In the old world, you could grow by doing three things: sell more units, increase the price of those units, or decrease the cost required to make those units. In today’s world, you have three new imperatives: acquire more customers, increase the value of those customers, and hold on to those customers longer.

Service features billed by usage are usually the core value metric of a subscription service offering: the most valuable feature to use, and the most expensive to deliver. If a company charges for use of something that is not clearly providing value, there is the potential to enrage rather than engage!

The Life of Pablo a minimum viable product. That may sound like a pejorative term, but a minimum viable product is actually incredibly important. Only after it gets something out in the market can a business gather customer feedback and use this data to iterate and improve in a continuous deployment cycle. The MVP is a defining principle of cloud s

If you’re doing it right, expansion—that is, gaining more revenue from dedicated subscribers over time—should happen naturally. When you expand your value, then the commercial benefits will follow. The ability to develop customer relationships over time is where the really amazing subscription companies distinguish themselves from everyone else. If

Instead, I argued, the goal of business should be to start with the wants and needs of a particular customer base, then create a service that delivers ongoing value to those customers. The idea was to turn customers into subscribers in order to develop recurring revenue. I called the context for this change the Subscription Economy.

I think everyone would agree that brands are still very important, but today you communicate your brand through experiences, not ads. The best sales pitch for Netflix is binge-watching a great Netflix show. The same principle applies to buying glasses from Warby Parker. Or conducting a Google search. Or looking up a prospect on Salesforce. At the s

In working with hundreds of companies, we’ve learned that the solution to sustaining a high growth rate is to diversify your approach to growth and embrace multiple growth strategies.

Upselling and cross-selling are frequently conflated, but they are really two distinct growth strategies. While upselling is a strategy designed to sell a more feature-rich (and expensive) service edition, cross-selling is a strategy designed to sell additional services to provide a more comprehensive solution. According to a recent report by McKin

Your organization is fluid but cohesive, recurring and responsive, and above all, relentlessly centered around your customer.