DEMO09 – Zuora Launches Our Next Subscription Management Service in San Diego

by Tricia Reilly

As the kids head back to school and the weather (finally) starts to heat up in San Francisco, the Zuora Marketing team is getting ready for Fall. Most notably DEMO’09, where we’ll be launching our next subscription management service offering.

While we can’t tell you what we’ll be announcing, Chris Shipley alludes to key trends that are emerging from the list of DEMO09 demonstrators. What we can tell you is that we’re incredibly honored to be welcomed back to DEMO09. You’ll remember we launched Z-Commerce for Facebook at DEMO09 back in March. With this upcoming launch, we’re hoping to shake things up and really break new ground in the burgeoning subscription industry. Here’s how you can stay connected with Zuora in the coming weeks, and be the first to scoop the news:

• Follow us on Twitter - @Zuora
• Follow the buzz around the event through the hashtag #DEMO09 – we’ll be tweeting live from the show floor
• Join the Zuora Facebook fan page – 130+ fans and growing
• Subscribe to the Z-Blog to learn about subscription management best practices, industry trends, and more

Reader’s Digest Files for Bankruptcy While Hundreds Join JOL’s Paid Online Content Mission

by Tricia Reilly

Another one bites the dust: last week the publisher of Reader’s Digest, filed for bankruptcy, joining a long list of media outlets battered by the recession and an ineffective ad-supported revenue model. The struggling industry is ripe for a new business model.

On the heels of the Reader’s Digest announcement comes news from Journalism Online LLC, a new venture spearheading journalism’s transition to a paid online model. Publishers representing more than 506 newspapers and magazines will join JOL as affiliates. Their goal? To generate new revenues from readers and distributors for their digital content.

JOL’s co-founder Gordon Crovitz, who for over a decade ran the Wall Street Journal Online, explains:

“Every publisher we have met with is now seeking to generate revenues for online access, which is a huge shift in strategy. The interest shown by our affiliates and many other publishers with whom we are intensely engaged confirms the need for a sophisticated commerce platform to meet the challenges facing the media industry.”

We at Zuora believe that subscriptions might just save the publishing industry. Earlier this year, we blogged about how subscription revenue models are taking center stage, and noted that News Corp Chairman Rupert Murdoch hinted at moving toward paid content. This month, when Murdoch announced plans to roll out paid content on all News Corp websites, we highlighted the power of subscriptions at Zuora customer GigaOM Network, which successfully launched a premium content service for its annual subscribers this year.

Although the publishing industry seems to be coming around to the idea of paid content, the information-must-be-free crowd stands its ground. Nearly 300,000 Facebook users have joined the group to “Keep Facebook Free,” with the threat of signing off the site.

Paid content providers will have to find a way to differentiate themselves in order to justify the premium. In his new book, Free: The Future of Radical Price, Chris Anderson argues that the most effective price is no price at all. He highlights how savvy businesses use “freemium” business models to get subscribers to pay for premium features, like Flickr does with its Flickr Pro account. The Wall Street Journal is a great example of a successful “freemium” business model in journalism. Paying subscribers can read The Wall Street Journal online, with navigation. Non-subscribers have to settle for reading the occasional Wall Street Journal story when they happen to encounter it—indexed in Google, or referenced from another site.

We’re excited to see the publishing industry rally around subscriptions to overcome its challenges. Despite the naysayers, we’re on board with JOL’s subscription model for content, and we’re thrilled to see more supporters join the ranks.

Managing the Customer Experience in a Subscription Economy

by Katrina Wong, Director of Customer Experience

As the world moves to more and more subscription-based businesses – the customer experience becomes ever more important. Why?

In the traditional product-oriented world, selling may be a one-time transaction. How a customer thinks, feels, and interacts with your product is important up-front, but your business might not depend heavily upon repeat business (e.g., a customer buying a car from a dealership may not come back for several years).

