ideal solution. Indeed with an approach based on cloud billing software, sometimes also referred to as billing-as-a-service, there’s no need to invest in expensive new hardware or maintenance, and payment is based on what is used rather than on upfront software licensing or prohibitive implementation fees.
In our new white paper Cloud Billing – Enabling Business Innovation and Revenue Growth
, we show you how you can turn billing from a barrier to an enabler of innovation and provide practical tips and advice on how you can use cloud billing to help you to either build a new subscription business or better manage your existing one.
Request your copy of our new white paper now.