Customers in the Cloud
Global enterprises in every industry are increasingly turning to cloud-based innovators like Salesforce, ServiceNow, WorkDay and Aria, to handle critical systems like billing, IT services, HCM and CRM. One need look no further than Salesforce’s and Amazon’s most recent earnings report, to see this indeed is not a passing fad, but the early days of a transformational shift in the way Enterprises (large and small) purchase technology services. Enterprises are capitalizing on cloud infrastructure in creative ways, rapidly enabling offerings like Adobe Creative Cloud, Audi On-Demand car sharing service, and a myriad of Internet of Things (IoT) initiatives across verticals that are debuting on the market.
The Cloud as an Enabler of Growth
Companies have handled non-essential operations in the cloud for a while now, allowing them to focus on their enhancing their core capabilities. Increasingly, organizations are utilizing cloud solutions to handle mission critical components as well. Cloud billing has flourished in recent years and is surprising a lot of people with its ability to disrupt traditional transactional business models. Once considered mundane, cloud billing is now an enabler of more predictable recurring revenue and customer success.
Outdated legacy systems that were built for longer production cycles and static market dynamics simply aren’t cutting it anymore. The cloud-based enterprise billing system is in a unique position to accelerate customer success with technology that speeds time-to-revenue of desired products and services, and subsequently allows rapid iteration of those offerings once launched. This process of innovative iteration is a true win-win in that it increases customer satisfaction, and ultimately customer lifetime value, and thus a company’s recurring revenue.
Modern, agile cloud billing systems are the new enablers. This has spawned an enormous market opportunity—recent estimates put the cloud billing market at $5.5 billion according to MGI Research. And the IoT market, projected by IDC to reach $7.1 trillion in 2020, will only increase recurring revenue numbers by the very nature of how IoT services are consumed per use or over time.
Back Office Goes Front Office
One of the primary values of recurring revenue initiatives is its inherent ability to grow customer satisfaction, as the majority of revenue happens post-sale. The goal is simple: keep the customer happy and retain/expand the relationship. Cloud billing has made its way to the front office, providing a strategic lever to impact customer lifetime value.
Analysts such as THINKstrategies have made the correlation between agile billing that powers predictable revenue streams and customer satisfaction, pointing to a shift in the way back-end finance systems can impact customer satisfaction initiatives. Agile cloud billing platforms provide a better overall customer experience by offering the ability to quickly iterate on offers and promotions in response to customers’ changing wants and needs. Designed with APIs and integration frameworks, they can also provide a unified customer view with the ability to serve upsells and cross-sells throughout the customer lifetime. The single customer view also enables a plethora of features like built-in provisioning, account management, promotions, self-service, customer support (today’s customers really don’t like dealing with call centers, and most companies really don’t like the exorbitant costs of staffing them). The result is increased efficiency and customer satisfaction.
Targeting Customer Centricity
As we focus on turning one-time customers into longtime champions, business success depends more and more on creating an exemplary customer experience. Many enterprises are looking to reshape themselves like agile startups—requiring more from their legacy systems that are too rigid and expensive to modify in order to satisfy the needs of an ever-changing on-demand market. Simply put, today’s Enterprises have lost patience with the inability of legacy systems to support their need for speed and agility, attributes without which they cannot effectively compete in the disruptive markets that surround us all.
The wave of enterprises turning to cloud-based innovators for a competitive advantage will continue to swell. Leaders will take advantage of these technologies to satisfy their customers, which in turn will maximize customer lifetime value and increase recurring revenue. Conversely, followers are likely to find themselves lost in the clouds.
By Tom Dibble