5 Ways That Subscription Pricing is Transforming Sales

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5 Ways That Subscription Pricing is Transforming Sales

Welcome to the world of everything-as-a-service! Once, solely the domain of magazines and utilities, subscription selling is now everywhere and businesses are trying to figure out if and how it can benefit them.


My alma mater, the software industry, jumped on this bandwagon early, having learned years ago that they could make enterprise purchases much more palatable if the bill was split into smaller amounts. Of course, there were other motivating factors as well – namely a need to connect on going value with ongoing revenue.  


As customers used products for extended periods of time, “maintenance” money became a harder sale. Customers could drop maintenance with little to no immediate impact to their business. In fact, they could even pay for 3rd party maintenance for less money and sometimes even better service.


But “as a service” has gone well beyond software these days. In my home alone, we subscribe to printer cartridges, music, movies, video games, fruit and even dog training videos.


Of course, there are numerous reasons why the subscription model is beneficial to businesses and customers but today we focus on its impact to SELLING. Here are five ways that the subscription economy is transforming buying and selling. Are you ready for the changes?


1.      Easy Come…

In the subscription model, there is a perception – regardless of the complexity of the solution – that as a customer you can start quickly and easily. Put in a credit card number and BAM! you have a shiny new solution for your business.

From a sales (and product strategy) perspective this means that we must deliver on those expectations. Are our products and processes ready to move at the speed of our buyers? If not, it’s time to grease the wheels and speed it up.


2.      …Easy Go

Subscriptions have also changed customer commitment to products. The way they see it, in exchange for getting money every month or year, you and your products have an obligation to continue providing clear and identifiable value. Customers don’t feel stuck with solutions anymore – if they aren’t happy, they will leave.


So how are you articulating value on an ongoing basis to your customers? Take Salesforce as a model. Every month, they send a statement to each account that highlights how their product is being used (or not used) in an organization. Such a simple, automated process helps companies faced with questions like “are we even using this product?!” That’s why #4 is so important…keep reading!


3.      Start Small

It used to be that we would try to sell as much as possible in the initial deal – sometimes even if it meant risking the sale by pushing just a bit too hard. Remember those expectations around “easy come…easy go”? Part of addressing “easy” could be giving prospects and customers a way to start small to validate your products and solutions. Make sure you’re ready to meet these expectations or have a good explanation why not.


4.      Always Selling

Another big transformation that comes from subscription selling is that customers are always buying so we must always be serving and selling. We must stop thinking of deals as “closed” but rather as “started”. A contract is just the beginning of our relationship and our revenue stream.


This distinction should lead us to reconsider the roles of everyone in the organization and how they contribute to customers’ experience. From the front desk to the back office, from sales to service, every interaction with a customer is a valuable touch point for us to find new opportunities and strengthen our relationship.


5.      Value Beats Revenue

There is a famous phrase of enterprise sales directors that goes like this: Don’t confuse sales with implementation. I am here to tell you that you should not only CONFUSE sales with implementation but that you should completely OVERLAP them. They are one in the same in a subscription world from a customer’s perspective.


And from a business viewpoint, the focus is changing from the SALE to the VALUE as we all live more day to day with subscriptions as well. Each customer is a cost to the business and we ought to build practices that ensure we get as much value as we give. Money is only one dimension and if a customer isn’t delivering other value to us, well, we might also try the “easy come, easy go” philosophy.


The Final Installment

Embrace the subscription but, be smart about it. To be successful in sales and marketing in the new world, we must interact with our prospects and customers differently.


Now, if you’ll excuse me, I have a dog training video to watch before my subscription runs out.



Julie Holmes is a sales & marketing advisor, speaker and Whole Company Selling leader. She works with B2B companies that want to sell more and increase their customer lifetime value by helping everyone in their organization understand and share their value with prospects and customers. Give her a call if you’d like to have everyone in your company was selling. www.julieholmes.com

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