Sep 25, 2015

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Everyone’s going subscriptions and 2016 starts… NOW!

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The good news about subscription businesses? Much of your revenue is going to come back! The downside? Growth takes longer as your revenue recognition is prorated monthly. So if you have ambitious growth targets in 2016, says Jason Lemkin, you better start getting prepared now!

The impact of better retention? HUUUGE.

For every one percentage point increase in revenue retention, a SaaS company’s value increases by 12% after five years. This is from a whitepaper where you’ll need to sign up. But the argument is compelling if you need to make it yourself some day.

e-30 and e-90? New Star Wars characters?

Close…  For Indian ecomm, retention is the biggest challenge and they are focusing on the number of users who return with 30 and 90 days, thus e-30 and e-90. So they are focusing on a better online experience, through user experience and analytics as well as merging offline and online channels. Sounds like what US ecomm is doing as well!

Everyone’s going to subscriptions!

Software is almost all subscription now. See even installed software like Adobe and Microsoft Office. Then there are razors! And clothing. And even manufacturers like GM and Schneider Electric. Why? Two things investors love: financial stability and forward visibility.

Music has gone subscriptions and Spotify is trying to win it!

In my day, we place a sharp needle on a soft plastic disk the size of a small pizza to play music! And we bought it! Now we subscribe via services like Spotify. (IMO, subscription is so much better than owning). Spotify knows that they need to retain their users from other similar services so they focus on the specific user with great content.  Check it out!

 

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