- Companies Focus On Building Relationships, Not Just Transactions
- From Subscription Billing To Recurring Customer And Billing Management
- The Biggest Business And Technology Trends Drive Recurring Customer Relationships
Forrester’s research uncovered a market in which Zuora, goTransverse, and Aria Systems lead; BillingPlatform, Apttus, SAP Hybris, and Digital River follow close behind; and Oracle and Vindicia offer competitive solutions for specific needs. This market is growing because more digital business professionals see this software as a way to manage innovative business models and solve acute billing pain points with increasingly empowered customers.
Agility, Automation, And Analytics Are Key Differentiators
As legacy technology becomes outdated and less effective, leading vendors will prove that they understand the customer experience impact of billing technology. How? These solutions will improve business agility for their buyers to react to changing market conditions; automate consequences to customer life-cycle changes; and provide actionable, recurring customer- and revenue-focused insights.
Companies Focus On Building Relationships, Not Just Transactions
Business model change begets technology change: To support a business model change, 40% of global decision makers and influencers whose priority is to increase influence and brand reach in the market say they need to adopt new technology (see Figure 1). Furthermore, 29% plan to adopt a recurring revenue-based business model in the next 12 months.
Enter the recurring customer and billing management platform. Why must a billing platform enable recurring customer relationships? Well, as a digital business leader at a US insurer told us, “My billing and payments team is tactical, not strategic. But my billing experience is my top touchpoint. It’s where I make or break my business goals so it’s where I need to advance my strategy.”
FIGURE 1 Firms Need New Technology To Support New Business Models
“You said that changing your business model was a priority for the coming year. What action is your firm taking to achieve this objective?”
From Subscription Billing To Recurring Customer And Billing Management
In the 2015 Forrester Wave evaluation of this market, Forrester called this technology category “subscription billing platforms.” however, the term “subscription billing” is now too limiting for what these solutions manage:
- Subscriptions aren’t for every company — but recurring relationships are. these solutions have shifted the focus away from traditional subscriptions and toward how companies design, launch, and manage any business model. Business models now include hybrid models that combine one-time transactions, subscriptions, and usage/consumption rating. For example, Lyft is not a subscription business — but it needs a billing platform that supports multidimensional business models with a focus on recurring customer relationships. Why? Lyft keeps the card on file, works with variable charges based on time and distance and surge charging calculations, and has recurring customer relationships.
- Business models and billing are tools for customer relationship building. Slack uses a “fair billing policy” to build trust with its business product customers and prospects — with credits and prorated charges for any inactive or new users in the month so businesses only pay for what they use. Recurring customer and billing management solutions will not determine the right business model for you, but they do deliver a combination of agility, automation, and analytics that facilitate business model innovation and managing recurring customer relationships.
Buy Research Report: Radiology Information Systems Market to Witness A Steep CAGR Of 8.3%
Buy Research Report: Mobile Water Treatment Systems Market Set to Grow US$ 1,952.0 Mn during 2020-2030
Buy Research Report: Electric Trolling Motors Market to Expand at a CAGR of 3.2% During 2020-2030
Buy Research Report: Global Solar Cells and Modules Market Strategic Assessment and Forecast by 2026
Buy Research Report: What Are the Upcoming Trends in the Telemonitoring System Market? What Impact Would They Make in Forecast – 2026?
The Biggest Business And Technology Trends Drive Recurring Customer Relationships
The age of the customer is pushing firms of all sizes and across all industries to adopt more recurring relationships with their customers. to establish and nurture their customer relationships, businesses now must:
- Get closer to the empowered customer. Ford has moved from thinking of itself as an auto company to an “auto and mobility company.” Why? rather than focusing on just the one time car purchase or the driving experience in isolation, Ford wants to be a part of the customer’s journey throughout the day, “from home to desk to bed” and everywhere in between. The company understands that recurring customer relationships create more opportunities for insights because there are more touch points with which it can collect data. in turn, that data is key to understanding and improving the experience for today’s empowered customer. And Ford isn’t alone in thinking this way: of global decision makers and influences whose priority is to increase influence and brand reach in the market, 34% plan to increase the frequency of customer engagement (see Figure 2).
- Find new revenue streams and diversification. CLEAR recently expanded its expedited security membership program beyond airports to entertainment venues. This move adds value for existing CLEAR members and also opens new revenue streams in the data that it can sell to those venues (e.g., customers in attendance and what they’re buying). Smart businesses find ways to use data and technology to provide value to customers, either by increasing the digital content of existing physical products or by introducing new services or commercial models.7 Often, this move adds recurring business models to the company’s portfolio and/or adds complexity to billing requirements.
- Experiment with the internet of things (IoT). Giants and startups alike from Caterpillar to Canary are using subscriptions and consumption-based business models to monetize their new service offerings around connected devices and machinery.8 In fact, 40% of global business and technology decisions makers and influencers say developing smart connected products or assets is a priority over the next 12 months (see Figure 3). The IoT brings another wave of business model innovation as firms build entirely new service offerings to be packaged with connected devices, from real-time monitoring to preventative maintenance and predicting usage.
- Capitalize on the cloud. As B2C and B2B digital business professionals migrate or reinvent software products, business, and consumer services for the cloud, they invariably migrate to subscription- or usage-based monetization models. Fifty percent of global business and technology decision makers and influencers say increasing the use of cloud is a priority over the next 12 months.10 In 2017, we expect software-as-a-service (SaaS) spend in particular to be more than 1.5 times that of license software.