In business-to-consumer (B2C) markets today, subscriptions have become a way of life. Individuals and families are paying monthly fees to access everything from movies and TV content to their favorite cups of coffee, take-out meals and many other types of goods and services.  

Consumers value guaranteed access to ever-improving products, services and experiences. Providers are rewarded for maintaining engaging services that produce highly predictable revenue streams. 

To deliver their products and services, most B2C companies are relying on what has become the standard business-to-business (B2B) business model – As-a-Service – all based on cloud platforms. 

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Pursuing subscription models requires a fundamental re-evaluation of how a business interacts with its customers, as well as how it bills and records revenues. 

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As-a-Service B2B product or service models can vary widely. In fact, a growing number of companies are exploring how they can diversify their revenue streams to include not just traditional transactional sales, but many other types of subscription offerings. 

Pursuing subscription models requires a fundamental re-evaluation of how a business interacts with its customers, as well as how it bills and records revenues. Embracing this model requires new processes and systems to be implemented to support this new, experience-first way of serving customers. It is also important to understand how subscription offerings may end up cannibalizing existing traditional revenue streams. 

Just as important, the shift to subscriptions demands a close examination of the experience the organization is seeking to deliver. Building meaningful customer engagement for B2B subscription service is critical for success. These subscription services will need to offer greater convenience, flexibility and innovation – all while being customer centric. 

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Accenture has crafted five guiding principles to help B2B companies address these transformation challenges:

Principle 1: Orient everything around the customer 

Create a compelling subscription offering that really solves a customer problem. It is also important to understand your buyer persona and their buying criteria, as well as thinking through their overall buying journey.

Principle 2: Make deliberate decisions about where (and where not) to play 

Develop a focused investment strategy and business case that include clear key performance indicators (KPIs) for measuring progress. Drive the transformation by anchoring your strategy around these subscription model KPIs.  By understanding those metrics, you will continue to tweak and tune your model in order to find a profitable, hypergrowth segment to play in.

Principle 3: Plan for a fundamental shift in how to operate 

Continue to evaluate your subscription business to find ways to grow and create scale. Growth businesses will require new capabilities, sales motions, processes and platforms to be successful. Building these types of businesses is not something to enter into lightly. 

Principle 4: Build with the whole ecosystem in mind 

Making the shift to a subscription model doesn’t need to be a DIY effort. Test new ideas and accelerate time to market by smartly leveraging partner platforms and capabilities. Collaborate in the right way to speed up and scale using platforms, applications, technologies, managed services and other non-core components of your business. 

Principle 5: Revisit the foundational architecture  

Subscription models are dynamic by their very nature. Ensure that your B2B subscription product offerings are resilient by using flexible architectures and processes that can evolve over time to support ever-changing customer needs. 

Embracing a B2B subscription model doesn’t just bring value to your customers. It also opens up new revenue streams, products and services and builds resiliency for your overall business. In upcoming posts, we will take a closer look at what it takes to bring these models to life. 

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Kevin Dobbs

Managing Director – Accenture Consulting

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