Today, Zuora's Amy Konary creates a world in which subscribers are at the core, because she knows success is no longer measured simply by products sold. Plus, Recurly raises dough, Medium talks product marketing, and Beyond Pricing helps the common folk make a buck.
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Recurly raises $19.5M
Recurly—provider of enterprise-class subscription billing management for thousands of businesses worldwide—raises $19.5 million to boost subscription revenue with machine learning.
We know subscription is the business model of the future (or more accurately, the now), and VentureBeat reports McKinsey & Company estimating 15% of online shoppers signing up for one or more product subscriptions within the past several years—pegging the growth rate of the recurring revenue market from 2013 to 2018 at over 100% a year.
And Zuora's found the subscription usage ticking up more than 300% between 2012 and 2018.
So it comes at no surprise that Recurly is nailing it in the space.
Rebecca Geraghty at Medium compiles a piece on product marketing playing a critical role as a translation layer. She knows there are fundamental "truths" across product marketing initiatives, but this one's stayed steady throughout her extensive exposure in the realm:
"Product marketing serves as a critical translation layer between the product and just about everyone else."
- Breaking down technical concepts for sales, customers, and partners to better understand
- Framing a new feature in terms of why and how it matters (not just what it does)
- Positioning a message in context of a specific vertical, use case, or customer persona
- Or channeling market insights back to impact product roadmap
She breaks down what it means, why it matters, and some tactics behind it. Here are some key points we took away.
What it means:
- 100% commitment to being understood by the person on the other side
- Recognizing that it isn’t enough to simply say it because if the audience isn’t understanding, then the communication has failed.
Why it matters:
- Everyone in your company has stake in your product.
- It's an ongoing, iterative process.
- Become fluent in the fine details and nuances of your product.
- Create a Powerpoint deck that you would be comfortable presenting from end to end.
- Deliver trainings, briefings, demos, and other presentations on what you just learned to be sure, as a third party, you'd be able to walk away understanding all of it and able to repeat it accurately during your next customer visit.
Check out the full post (a nine minute read) if you want the full scoop.
Face it, you're guessing
Beyond Pricing raises a cool $42 million to tell you what to charge on Airbnb. It’s no secret we’re pricing fanatics, so we’re digging this one. And Josh Constine from TechCrunch can attest: Most people just guess how to price, especially with their vacation rental—based on minimal research, or using something like Airbnb’s suggestions that just want to maximize their own revenue.
Beyond Pricing aligns itself with homeowners, and handles more than 150,000 listings with Airbnb.
Here’s how Beyond Pricing works: You connect your Airbnb and other vacation rental platforms, or your own rental calendar. Beyond Pricing scours all the platforms for what similar homes charge, their vacancy rates, what hotels are charging, historic and current demand fluctuations, airline info, weather, and more. You can view charts of prices in your neighborhood or nearby hotels, and adjust the base and minimum rates. Then Beyond Pricing automatically applies its daily rates to your listing or lets you export them to start earning the most possible, essentially providing people the technology big hotel chains use. It costs just 1% to earn people 10 to 40% more.
Now we understand how Beyond Pricing low-key raised $2 million in 2016, and now announces a crazy $42.5 million Series A. Simply, genius.
"You just don't understand twenty-first century commerce"
Christian Owens, Founder and CEO of Paddle, releases a piece on Forbes regarding Stripe’s recent valuation. At $35 billion, the tech world is undoubtedly buzzing over it. Last week, we touched on Stripe—a company that enables commerce across the internet—and its $250 million round of funding. And apparently, some have considered this an overvaluation. But Christian says no way.
He makes a super solid argument with the data to back it, weaving in competitor numbers and revenue. Stripe has a growing number of additional services–loans, capital, Radar, a fraud product, and card issuing. So, you start to get a picture for how this massive portfolio of customers and diverse offering of products (which can be upsold and cross-sold) make for a healthy business, and why $35 billion seems pretty dang fair. Perhaps enabling commerce in the age of the internet is more important than many think.
Subscribers at the center
The days of going to the store, buying a new product, and then falling off the radar as soon as you pay are long gone. The customer experience has entered a new realm, and it’s reviving retail.
Amy Konary, Zuora Vice President of Customer Business Innovation and chair of the Subscribed Institute, looks at Amazon and Costco for learnings on this retail revival. She said Amazon is not successful because of its ecommerce offerings. Rather, its success stems from a customized and simple shopping experience.
That’s because consumers have moved on from new technology innovations. Amy said the subscription economy, a phrase coined by Zuora, is about "automating relationships and building relationships that get better over time."
It’s proven by data. Amazon Prime has surpassed more than 100 million subscribers in the united states. Amazon collects data every second of the day, customer reviews are constantly coming in, providing two-fold feedback, giving customers information on a product, and Amazon intel on how customers enjoy a product. For Amazon—and many other successful subscription companies—the work isn’t done once the sale is made.
"It’s easy to take a piece of data and spin it any way you want. You can tell any story with data and so I, as someone who’s spent their career in data, has always gone back to people... And that’s where things like behavioral economics and behavioral science can really come into play when you’re making decisions about what the data is showing you."
On the other side of the table, there’s Costco. As Amy points out, it presents a big threat to Amazon because of the loyalty it’s earned through a paid membership model. Costco stands with about 94 million members and holds a 91% membership renewal rate. How? Amy says it’s all thanks to great prices and solid customer service.
It's not necessarily about ecommerce versus traditional retail. Costco is traditional but it’s nailed down a meaningful customer relationship. Now that it’s got the traditional side mastered, it’s moving into the ecommerce space, proving commitment to streamlining the customer experience.
At ProfitWell, we know it well: Recurring revenue is the backbone of a membership-based company. Amy offers some advice on transitioning to the subscription space.
"Moving to a mode where the subscriber is at the center requires a lot of changes within your organization. It requires a lot of changes in your channel. It requires changes in your innovation department, changes in marketing, changes in how you sell, changes in how you represent the value that it is that you provide out to the world."
At ProfitWell we work with more than 8,000 subscription companies, so we understand the consumer is the center of the subscription model, and that oftentimes pricing plays a big role in the customer experience and can make or break recurring revenue.
Overrated/Underrated is a game during which players deem debate-worthy items as they see fit. From freemium and free trials to the cannabis company boom, no topic is off the table. In today's segment, I'm joined by ProfitWell's Andrew Gierer, Ian black, Neel Desai, and Gina Eygenson, to argue the value of customer success teams.
And that’s a wrap for your October 1 subscription news. Recruit your friends into the subscription know by sending them to recurnow.com to sign up for episodes on the daily.