Why SaaS is about more than Subscription Pricing

Guest post by Robbie Kellman Baxter, Consultant: Author: Speaker

This month, we are excited to feature Robbie Kellman Baxter, a sought-after consultant, writer and keynote speaker, on Stage 4 Solutions’ blog. As the author of both The Membership Economy: Find Your Superusers, Master the Forever Transaction & Build Recurring Revenue (2015) and The Forever Transaction: How to Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave (2020), Robbie helps organizations leverage subscription pricing, digital community and freemium to build deeper relationships with the people they serve.

In this article, Robbie provides great tips for organizations to apply to truly justify a “forever transaction.”

Why SaaS is about more than Subscription Pricing…and What It Can Do for Your Business

Nearly every software company has moved to include software-as-a-service as an option, if not the only option for accessing their products.

It’s easy to see why.  Recurring revenue provides greater predictability of cashflow, better usage data, and is easier to manage without huge professional services organizations.  Additionally, subscription-based businesses enjoy higher valuations than their enterprise-licensed counterparts—sometimes 5-7x.

But many organizations simply slap subscription pricing on their offering and then continue operating as they always had.

Here are some tips you can apply to truly justify a “forever transaction”, and reap the full range of benefits of subscription.

Start with your forever promise. 

Your forever promise is what your best customers wish you’d do for them to solve an ongoing problem or achieve an ongoing goal for them. What is it that you’re doing for your best customers, and how do you continue to deliver more fully on that promise every day?  The promise is like a north star that guides you in terms of future investment.

You make a forever promise to someone specific—a certain type of organization or even a certain type of employee within an organization.  This means that you have to know who that person is and what that organization looks like, so clearly that if you were sitting next to a “target best member” on an airplane, you’d

  1. quickly be able to recognize that they’d get tremendous value from your offering
  2. easily convince them to sign up
  3. have 100% confidence that they’d be thrilled with the value you provided, and become a loyal customer

Next, optimize your solution to deliver on this promise. 

You will need both the “headline benefits” that attract new customers, but also the engagement and retention benefits that will ensure that subscribers get all the value they’re paying for, so they will stay and make your offering a habit.  Consider the whole offering—not just the software, but the way you onboard new subscribers and the way you help them succeed.  Customer Success is very different from Customer Support. With Customer Success, the emphasis is on proactively ensuring your customers get the value they’re already paying for, not just solving problems as they arise.

In the Membership Economy, the moment of transaction is the starting line, not the finish line.  By investing in understanding the long-term goals of your subscribers, and optimizing your offering and support to help your subscribers achieve their goals, you will build disruption proof relationships and maximize lifetime customer value.

Robbie Kellman Baxter

Consultant: Author: Speaker



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