Zuora’s February Release: New Features Propel Z-Customers Further, Faster

by Clement Wang

Hi, this is Clement Wang— I run the Product Management team at Zuora. The hallmark of the SaaS model is that customers get automatic product updates with zero effort. Here at Zuora, we’re pushing the envelope with product updates every month—that’s five times the innovation of the average SaaS company, which generally offers updates 2 or 3 times a year . In fact, our latest monthly release just came out last week, and I thought I’d share with you some of the great new features, and the customer use cases that inspired us to build these features.

Custom Roles & Permissions: Our new Custom Roles and Permissions feature allows administrators to control what each user can do in the system, based on their roles. What can you use this for? How about to pass audits? Jessica Huber, Controller at LiveOffice, uses Zuora as a full revenue subledger. When it came time for year-end audits, Jessica needed to lock down sensitive financial operations, such as the ability to delete accounts or cancel posted invoices in order to prepare for an upcoming audit. With the new Custom Roles and Permissions feature, Jessica was able to create a roles specific to different members of her team, consolidating control and authority to a trusted few members of her team. In fact, Jessica was even able to create a custom role for the auditor to use while performing the audit!

Auto-Renew in Advance: Our new Auto-Renew in Advance feature allows users to easily send bills to customers in advance of upcoming renewals. Not only does this accelerate cash collections and increase upsells, but predicting revenue from renewals is much easier. Lisa Bailey, VP of Business Operations at InsideView likes to bill her customers 15 to 30 days before the end of their subscription term, which allows her sales tem to start the renewal process early. It also ensures that her customers do not have any uninterrupted service from any contract renegotiations. Auto-Renew in Advance allows Lisa to use billing as a tool to help grow her business by maximizing revenue, improve forecasting of cash flows and collecting cash faster.

Account Key Metrics: Zuora is now the only vendor that provides current monthly recurring revenue (MRR) and Contracted MRR (representing all MRR under contract, including those that take effect in the future). These key metrics are now displayed prominently alongside other key account metrics when viewing the account. For Jason Seed, CEO of Codesion (formerly CVSDude), this is huge. "Now I not only know where my business stands today overall, but I can see the value of each customer today or in the future, all in one account screen."

Multiple Merchant Accounts or Payment Gateways: Zuora’s Multiple Merchant Account or Payment Gateways feature allows companies of any size to process different billing accounts through different Payment Gateways or Merchant Accounts. Each Billing Account in Zuora can be assigned to a particular payment gateway configuration, providing maximum flexibility to support things like white label/partner selling, and international payment optimization. One of our customers will use this capability to support white-label resellers. Payments on products sold by a partner go through a different payment gateway than those sold direct, allowing payments to be distributed to the appropriate parties. Several of our international customers will use a different gateway for European customers vs. U.S. customers in order to maximize the types of payments they accept and optimize processing fees and acceptance rates.

Support for Paymentech: Zuora gives customers more flexibility to use preferred payment gateway vendors to process payments. With the integration to Chase/Paymentech, Zuora customers can now process recurring and one-time payments through one of the largest payment processors in the U.S. An early user of this capability is Ricoh, who had a corporate-wide contract with Chase/Paymentech for preferred rates on processing payments. By seamlessly integrating Chase/Paymentech into Z-Payments, Zuora can now process payments through all the major payment gateways.

For more information on these new features, check out our New Feature page:
http://www.zuora.com/company/subscription-management-new-features.html

Billing Lessons Learned at eBay

by Elizabeth Tse

In my career, I have always held roles where - in one way or another - the complete focus is on the customer.

When I was at eBay, I oversaw worldwide billing, payments and collections operations, and gained an intimate understanding of what it takes to develop, implement and maintain a successful, large-scale billing and payments system. After many years in this industry, I have a deep and unique understanding of the intricacies of billing and payments. Even then, I bet you can all guess the most important element of a successful billing system….customer satisfaction.

Too often, people consider billing a back-office function and I think that’s so wrong. Billing is fundamentally a customer-facing process. In which other process in your entire business do you have an opportunity to touch your customer’s bank account?

As we embark on 2010, I wanted to share some billing advice and insight, relevant to companies of any size and at every point in their lifecycle.

Bring billing to the front office.
It’s your most important and your most regular direct customer touchpoint. Think of billing as an ongoing relationship with your customers, not just a transaction.

Pricing and packaging experimentation leads to competitive advantage
A good billing system is not a cost management issue, it helps a company focus on revenue growth and provides the flexibility to change, test and optimize pricing. Companies that experiment with pricing and packaging have a competitive advantage in that they quickly learn what their customers want and how much they are willing to pay. Testing various billing options makes it possible for companies to leverage their service to capture as much market share as possible. Get the most out of your services – bill strategically and learn from it.

Billing is hard.
Sure it starts out easy for some with a simple monthly package but then quickly a business grows and wants to package and promote different offerings. As you expand domestically and/or internationally, you need to address the complexities that accompany different taxation rates and laws, multi-currency conversions, and more. Billing is not just about an invoice, but also pricing, payments, collections and ultimately impacts financial reporting. It has multiple downstream implications.

