As the world shifts from product-centric business models to more customer-centric models focused on relationships, it is changing every part of a business. Subscription product launches are not easy but is arguably the most critical stage in a company’s evolution. If done right, product launches can lead to a growth trifecta of attracting new subscribers, increasing the value of your existing customers, and preventing customer churn.
Here are some key considerations for successful subscription product launches:
Business works a little differently in the Subscription Economy – you have to put that subscriber at the center of your entire ecosystem. From your product to your sales channels to billing and collecting payments to customer success – it’s all about your subscribers. Is your business ready for this? Do you have the required data on your customers, their preferences and usage patterns? Do you have insights into what more they want?
A subscriber-business relationship is very dynamic. Unlike in the traditional product economy, the relationship between the two doesn’t end with the sale. On the contrary, it’s an ongoing relationship and you will need to revisit your customer data often to ensure that your customers are happy with your service.
You have to treat your customers as individuals (and rightfully so!) and be prepared to invest in the relationship to understand their specific requirements from your product or service, from your billing and payment options to your customer service and communications. By doing this, you can improve your product to make it ‘sticky’ and retain customers, and gain competitive insight to offer them upsells and renewals.
A successful launch today is no longer only about your product team delivering a phenomenal product. It’s also about your operations, IT, sales and finance teams buying into the launch too. Your entire company must be invested in getting it right. Rather than traditional indicators such as units sold and new sales, you need to now focus on ARR growth, renewals, upgrades, downgrades and churn rates.
The new business model and success metrics need to be operationalized across the board – every department must focus on the subscriber, not just the customer-facing teams. Departments cannot operate in silos as there is always an upstream or downstream impact of their actions i.e. they have a direct relationship with the work and success of other departments. Getting everybody on board to focus on the customer is a great way to ensure the company functions as a single unit towards a common goal.
For a subscription business, making the right offers to customers in the right context is a must. You must have enough relevant data to understand the kind of pricing and packaging options and experiences that your customers want. And have the flexibility to offer them quickly. A failure to do so will result in customers looking elsewhere.
In 2008, when Box wanted to launch an enterprise business application, they wisely realized that they couldn’t do it without flexible pricing and packaging capabilities. An enterprise subscription business had to be able to change their pricing quickly to react to new consumer demands and market changes. Not to mention manage upsells, add-ons, and change orders for their millions of users. Once they had an automated system in place, they were ready for the Enterprise market.
It’s also important to figure out what pricing gets customers to latch onto your subscription product or service. You want to be able to test out different pricing and packaging strategies – it’s important to iterate and see what’s going to be the easiest, least confusing, attract the most customers and bring in the most revenue for the company.
And it’s important that your product launch pricing and packaging strategy accounts for future growth as well. While a low price point might initially help you grab new customers, it probably won’t work as you grow. Once your subscribers are hooked to your product or service, they will be willing to pay more for value-added services. The trick is to identify the “just right” pricing for customers at different stages of the subscription journey.
Customer acquisition is undoubtedly the main goal for a subscription product launch. Again, unlike the traditional product-based business models that had a direct to consumer or reseller channels, it’s all about being omni-channel in the Subscription Economy. The reality is that potential customers may be looking for your product or service from anywhere. And when they find you, they should be able to immediately sign up – online, mobile, via an assisted sale, resellers or distributors. A seamless and easy sign-up will ensure that they complete the process.
However, subscription packages can often be complex since they are so varied and often offer customization. Don’t let this slow down your acquisition and growth. Make sure your systems are ready to transact with potential customers on all channels (or at least the most relevant ones). It’s best to have simple, quick and automated customer acquisition processes.
It’s important that while you are setting up for launch, you are already thinking of being able to scale for growth. It’s fairly simple – today’s processes and IT stack may become obsolete or become a bottleneck tomorrow. And you want to avoid that at all cost.
Go-to-market with a solid ecosystem upfront, which will help you scale as well so when your subscribers and offerings increase, you can continue to run an agile and efficient business. Choose the right vendors – avoid narrow, non-scalable options and instead choose services that fit into your ecosystem and are aligned with your broader business vision. In other words, choose partners, not mere vendors.
A company that did so is Thync which went to market in about a year. “We decided right out of the gate to implement a scalable solution and to automate as much as we could rather than hire people to do manual things. We wanted to avoid spreadsheets and moving data around.”- Jason Egnal, VP of Digital Marketing and Commercial Operations at Thync.