MattDarrowisavicepresidentandgeneralmanagerofproductat

Zuora。

Inthisexclusiveinterview,Darrowshareshisthoughtsonboostingcustomerengagementinthenewsubscriptioneconomy。

ZuoraVPMattDarrow

CRMBuyer:Howdoesthesubscriptionmodelimprovecustomerengagement?

MattDarrow:Wevebeentalkingaboutthisintheindustryforawhilenowhowweremovingtowardasubscriptioneconomy。

Thewaythatwedefinethewordsubscription,however,maybeisntquitewhatyoudexpect。

Wethinkofsubscriptionbroadly。

Itswhencompaniesdobusinesswithcustomerswithwhomtheyhaveaknownrelationship,andthoserelationshipsaresticky。

Thesubscriptionmodelisgreatforengagementbecausecompaniesknowthatinordertobesuccessfultheyneedtodeliverongoingservicesthatkeepprovidingvalueoverandoveragain,becausenaturallyclientscanturnofftheirserviceandgosomewhereelseiftheyrenotgettingtheoutcomethattheyexpect。

Thebenefitforthebusinessistheygetthislong-termpredictablerevenue,bybuildingarelationshiptheyknowandcancultivateovertime,butinordertokeepthosecustomersandkeepthemengaged,businesseshavetokeepprovidingvaluableservices。

Theyneedtokeepdeliveringnewinnovation,newservices。

Wevecometoexpectthatinbothourpersonallivesandourbusinessliveswhenweinteractwithservices。

Customersbenefitfromthesubscriptionmodelbecausetheyregettingaccesstoongoinginnovation,anditswonderfulfromthecustomerengagementside,becausecompaniesaregivingcustomersmorethanjustaproduct。

CRMBuyer:Howdoesitprovideacustomerrelationship?

Darrow:Oneofthekeymetricsismanagingagainstclientchurn。

Youllnevergrowifyourelosingcustomers。

Subscriptionsthemselvesdontpreventchurn,butifyourunasubscriptionmodel,youneedtobecaringaboutcustomerchurn。

Ifyouhavethisrelationshipwithaclientthatyouknowovertime,youcantailoryouroutreach,andyourealsobuildingupintelligencethrougheverythingyoureproviding。

Yougetintoaworldofhyper-personalization。

Inatraditionalproductworld,thebusinessprocessesarenormallyprettysiloed。

Withasubscriptionmodel,however,yourebuildingaproductandpushingitthroughdifferentchannels,andyourebuildingacustomerrelationshipthatyouregoingmonetize,andthatsgoingtochangeovertime。

Howcustomersinteractwithaservicewillbedifferentovertime。

Whilekeepingtrackofcustomersoveralifecycle,businessescandointerestingthings。

Byunderstandingfinancialsintermsofrecurringrevenueandhowcustomersuseaproduct,businessescantailorsalesandmarketingeffortstowardsparticularcustomers。

Youdonttreateverycustomerthesameway。

Youuseallofthemetricsthatsubscriptioncompaniescareabout。

CRMBuyer:Whataretheuniquemetricsasubscriptionbusinessneedstoconsidertosuccessfullyrunabusiness?

Darrow:Wetalkalotabouthowthemetricsarefundamentallydifferentforsubscriptionbusinessesthantraditionalproduct-basedbusinesses。

ForasubscriptioncompanyandthisisthesameforastartupasitisforalargeFortune500companyallthemetricsrevolvearoundsubscribersandtheirlifecycle。

Youstarttocareaboutchurnrate,andyoustarttocareaboutnetdollarretention,whichisameasureofareyouexpandingorcontractingwithmeasasubscriber?

CRMBuyer:Howisthemarketingdepartmentimpactedbytheshifttoasubscriptionmodel?

Darrow:Itactuallydovetailsnicelywithalotofthingsmarketersaretalkingaboutnow,likeone-to-onecampaignsandpersonalizedmarketing。

Treatingeverycustomerthesamedoesntwork。

Whenyourunasubscription-basedbusinessmodel,youinherentlyknowmoreaboutyourcustomersthanwithanyotherbusinessmodel。

Onceyouknowthatnowthemarketershaveamuchbetterwaytounderstandtheircustomerbase。

Theytakethatunderstanding,andtheycandrivepromotions,re-engagementcampaigns,andtargetedadoptioncampaignsbasedonthisknowledge。

Thewholefinancialsystemrevolvesaroundthat,andnowmarketingcanstarttobenefitbydoingthesetailoredcampaignsandoutreach。

CRMBuyer:Whatsinthefutureforsubscriptionmanagement?

Howisitevolvingandchanging?

Darrow:Alotofithasbeenmaturinginthemarketplace。

Evensixorsevenyearsago,mediacompanieswereverysubscription-focused。

Thefirstbigchangeisthatnow,thesubscriptioneconomyisbecomingmainstream。

Subscriptionsareforallcompanies,ofallsizes。

Subscriptionsaregrowing,andthatsbecausemanydifferenttypesofcompaniesarestartingtoadoptthismodel。

Thesecondthingthatspartoftheevolutionisthatasthesubscriptionmarketmatures,businesseswillbeabletomakebetterdecisionsbasedonsubscriberdata。

Youneedadifferentproductcatalogandadifferentsetofmetrics。

Nowthatcompaniesareofferingsubscriptions,theyrestartingtoask,howdoIgetreallysmartaboutwhothesesubscribersare?

Unlockingsubscriberdataisthenextbigthing。

VivianWagnerhasbeenanECTNewsNetworkreportersince2008。

Hermainareasoffocusaretechnology,business,CRM,e-commerce,privacy,security,arts,cultureanddiversity。

Shehasextensiveexperiencereportingonbusinessandtechnologyforavariety

ofoutlets,includingTheAtlantic,TheEstablishmentandO,TheOprahMagazine。

SheholdsaPhDinEnglishwithaspecialtyinmodernAmericanliteratureandculture。

Shereceivedafirst-placefeaturereportingawardfromtheOhioSocietyofProfessionalJournalists。

EmailVivian。

Letsblockads!

(Why?

)

CRMBuyer