However, in the subscription economy, not only is your revenue based upon a recurring model, so is your customer relationship. In a world characterized by subscription businesses, we are constantly reminded of this recurring customer relationship, as customers ask themselves “Do I really need this?” every time they are billed.

Because we want our customers to not only renew - but to pay for what they have committed to when they subscribed – regularly taking the pulse of the customer and building a feedback mechanism to your organization is key.

Below, I’ve outlined three tenets of operating a thriving subscription business with a customer experience focus, which we’ll cover in more detail over the next few weeks:

• Focus on the customer and anchor your business around the customer’s experience
  • Understand the perspective of the customer.
  • Shift from an internal/company focus to a customer-centric one.
• Embrace the voice of the customer
  • The good, the bad, and the in between.
  • Share customer insight across your company on a regular basis.
  • Talk about customer needs and not personal or organizational preferences.
• Build a company culture that internalizes the customer experience and customer feedback
  • Create employee metrics around customer satisfaction.
  • Celebrate specific actions employees take to ensure customer satisfaction and success.

The bottom line is that at Zuora, we take this very seriously and we are working on some exciting initiatives focused on Customer Experience.

Stay tuned for future posts where we’ll dig deep into each of these tenets and provide some tactical suggestions as to how your organization can maximize customer satisfaction and loyalty.

Kim Kardashian's Designer Shoes As a Service - One Haute Subscription

by Megan Golden

If you’ve been keeping up with the Kardashians, you know that Kim recently launched ShoeDazzle, a subscription service for designer shoes! While the name reminds me of a costume accessory from my 5th grade jazz recital, the idea is genius... and let’s be honest, a little bit sexy.

For decades, celebrities have stepped outside their "talent" to jump on the latest bandwagon - from checking in to rehab, to having a baby, to launching their own personal brand of the latest must-have. If a female celebrity doesn’t want to pop out a baby and name it after a fruit (sorry Apple Paltrow), she’s most likely to go the fragrance or clothing line route. With her recent break-up from Reggie Bush, Kim Kardashian had no choice but to go the apparel route.

Here’s how it works. You take a series of short quizzes; think Cosmo meets Vogue.

• Who do you think is better dressed? (Btw, the correct answer is the model from the Zac Posen Summer ’10 show.)
• Which brand do you like best? (L.A.M.B. over Coach and Bebe.)
• Which celebrity style do you most admire (I stayed loyal to my longtime girl-crush Reese over Sienna & Rihanna.)

Suddenly I was funneled into a this-type-of-girl-likes-these-types-of-pumps bucket... and I liked it! After a couple of days, Kardashian’s shoe stylists sent me an email with 5 shoe suggestions for that month. After much debate (Tien, I promise I did this on my lunch break) I went with the platform suede pump in slate (so Fall 09!) that will carry me from the office to SF night life - for the month of August!

What’s so haute about this? It’s just another industry moving from the traditional buy model to the subscribe model. This is especially reflective of our current economic climate; most women are more apt to spend $39/month for the in shoe rather than paying hundreds of dollars to own them outright; especially when they have the potential to be out before they’re even paid off. You’re keeping with the trends without breaking the bank!

So for the Zappos, Piperlimes, and Shoes.coms of the world - consider a move to subscriptions to cater to the Shoe Lovers on a budget.

As for you, Kim, thank you for allowing me to go from a designer shoe ogler to a prancing stiletto trendster.

PS: And Kim - Reggie has just been removed from my fantasy football draft. You’re welcome.

Closing the Books: Alleviate (some of) the pain and shorten the process

by Amy Pruitt, Zuora Account Executive

Before I launch into a discussion of the process and pains associated with closing the books, it should be acknowledged that companies of varying sizes will have very different experiences. A $1B Enterprise company will differ significantly from a company that is aspiring to be that $1B company. If you fall into the second category, read on:

“How long does it take you to close your books?”

When I ask this question of clients and prospective clients, 99% of the time the initial response I get indicates to me that the client is thinking “Closing the books is not on the top of my list of ‘Fun Things To Do or even to Think About‘, but it is at the very top of my list of ‘Things I Have to Do, and Do Well.’”