Anything less than 100% accuracy is not acceptable to customers.
No customer ever shares a good billing story with you since 100% accuracy is the minimal acceptable performance level. However, they sure as heck will let you know if it's wrong. At eBay, during peak hours, customers were listing literally thousands of items per second. Simply being 99.95% accurate for an hour would have left me with thousands of unhappy customers, hence my keen focus on getting it right all the time.

Billing is fundamental to your business process, but it’s not a core competency (unless you’re Zuora).
Billing is mission critical and has to be done right, but you also need to have the confidence and freedom to focus on product development and customer satisfaction in other areas. Spend valuable time building what you sell and buying what you don’t. We’ve addressed this before on the Z-Blog.

I do have a few more billing tips and tricks up my sleeve and will continue to share my thoughts. In 2010, we will maintain our fierce focus on customer success and will showcase the real results and benefits realized by Zuora’s customers. You can already read about many of our customer success stories on Zuora’s customer page. We will expand this series to include regular blog posts as well, so you’ll be hearing from me a bit more this year.

Happy New Year!

Zuora Holiday Food Drive: When Opportunity Knocks at the Wrong Door

by Erik Haus

Like most startups, Zuora can be quite a hectic place. Whether we’re gearing up for a monthly product release, a new marketing launch, or the typical end of the month sales rush, there is always something to occupy our time. So it takes quite a meaningful event for the entire company to take time away from their jobs, especially this time of year. But when some mysterious barrels were delivered to our office, we had the catalyst for just such an event. We share an office building with Biz360, a social media monitoring company, and a Zuora customer. For the last few years, they’ve held a holiday food drive to support the Second Harvest Food Bank, the food bank for San Mateo and Santa Clara Counties, serving over 200,000 people each month. Each year, Second Harvest brings them barrels in which Biz360 places their donations.

Well this year, the barrels were accidentally delivered to our office. While we didn't know how they arrived, we here at Zuora were not about to let a fortuitous opportunity like this pass. As the saying goes, when opportunity comes knocking, even at the wrong door, be sure to answer! And so we did, and turned misdelivered barrels into our first annual Z-Food Drive.

To make the food drive both fun and productive, we divided the company into three teams, and made it a competition to see who could donate the most food. We divided the employees into three teams based on department (engineering, services, sales, support, etc), but marketing quickly turned our three teams into Team Ralphie, Team Red Ryder, and Team Leg Lamp, based on the classic holiday movie A Christmas Story.

Our food drive was a resounding success. As you can see from the photo, each team more than filled their respective barrels. Not only was this a fun competition that company could rally around and allow us to take a breather from our event filled work schedules, but it was also a great way for Zuora to give back to our community.

   

Needless to say, from the success of our holiday food drive, we'll be following in Biz360's footsteps, and making the Z-Food Drive an annual tradition. This goes to show you we can just as easily give back on a recurring basis, as we can help companies monetize on a recurring basis.

Happy holidays to all, and have a great 2010.

Paid content – Accenture bets on subscriptions, and so do we.

by K. V. Rao

Will consumers pay for online content? Of course they will and they already do. Look at the Wall Street Journal, Financial Times, even Netflix. At Zuora, we’re a bit weary of the over-reaction that occurs when companies announce planned paywalls. Business models are good things.

Paying for something that was once free might not be our first choice, but the free rides are over. Internet advertising spend continues to go down – the industry lost another 5.3% or $10.9B in the first half of 2009 – and online publishers continue to struggle with audience numbers. Content companies finally realize that they need business models and we, as consumers, need to accept that there really is content that we are interested in and will pay for. The sad truth is, if we don’t pay for what we want (like local news), it may very possibly cease to exist.

Rupert Murdoch made big waves when he said News Corp would start charging for all content. When I look back at other announcements made throughout 2009, I’m not so sure why everyone was so shocked at Murdoch’s plans. More and more companies like Hulu and the recently announced magazine consortium, including publishers News Corp, Hearst, Time, CondeNast and Meredith are putting wheels in motion to charge for content in the coming months.

As well, throughout the year, there’s been growing evidence that supports the fact that consumers will pay. Two surveys that stand out to me are Accenture’s Global Broadcast Consumer Survey from earlier in the year and the recently released survey by Boston Consulting Group.

Accenture’s findings highlighted the fact that subscriptions will likely reign supreme (we like that!). Accenture says “despite the downturn in the global economy, consumers revealed an increased willingness to pay for different types of programming.” Folks in every age group preferred subscriptions over pay-to-play. Accenture concluded “subscription service content appears the most resilient to the economy, as its consumption shows no signs of being hit by a drop-off in consumer spending.”

