In the past 5 years we've seen an unprecedented transition, especially in the software space, toward subscription based pricing models.  The days of companies investing heavily upfront on their technology needs are quickly coming to an end. Instead, technology buyers want to pay as they use and derive the benefits of technology.  In this model, if benefits are not being received it is easy to cancel the service and move to a better solution. The pressure is on the seller to ensure customer success and deliver value every step of the way.  The subscription economy is here and a number of companies are using this new model to gain share and succeed at the expense of slower moving competitors.  

Objectives

Outcomes

ROI

Watch Outs
  • Monetize the value you deliver through price
  • Ensure value and price are in full alignment in order to drive retention and growth
  • Establish a price metric that optimizes the ability to capture value
  • Develop offerings and incentive that support objectives during customer acquisition and retention phases
  • Improve profitability 
  • Achieve greater alignment between price and value delivery
  • Monitor and manage key customer acquisition, monetization and retention metrics 
  • Many organizations that have been able to embrace the subscription economy have experienced tremendous growth and solidified their competitiveness in the market.  For many organizations investing in monetization has a 30% higher return on investment than investments on customer acquisition and retention 
  • Making the transition to subscription based pricing in many cases requires significant changes in your sales organization.  There is a different mindset that salespeople need to adopt to when selling subscriptions.  
  • Monetizing your value is critical.  It is important to proactively manage pricing  and not turn 100% of your attention to customer acquisition and retention 

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