Subscription business enabler Zuora has announced a new analytics product line after completing its first-ever acquisition earlier this week.
In a pre-briefing ahead of his keynote at the company's Subscribed annual conference yesterday in San Francisco, CEO Tien Tzuo described the launch as "our second major product line" alongside its existing Z-Business subscription business management system.
We see Z-Insights as our next big product line, our next big revenue stream, the next big pillar of our strategy.
The new product, which will be offered in a limited pilot later this year, will build on expertise and technology obtained with the acquisition of 7-person customer usage analytics startup Frontleaf. Its founder and CEO Tom Krackeler now becomes Zuora's VP of subscription user experience.
In the digital era, the subscription business model inevitably involves collecting information about customer behavior over the lifetime of the service relationship. Increasingly, customers expect suppliers to use that information to enhance the service they deliver. This is where the intelligent analytics provided by Z-Insights come into play, Tzuo explained.
If I'm going to design a great subscription experience I need information. What are customers doing that is highly correlated with loyal customers, profitable customers, successful customers?
Your subscriber insights really becomes the basis of competitive success of your company going forward.
Marketing automation triggers
The product will have five modules initially:
- Identity, providing insights into aggregate demographics, spend and recurring revenue value of the subscriber base.
- Moments, a snapshot of what subscribers are doing at any given time.
- Segments, allowing providers to identify dynamic subsets of the subscriber population, for example to tailor marketing to specific groups
- Triggers, for use with sales and marketing automation systems to ensure timely engagement.
- Dashboard, offering insight into individual subscriber profiles and status.
Now you can figure out which prospects will become the strongest customers. Which customers will be the most receptive to new products, which customers are most at risk of churn? Take all of those insights and plug them into your marketing automation.
Frontleaf previously competed with Zuora partners Gainsight and Totango, both of which have much larger customer bases than the startup. Zuora says the new Z-Insights offering will target prospects in a way that will be "non-competitive" with those companies.
Zuora is strongest when serving companies with large volumes of subscribers, and Tzuo is not fazed by subscription billing and management products introduced by cloud business systems vendors NetSuite and, earlier this month, Intacct. While customers will always keep their financial information in these accounting systems, they will want Zuora's scale for the subscription element as that part of their business grows, he said.
Eventually if you want to be successful in the subscription economy your needs are going to far outpace that. When you're ready you can move over to us.
Customers featured at the Subscribed event yesterday illustrated the scale and range of subscription businesses that are taking advantage of connected digital technologies and smart devices.
- Schneider Electric is piloting the use of the subscription model in smart building technology.
- Arrow Electronics is taking a new subscription based approach to product design.
- Law enforcement product maker Taser is building a subscription business at its evidence.com website for storage of digital evidence.
Zuora also showcased at Subscribed its newly launched app marketplace, RBM Connect. This offers 57 applications from technology partners, system integrators and developers that work with Zuora's application.
Every enterprise software vendor these days seems to be bringing out some kind of analytics offering. In Zuora's case, it's chosen to acquire to add the capability more quickly.
Anyone with any history in the SaaS business will recognise the value of collecting and analyzing subscriber data. Now that pretty much every industry is opening up to a wave of digitally connected subscription businesses, it's no surprise to find that analytics has to become a core part of the subscriber management stack.
Disclosure: NetSuite is a diginomica premier partner. Intacct and NetSuite are recent consulting clients of the author.
Image credit: by Zuora.