Getting stuff on subscriptions instead of paying for them one-time, isn’t a radically new concept. The Subscription Economy has been around since the time horses pulled cars, Pluto was still a planet, and a smart baker thought of selling his bread in nice little slices. It was the invisible hand that got your newspapers delivered home on a monthly basis, made you pay for a lifetime membership to that gym you visited three times in the past year, and made the Dollar Shave Club cooler than the Fonz.
But the growth of the Subscription Economy today is changing the way we sell our products and the way our consumers see them. It’s changing the focus from acquisition to retention, and from salesmen to success managers.
Sales guys need to roll up their sleeves and help customers win
A decade back, a suited up salesman could easily walk in to a shiny building, close a $10,000 deal and walk away with a hefty 10% commision. But with more businesses moving to subscriptions, the deal size comes down to say $100 a month, and the commission doesn’t even cover the taxi expenses for your travelling salesman.
Since the subscription economy pushes the focus from one-time deals to recurring revenues, your sales team now has to make sure the customer sticks around for anything between 6 to 18 months just to break even. That means just getting a deal approved isn’t good enough. Sales teams need to help customers understand your product and love your service in order to keep them coming back.
It’s ironic how Salesforce, one of the pioneers of SaaS and the Subscription Economy, has technically killed the sales force – at least in the traditional sense.
Concentrate on increasing the volume of customers
Of course, the subscription economy forces you to front-load your costs. It could take you a year to reap the revenue you could have received with a one-time payment. But the lower entry-level cost also makes getting a sale so much easier. Your clients need to think way lesser about a $100/month investment, vis-a-vis cutting a cheque for $10,000.