Subscribed summary

Companies like Netflix, Spotify and Amazon are ubiquitous today. In fact, it’s difficult to imagine what life was like before they arrived on the scene. Chances are, you have an account with at least one of them. So how did they come to exercise such an influential role in our lives?

Well, subscription access to music and video has grown enormously over the last few years.

Many of the industries currently being shaken up were built by executives who traveled in planes and trains with newspapers in their hands. In this blink, we’ll take a look at how those two markets – travel and news – are being revolutionized by subscription models.

Let’s start with transport, an industry that’s already been partially transformed.

So shifting to a subscription model has clear benefits but the payoff isn’t immediate. In fact, the process can be a painful one. To get through it, companies often have to follow Adobe’s lead and learn to swallow the fish.

Before we unpack that odd-sounding concept, let’s rewind to 2011.

So far we’ve been mostly looking at the way markets have adopted subscription services. In this blink, we’ll take a closer look at the ways the new business model is affecting actual companies.

Let’s start with innovation.

“Marketing” – it’s a word that brings to mind things like Mad Men’s Don Draper, infectious jingles and massive billboards. But what’s its role in subscription-based models?

Well, to understand that you need to look at traditional marketing, which is all about the “four Ps” and “push and pull” factors.

Sales teams sometimes get a bad rap because of their tendency to prioritize selling products rather than caring for the customer’s experience.

That attitude can lead to all sorts of problems down the road. When customers end up with broken or malfunctioning goods, there’s no one to turn to because the company already got what it wanted – their money.

The author remembers giving an enthusiastic presentation of his company’s annual-growth forecast in the early days of Zuora but getting a markedly cold response. The profit projections, his audience told him, just weren’t impressive enough.

But the problem wasn’t the company’s figures; it was traditional bookkeeping.

Most businesses treat their IT departments like engine rooms. It’s the place that keeps the operation running smoothly, improves efficiency and generally ensures that everything is ticking along.

But that’s changing. The old engines just aren’t fit for today’s purposes.

By now, you might be wondering how to start transforming your business into a successful customer-oriented subscription service. A good place to look for advice is Zuora. Realizing that the concept was far easier to grasp than it was to implement, the company came up with its own system to help manage the transition: PADRE.

PADRE is a way of visualizing the business with the customer experience always in mind, and it stands for pipeline, acquire, deploy, run and expand. Let’s take a closer look at what each component actually means.