BCG’s survey found that consumers were more likely to pay for certain types of content, specifically news that is:

• Unique, such as local news (67 percent overall are interested; 72 percent of U.S. respondents) or specialized coverage (63 percent overall are interested; 73 percent of U.S. respondents)
• Timely, such as a continual news alert service (54 percent overall are interested; 61 percent of U.S. respondents)

In conjunction with what kinds of content people would pay for, they also told BCG they’d be willing to pay $3/month in the United States and Australia and even $7/month in Italy.

For example, based on BCG’s findings, an American online publisher with a relatively small monthly readership of 30,000 readers could bring in close to $100K in revenue via paid content. That’s money that wasn’t there before…not bad.

What this says to me is there are content delivery and subscription models that will work for everyone – content providers and consumers. Freemium, pay-as-you-go, usage-based pricing, recurring subscriptions, ad revenue. There is something for everyone and at Zuora, we’re confident there is a solution. We just need some time to work it out on the business side.

Tenet 2 for Managing the Customer Experience in a Subscription Economy

by Katrina Wong, Director of Customer Experience

In my last post, I discussed why a focus on the customer experience is essential to growing your subscription business and outlined the three tenets of operating a thriving subscription business with a customer experience focus:

• Anchor your business around the customer’s experience
• Embrace the voice of the customer
• Build a company culture that internalizes the customer experience

In this post, I’ll elaborate on Tenet #2 – Embrace the voice of the customer.

The good, the bad, and the in between.

Whether you do formal focus groups and surveys or gather customer feedback through informal lunches or face-to-face meetings, your goal is to understand a day-in-the-life of a customer and how your service makes his day easier or better.

Feedback will generally be a mixture of the good, the bad (and we all hope that there is more good than bad), and the in between. The key is to embrace all feedback and understand what your customers are saying about your product.

Take the good and understand why. Take the bad and internalize what it means to your service and take action. The in between is valuable and is usually due to your customers not understanding how best to use your product. Strive to tip the scale on the in between toward the good. The good serves as a benchmark for the bad and the in between. Turn around negative or neutral sentiment by employing learning tools such as better training or knowledge share.

The bad is where you get the most value. Embrace it and understand that it is usually at the core of what your customers want and need from your product. Take Syncplicity, a Zuora customer since March ’09, who self-implemented only to run into challenges, as reported in Cloud Ave’s blog:

In frustration, Syncplicity CEO Leonard Chung posted a scathing comment on LinkedIn. Zuora CEO Tien Tzuo saw the comment and, after a reportedly sleepless night, contacted Leonard wanting to repair a very public falling out. He assigned his top engineering exec to the problem. In turn, Chung assigned his key person to work with Zuora on the issues.

The process to fix Syncplicity's issues took 3 months but at the end of it all there was a successful roll out of the new Syncplicity product in November and, in a happy ending to a sad story, Chung is now a reference customer for Zuora and is pretty positive given the history, as he says, "we had a rocky start, but they really pulled through for us”.

Share customer insight across your company on a regular basis.

Once you have your findings, it is important to share them with the rest of your company. Build a feedback loop to the relevant departments (e.g., feature requests to product management, service issues to customer care, etc.) or publish them across the company. Just make sure it happens consistently and regularly. Make customer feedback a standing topic at company-wide, executive, departmental and/or operations meetings and off-sites.

Talk about customer needs and not personal or organizational preferences.

The goal is to act on your customer feedback. Maybe a cross-functional initiative gets created as a result or simply a project for one department. Whatever plan you put in place, what is key is that your actions are based on what your customers need. It’s easy to lose sight of that when we know we should be doing (listening to our customers) and actually doing it (getting the feedback). Building a culture that truly embraces the voice of the customer will keep you focused on the right actions to take.

Stay tuned for my next post on Tenet #3: Build a company culture that internalizes the customer experience and customer feedback.

The Secrets of Salesforce - Dreamforce’09 Recap and Twitter Contest Winners

by Tricia Reilly

This year’s Dreamforce was a force indeed. 16,000 attendees from all over the world gathered for three and a half days of networking, education, and inspiration. Dreamforce’09 marked Zuora’s second year as an exhibitor, and this time around we sponsored the AppExchange Appreciation Party at Temple.

A few of the highlights included:

• Tien’s session: Maximize Your Revenues: Market and Deliver Your Solutions on the AppExchange
• Gen. Colin Powell’s keynote speech
• Seeing so many successful Zuora customers exhibiting on the show floor – Marketo, InsideView, Xactly, Boomi, Cloud9 Analytics, Landslide, box.net, Genius, Ricoh and ThomsonReuters!
• Marc’s best-selling book Behind the Cloud and the 111 plays that propelled salesforce.com to a $1B business

Zuora has incorporated some of the same plays that salesforce.com used, and is launching a short video series featuring the secrets that catapulted their success. Delivered weekly to your inbox over the next 6 weeks, these two-minute vignettes will show you how to be just like the $1B success story.

Sign up today to receive these and other educational emails from Zuora.

Finally, congratulations to our Dreamforce Twitter Contest Winners:

Jarrod - Perspective Software
Justin - Fused Solutions
Bill - Aprimo