Subscribed 2016: The Enterprise Shift - From a Perpetual to a Subscription Business

The Enterprise ShiftFrom a perpetual to a subscription business

Dr. Ulrich HermannRegional Managing Director & CEO of Wolters Kluwer Central Europe

The Enterprise Shift

Dr. Ulrich HermannCEO Wolters Kluwer GermanyRegional MD Wolters Kluwer Central Europe

From a perpetual to a subscription business

presentationagenda

page02

About us Business challenges –

what drove our transformation

The 6 keys to shifting to a subscription

model

presentationagenda

page03

Building a subscription

culture

Q & AKey takeaways

welcomemessage

page04

“When I started ten years ago at Wolters Kluwer in Germany, we were a traditional legal publisher, with 90% of our business as print. What we were selling was product based: the value of our content.As of 2015, 83% of Wolters Kluwer global revenue was made up from digital solutions and services.”Dr. Ulrich HermannCEO Wolters Kluwer Germany Regional MD Wolters Kluwer Central Europe

aboutus

page05

keyfigures

page06

Today a market-leadingglobal information services company

1836Founded in the Netherlands

With19,000 employees

Serving customers in180 countriesRevenues in 2015€4,208 million

Professionals in the legal, business, tax, accounting, finance, audit, risk, compliance and healthcare markets

Providing information, software, and services that deliver vital insights, tools, and the guidance of subject-matter experts

ourmission

page07

“Wolters Kluwer’s mission is to empower our customers with the information, technology, and services they need to confidently make and follow through on critical decisions. ”

• High disruptive potential

• Internal and external value

Data analytics

• Customer workflow

• Tremendous upside potential

Online software + services

ourtransformation

page08

Print publishing

• Legacy business• Transitioning to

online

Expert content Transaction/usage data

In 2015, 83% of Wolters Kluwer global revenue was made up from Digital Solutions & Services.

100

25

0

50

75

35

52

13

2003

70

17

13

2015

Revenues by media (%)

DigitalPrintServices

100

25

0

50

75

44

56

2003

22

78

2015

Revenues by type (%)

RecurringCyclical

Source: Wolters Kluwer Annual Report

So, how did we get from thereto here?

“Becoming a digital business is not just layering a digital layer upon an existing business - we need to switch from a product-focused company to a customer-focused company. It’s about our values and beliefs.”

Business challenges

page013

We live and compete in a VUCA world

page014

VolatileThe nature, speed, volume, & magnitude of change

UncertainThe unpredictability of issues & events

ComplexThe number & interactions of changing external factorsAmbiguousThe haziness of reality & the mixed meanings of conditions

the fundamentalchallenge

page015

How do I maximize the performance of my business today?How do I prepare

my business for a different future?

How do I do both?

6 keys to shifting to a subscription business

keys totransformation

page017

01

Assess your current business model 0

4Identify your “way in” to subscriptions while balancing performance and learning0

2Look at your customers 0

503

Understand roadblocks to transformation

06

Building a subscription culturePull customers (don’t push)

01

Assess your current business model

oldbusiness model

page019

Our business was about

producing and selling

a good product on marginal

cost…1980’

s

Marketing & Sales: • Promotion of single

products with direct mail, retail marketing, advertisement

• Sales via retail’s “bookshelf”

• Direct marketing & sales of subscription

Value of a Single Product:

• Renowned authors• High quality content• Index + taxonomy

In a product centric business, we sold content

to the print-customer’s

shelf…

corequestions

page021

What are you really providing?

How are you offering value?

What are your customers paying for?

? ? ?

02Look at your customers

Personal Real-Time

Customers have new expectations

Immediatefulfillment

Ongoing Value

Memorable Services

Technology trends changed customer requirements

Increased pressure on customer productivity

More players compete for market share

03Pull

customers (don’t push)

the transformationbegins

page026

Our value proposition

changed from “Content Source”

to “User Experience”

2010’s

value creation: controlling content source vs. enabling experiences

page027

Enabling a unique experience• Technology• Intuitive workflow• Ecosystem• Relevance• Productivity

• Access to author-driven content

• Opinion leadership• Community membership• Brand

Controlling content source

REQUIREMENT: RADICAL INNOVATION

product-driven vscustomer lifecycle-driven

page028

Product-drivenPrint media

Digital media

Customer workflow

Solutions

Customer workflow

Customer lifecycle-driven

Content: local integratedCompetence: search/understand serve/solveEditorial: domains tasksFormats: media solutionsValue: availability productivity

customer experiencejourney

page029

SEO/SEM/SEA/Social media

▪ Customer journeys

▪ Topic-related education centers

▪ Quality content

Ease of use

▪ My Document library

▪ Quality contents / newsletters

▪ Reminders in case of legal changes etc.

