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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.
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/