Nevertheless, you need to explain such a change properly to top management and shareholders in order to set the right expectations, according to an article on the cfo.com website.
- The company must be customer-centric, not product-centric. Customer needs will be the foremost guide for building products.
- In terms of marketing, more time for communication with existing customers will be needed to spur greater engagement. The moment of transaction is just the starting line.
- Customer support must start proactively reaching out to customers to make them engaged and happy. It is not enough merely to sit and wait for complaints.
- A key element is to optimise customer lifetime value; therefore, financial people need to be at the heart of the customer-centric team.
That being said, introducing subscription is only a pricing decision, not a strategy in itself. One way or another, you still need a solid strategy.
Moving to subscription
If you want to transform to a long-term subscription revenue model, you need to have a very clear vision of how you will continuously innovate and evolve in order to handle customers’ problems. Ask yourself the following questions:
- What is your membership vision?
- What is the forever promise that you can offer?
- What is your first offering?
- What are the risks and how you can mitigate them?
Conduct small tests at the beginning and then scale subscription across the organisation. Be sure you know what it means for your cash flow, expenses, and the valuation of your company.
-jk-