OK, OK, that's categorically not true. But I said it to make a point … later. But since you're here, you might as well hear me out.
Said no CEO to a customer ever:
“Thank you for your business. Now don’t ever come back. Go on now! Git!”
Subscription-based revenue models are all the rage. And why wouldn’t they be? They provide a more predictable revenue stream, higher lifetime value (LTV) for a customer, and enviable retention rates. No wonder investors are flocking to support SaaS, PaaS, IaaS, and … AaaS (Anything-as-a-Service).
Customers are willing to pay more (in the long run) for lower monthly payments, faster time to value, lower switching costs (purportedly), and innovative products and services.
That makes every non-subscription based company look stodgy and old school, like a T-Rex that’s long in the tooth and heading toward extinction.
But wait. Don’t non-subscription businesses still want to satisfy customers and retain them for future business? Isn’t there enough data to calculate the average value of that future business over time? Then isn’t it still a subscription (of sorts), but without a strict cadence of time and amount specified in an ongoing contract? (Yeah, I know, but you’ve made it this far, so you might as well finish.)
Subscription-based businesses have started a movement called “Customer Success Management” in which they staff and resource a program devoted to the success of their customers at no extra cost to the customers. It’s one of the (many) reasons that SaaS is rapidly replacing traditional licensing and deployment models in the software business.
The SaaS companies want to ensure that their customers will continue renewing their subscriptions, and the best way to do that is to make sure that they get the maximum value (success) from that solution. So they put Customer Success Managers (CSMs) in place to help the customers be successful. The idea is simple: if you succeed, we succeed—in that order.
Non-subscription business leaders don’t need to change their pricing/licensing/revenue models as much as they need to change their definition of “success.” If “customer-centric” means anything at all, then a customer’s success ought to be a leading metric, not a “that’s-nice-will-you-do-a-case-study-now?” afterthought. Customer Success Management ought to be a hallowed initiative in every B2B organization.