Subscriptions, once the bastion of newspapers and magazines, are becoming a revenue model for thousands of small to-medium businesses (SMBs) selling everything from cars and jet engines to clothing, entertainment and education services.
“We’ve entered the era of ‘Subscription 2.0,’” observes Des Cahill, an Oracle vice president of product development, an era in which B2B and B2C customers prefer subscription services for even complex physical goods. “The business opportunity to build recurring customer relationships and predictable revenue streams is tremendous, yet the changes companies need to make can be daunting,” Cahill says.
That’s because shifting from selling one-off products to selling products as subscriptions is challenging, as most SMBs don’t have the pricing, billing, monitoring, revenue management and other “monetization” systems to support these complex selling models. The good news is that new software makes it possible to convert even the most rigid sales and financial systems into ones that flex to the changing needs of subscription providers.