In a recent conversation with a chief technology officer, he asserted all digital technology changes in his organisation were being led by IT and not by marketing. It made me wonder: How long a marketing function like this could survive?
The past decade has seen an explosion of subscription-based business models such as Salesforce.com, Netflix and Spotify, and their popularity is proof customers are renting over purchasing more than ever before.
But scaling a subscription-based services is not without its challenges, as Australian aerial mapping group, Nearmap, found when it wanted to expand its market share into the US.
“Our customers are typically businesses, governments and professionals, and we provide location content by way of high resolution imagery of usually populated locations, that we can then use to create other rich content like elevation models or estimation of volume,” Nearmap’s VP of marketing, James Rabey, told CMO. “This is useful for when you are planning a construction, development or inspecting the progress of a project, or even auditing to see if something is being installed. And you don’t need to travel out there – we allow you to do that.”
Traditionally, aerial imagery was mainly accessible to large companies and government organisations, who had the budget to send a plane to a particular location and process the images. But according to Rabey, Nearmap’s subscription-based model makes the service more accessible to a wider range of customers.
“What we did, and why subscription is central to our business model, is that we have the technology to be able to capture the high resolution image quickly, but also process it to make it available online,” he said. “We can then make it available to anyone that required that particular image. So we can get a far greater ROI on what we do, than if we go down the traditional model.”
A scalable solution for a fast-growing company
The seven-year-old company currently trades at about $30 million annual revenue, but with 14,000 subscribers on-board and growing rapidly, Nearmap needed a more scalable, visible solution, especially given the complexities of recurring billing.
And with a long-term vision to be the world’s leading provider of location content, they also wanted a solution that supported growing international market might.
“Like any typical startup, we started simple and used a payment gateway, and then integrated with Salesforce,” Rabey said. “But we needed to offer one of the largest economies in the world an optimised customer experience, where customers start interacting from the moment of trial, right through to their customer journey with us. We needed to have the right systems in place, in order to provide that consistent journey.
"About 18 months ago, we realised we needed to mature the systems and processes in order to make that move up to a more mature, sustainable model.”
Nearmap chose Zuora for its scalable solution that could also support complex billing and tax requirements of the US market, eliminating any barriers to growth.
"We also found Zuora’s solution worked really well with existing platforms we were using like Salesforce,” he said.
Fostering better customer relationships
Nearmap implemented Zuora in July last year and has already seen visible benefits in enhancing the customer experience and fostering better relationships.
“We’re able to turn on a new customer now within hours, whereas it might have taken days before,” Rabey claimed. “We’ve actually reduced the provision time. And it’s critical because we can start the customer relationship on the right foot.
"And while it’s early days to quantify all the benefits, what we can already see is increased visibility and the ability to build better on-boarding and nurturing programs, as well as being able to understand in real-time what the customers are doing around their subscription. That way we know how to manage and automate their subscription to optimise their customer satisfaction and experience.”
But like any integration of new technology, the change presented its set of challenges, which the company effectively mitigated and managed, Rabey said.
“For us, we made the move in a fairly risk-mitigated way. The US was new business for us, so we used the US as a trial for implementing Zuora, and we were agile enough to be able to fine-tune things as we were going along. We could then apply those learnings to the migration of our existing Australian customers," he said.
Why it's all about customer loyalty
Moving forward, the pressure is on subscription-based businesses to maintain customer loyalty, which means more than to simply focus on data and analytics.
“Loyalty to your brand can’t be taken for granted anymore and customers are really renting your service, rather than purchasing it,” Rabey explained. “And in order to maintain loyalty, you need to manage a consistent dialogue, so you can respond and anticipate their changing needs.
“You also need to first ensure you have clear, agreed objectives when you’re bringing in new technology, and that the new tech platform meets your requirements, while offering the agility to change and adapt to your customer’s needs.”