Subscription Monetization Trends for 2019 and a Lot More
Subscription Monetization is growing rapidly, and there isn’t an industry left untouched by this phenomenon; retail, manufacturing, hospitality, and even consumer goods are affected. The year of 2018 has been the true transformation year for the subscription/digital economy.
Let’s take a look at what’s in stock for 2019. While we’ll leave the number crunching to the big research companies, let me provide you with some qualitative, yet important, trends driving business success in 2019.
Customer Experience is on Boardroom Agenda
Finally, companies are fast realizing that the Customer Experience (CX) is not another buzzword, but something that has the capacity to change the organization. CX is a key aspect to be successful in the digital economy and companies have started to articulate and implement their own CX strategies.
I do expect to see that every boardroom conversation starting with analyzing CX and then the rest of the organizational pieces that are working towards improving it.
If you haven’t yet started it, think hard.
Services Transformation – Look out for some ‘out of the box’ offerings
Ever heard about a detergent being sold on a subscription basis? What about subscriptions for receiving personalized outfits created for you by an online stylist or enjoying a weekly box of delicious fruits and vegetables with minor aesthetic imperfections? That’s exactly what is offered by MyGreenFills, Stitch Fix, and Imperfect Produce! As CX continues to become more and more prominent in the boardroom, we are going to see some pioneering companies, such as those listed above, who will fundamentally change the way we consume products; there will be a constant question in the minds of CXOs –
“How can I transform my product offering to one with a service-based delivery?”
Companies will Struggle to Differentiate and the Fight for Customer Loyalty
Truth be told, I have Netflix, Amazon Prime, Hulu, and a bunch of other subscriptions that I watch when I’m not interacting with clients or relaxing with family. However, it’s hard for me to tell you which of these subscriptions I enjoy the most; I just switch to the one which has my favorite web series or a new movie. Now, we will see similar experiences with most of the products that we use—especially for the low-value ones. As such, companies will focus on customer loyalty in 2019, as customer loyalty is a matter of convenience, preference of experience, and relationship with the company. Hence, if companies want predictable and recurring revenues, they’ve got to change their game. This next year will demand new strategies, offers, competitive-pricing and many other tactics if companies want to earn devoted, loyal customers.
CERM Gaining Prominence
Now, we’ve heard about CRM (Customer Relationship Management), we’re also hearing about CXM (Customer Experience Management). We will start hearing a lot more about CERM – Customer Experience Relationship Management. According to Gartner, this is the largest software market tracked to a growth of $42.1 Billion. “Experience” and “Relationship” are the two key factors that are going to drive the recurring revenues in the subscription economy.
CERM will be a key addition for companies to successfully drive their marketing and sales teams to win the game of recurring revenues.
IoT, SaaS and S-Commerce Leading the Subscription Journey
IoT and SaaS are at the forefront at the subscription journey. With billions of devices becoming connected, IoT monetization will be enormous. You can expect to use an app for each device that you buy—everything from a lightbulb to a vehicle. We will also see proliferation of IoT platforms that will specialize in IoT-enabling traditional businesses to make them subscription-ready. Similarly, most of the SaaS-based companies will be driving their strategies to build recurring revenues through subscriptions, while withdrawing from one-time buys. The transformation of e-commerce to the subscription commerce is going to be the key for customers to transact and engage.
Revenue Assurance and Leakage Protection Strategies will take Center Stage
Since switching over to subscriptions will become such a crucial element for companies’ success, a key focus for 2019 will be protecting those subscriptions and ensuring that the revenues are accounted for with minimal-to-no leakage. A research report from IDC.com (2018) states that the public cloud services market grew by 28.6%, with revenues from subscription-based service totaling $63.2 billion. Hence, it is essential that revenue is accounted for is equivalent across the service provided, the amount billed, and ultimately the payment collected. The rating and billing systems, in tandem with the marketing automation tools, are going to be crucial to ensure that revenue leakages are kept to a minimum.
Subscription Monetization will not be just another fad; I do not see this as the case.
Overall, 2019 is going to be the year where many companies will try their hand in the subscription monetization space. My recommendation? Go to an expert consultant who can help you throughout the whole process—from readiness assessment to complete implementation. Subscription Monetization offers a lot of benefits only when the entire transformational journey is planned and executed in a thorough manner. Subscription Monetization is not a one-time process, so embark on this journey with the expert to ultimately provide your customers with an unforgettable, unsurpassed customer experience.
So, what do you think will be different in 2019? Do leave your thoughts and comments.