Customer Experience and a New Model for Subscription Maturity

By Joe Andrews June 23, 2015

How do you design great customer experiences? There’s no silver bullet but it’s an important topic for subscription businesses to think about.

Zuora hosted a webinar last week with IDC on the 5 phases to deliver the right customer experience – see it on-demand here. Joining me were Amy Konary, IDC Research Vice President, and Tom Krackeler, Zuora Vice President and GM of Z-Insights.

In the webinar we shared content based on IDC research around the stages of maturity among subscription businesses. Amy shared insights on how subscription businesses can more quickly evolve their business model and improve their customer experiences. Tom shared his perspective on the importance of subscription analytics in designing the customer experience and talked a bit about the announcement of Zuora’s new product line, Z-Insights. Here are some of the highlights:

What do customers love most about a great subscription experience?

There are many elements that make up a great experience, from receiving ongoing value, immediate fulfillment, access to memorable experiences, to access anywhere and in real-time across any device. IDC’s research shows these are the most important ones: 1. The ability to get a consistent experience across channels, 2. interacting with capable, motivated personnel who can deliver what’s needed and solve problems, 3. excellent self-service capabilities on web and mobile apps.

There are two subscription journeys that vendors need to address

We discussed the notion that there, are in fact, two parallel journeys that most companies face in optimizing their subscription business: first is an “operational” journey that enables a business to deliver the core capabilities required to run the business – e.g. pricing their offering, signing up customers, recurring billing and payments, etc. This journey is foundational as you can’t run your subscription business without these things. This is why Zuora built Z-Business to help subscription businesses run successfully.

But a second, equally important journey has emerged that’s focused on designing and delivering the customer experience. This journey involves personalizing the experience around how new subscribers sign up, access and use your service, how you tailor the product and promotional offers based on what customers really need, and how you communicate with them over time based on their behavior, interests and needs.

Subscription journey model

Zuora’s own customers tell us this journey often gets addressed after the core operational one. This is because it’s hard for vendors. We polled the webinar audience (n = 75) and they revealed the top challenges are 1. getting access to customer data to act on, 2. missing the right systems or technologies (the top two were tied) and 3. overcoming internal organizational barriers.

Challenges for improving the subscription experience

Further, businesses aren’t able to make decisions that could help improve their customers’ experiences based on their usage data. Only 4% are able to reliably do so.

Making business decisions based on insights

So what can companies do today to move forward on this journey?

IDC’s maturity model shows 5 stages, from Ad-hoc or ‘Wild West’ to Optimized. Amy estimates that most businesses are somewhere between stages 2 and 3, which means there’s a lot of room for improvements. Some of the advice to move you along the journey faster:

  • Monitor customer engagement with your product/service and start to understand usage patterns and behavior.
  • Develop strategies to make customers more engaged with your service.
  • Integrate pricing and packaging with customer experience to more effectively design offerings that enable customers to quickly see realized value.
  • Structure technology and processes around governance and automation.

Want to learn more? Watch the webinar on-demand here. We’ll also send you a report with the research referenced here, called IDC MaturityScape: Subscription Business Model Management.