The actual answers I get range from “three to five days” to “two weeks”. No matter what the spoken answer is, the vibe is always, “I wish we could close the books faster, and that it wasn’t such a painful experience.” For subscription companies, there also seems to be a direct correlation between the complexity of pricing models and the time required to close the books.

In order to understand the health of your business, and take swift action to help the company maximize value, you need to accurately and quickly report on your organization’s financial results. In this process, one of the key themes you want to create and maintain is “trust.” Let’s say you are a $30M company with IPO aspirations; since a strong level of trust in your revenue line is a crucial component of the company’s eventual valuation, you must be able to reflect accurate and meaningful results. The same is true for smaller growing firms that plan to raise another funding round.

I ask the question about ‘time to close’ because Zuora makes it easier for you to close your books – accurately, quickly, and consistently- and to take full advantage of having done so.

Zuora helps by removing manual steps, integrating with other systems, maintaining an accurate subledger, making reconciliations easier, automating reporting, and keeping an accurate record of very complex inputs such as co-terminus subscriptions, payments, pre-payments, usage, delinquencies, monthly recurring charges, and non-recurring charges.

Some of the downstream effects of closing the books faster include the ability to:

• Drive business decisions at a macro level. Primarily you want to know, “What should we fix, or what should we keep doing?”
• Act decisively on the information in a timely basis. If you have information ten days earlier you can affect vital course corrections quickly, instead of getting the same results next month. You are faster and more nimble.
• Spend less time in your accounting processes and reduce the amount of manual effort required, thereby lowering your staffing requirements. Also, this allows for the ability to use ‘less expensive’ resources because the process is less complex.

So if you’re asking yourself, “How can I close my books faster?,” we’ve got a few suggestions.

• Perform a systems review. What systems do you currently have in place? To what degree do they help automate accurate transactions, processing and reporting?
• Analyze business process flow. Where are the manual steps in your closing process? Which data feeds could be synchronized or automated? For example, feeding invoice information directly into both the CRM system and the accounting system.
• Evaluate your close schedule. What activities are being done? By whom, and are the right skill sets in play? When?

Then give Zuora a call and let’s talk about your current process, how you can optimize your operations, think through ideas to help substantially reduce your close process, and see how you can manage complexity and actually turn it into trust – on your way to getting to $1B.

Could Subscriptions Save the Online Publishing Industry?

by Tien Tzuo

There's some irony to the fact that the publishers of the Wall Street Journal made waves this week by announcing they will soon charge for all content. On a conference call held after the company’s earnings announcement, News Corp Chairman Rupert Murdoch said that he plans to roll out paid content on all of their news websites as early as this financial year. Aren't newspapers one of the originators of the paid subscription model?

Earlier this year, we blogged about how subscription revenue models are taking center stage, and noted that Murdoch hinted at a move towards paid content saying "the challenge for media organizations was finding a balance between advertising and subscription revenues and figuring out how to charge for content without alienating existing users -- which could lead to Web sites offering tiered levels of free and paid-for material."

Staci Kramer, co-editor of PaidContent.org, really hit the nail on the head. Interviewed on Marketplace yesterday, she said:

"There's a lot of different ways that people are trying to do this. You know, what I think what we're going to enter here is a very big experimental phase with News Corp, and how they will handle this. And if you look at, whatever they do at the beginning shouldn't be viewed as something that even they expect to be in place a year from now."

News Corp is not alone - the online publishing industry as a whole is starting to come full circle on the topic of paid content. Wired Magazine is talking about "raising the price or straying from the traditional magazine business model with ideas like tiered pricing with different benefits."

Zuora customer GigaOM Network understands the power of subscriptions and recently launched a premium content service for its annual subscribers.

We’re watching this space with great interest. Subscription business models are - at the very least - part of the answer to helping struggling online publishers. But, does anyone believe that free news sites will cease to exist? The paid content providers will have to find a way to differentiate themselves in order to justify the premium.