June 4, 2014 | By Matt Rogers
Flew to San Francisco Monday night to take in Subscribed ’14, a conference put on by Zuora, a subscription service innovator with clients like HP, Dell, Inuit and more. In short, Zuora provides a platform for clients that allows them to seamlessly manage subscription billings and integrate with ERP and accounting systems. In long, Zuora is at the leading edge of a transition to a consumer experience increasingly focused on subscription and ongoing services en lieu of mundane, unique transactions.
Cases in point: Apple just bought Beats for $3 Billion, partly for its music subscription platform. Amazon has rolled out a Netflix-style entertainment system free to all of its Amazon Prime subscribers, who also get the benefit of easy product purchasing experiences and speedy 2-day delivery. Adobe flipped their entire business model from software sales to subscription sales, allowing customers to download any of the Creative Suite software modules they’d like and group users into teams easily manageable online, no small feat for a public company with a business model built prior to the Internet.
The transition to these “experiences” was the cornerstone of the keynote from Zuora founder and CEO Tien Tzuo this morning, that users have come to expect more than just a transaction. Hard to argue with that — the brand-less, generic commodity driven websites that dominated search rankings for so long are, at this point, completely dated. It’s simply too hard to rank organically for highly trafficked search terms, and if you want to sell on Amazon, well, you’re going to get Amazoned (forced to lower your prices until there is no margin left whatsoever).
Moral of the story: you better have an angle if you’re going to launch an online business. Creating a subscription service is a good start, but you better have a good brand and preferably an emotional angle. Take a client of ours: BoGo Brush. Get a toothbrush online through a quarterly subscription, they give one to someone in need. Plus, the brushes are cool looking and eco-friendly. Good stuff.
All in all, it’s become almost impossible to make money pushing toothbrushes that everyone else sells as well. Building a unique product, making it easy to buy through a subscription service, and creating an emotional connection will allow you to stay above the Amazon fray.