Comprehensive functionality & quality content

+ • NEED GENERATION

+ • INITIAL CONSIDERATION

+ • ENGAGEMENT

+ • EVALUATION

+ • MOMENT OF PURCHASE

+ • DELIVERY / INSTALLATION

+ • USAGE

Loyalty

curve

pulling customers vs.pushing the offer

page030

Old

New

product

customer

1 year subscription (Jan.-December)

or one-time purchase

by piece/license

offeringfeatures

Customer hunting across channels

internet searchusage

Free Register

Voucher

1-2 month trial

subscription per month subscription per quarter subscription per year

let customer promote vs. the company explain

page031

Detractors

Neutrals Promoters

NET PROMOTER SCORE (NPS)

Strategic change

Action 1:1

UnderstandMeasure

EXPLAIN GET INSIGHT

Product Usage

04Identify your way in to a subscription businesswhile balancing performance and learning

page033

Performance organization• Internally oriented• Focused on making the

numbers• Rewards consistency• Dislike of ambiguity &

deviations• Rule and procedure oriented

Learning organization• Externally focused• Inquisitive• Experimental & innovative• Fluidly shares information• Rewards risk-taking• Relies on cross-functional

teams

balancing learningand performance

performance organizationto avoid cost of failure

page034

key behaviors to

maximize return on invested

resources

Focus• Focus on near-term performance & large

business units

Protect• new ventures coinciding

with economic cycles, management interest, &

budgeting

Minimize• Small up front investments• Business focused on

standards

Avoid• Failure regarded as career-

ending event • Incentive system to avoid risk

taking behaviour

Work with agile concepts in marketing and product development to avoid late and expensive failures and constantly pivot the business model and solution.

learning organisationto manage risk of failure

page036

• (re)define the problem

• (re)identify your customer

• test and iterate on business assumptions, feature requirements, marketing & sales tactics

• market research• usage analysis

Product Management • Measure product

use• Elaborate features &

user experience• release new &

different functionality as quickly as possible

• assure reasonable product quality

Product Development

improve and innovatea digital solution in an agile way

page037

Based on minimal viable product (MVP), steering committees, etc. focus on:

efficiency (management resources)

and

effectiveness (CPA’s & CLVs)as they relate to the agile process

Management Focusinitial planning

plan

evaluate

test

implementation

analysis & design

requirements

Deployment Minimum Viable Product

customer feedback

Source: Steve Blank ,Why the lean start up changes everything, Mai 2013, Harvard Business Review

05Understand roadblocks to transformation

engagedifferent stakeholders

page039

championMakes it happen

antagonistKeeps it from happening

indifferentLets it happen

supporterHelps it happen

+++

0

-

Assess initial stakeholder support

stakeholderengagement

page040

01Communicate

a clear vision

02Identify and analyze

key stakeholders

03Engage

stakeholders

organizational obstacles

page041

The establishment can be the enemy of change

The organization itself

Need for a new business model

Finance

Start with customer pain points

Product development

Develop business from your core capabilities

Back-office IT

Sell and market around customer workflow

Sales & marketing Customer experience over

domain expertise

Experts

06

Building a subscription culture

“Building a business model around the customer experience requires

organizational transformation. It means building a subscription

culture.”

guiding customers through the right

channels…

training and coaching every

employee in Customer Lifecycle Management (CLM) related workflows…

What it takes to build a subscription

culture…

Aligning marketing, sales and service

around the customer

experience…

streamlining the customer

experience across all touch points…

enabling systems to automate multiple subscription based business models…

guiding behaviourwith company values

page045

Focus on customer success

Aim high and deliver

Make it better

Win as a team

Lessons learned?

customers stay with us when we…

page047

1 understand what customer success is about…

3 are fully dedicated to improve and innovate our digital solution in an agile way…

2 serve our core disciplines seamlessly in one digital solution…

4 and deliver in the moment of need and surprise.

thank you.

Check out Zuora Academy for more great info and actionable advice.

All the info you need to build and run an amazing subscription business.

https://www.zuora.com/academy/