The Subscription Economy Is About Strengthening Customer Relationships, Not Just Recurring Revenues

The other perspective from Tien Tzou, It’s not about subscriptions versus pay-per-use. Just as industries have different needs, businesses and customers are different and so have varying needs.

TechCrunch

Editor’s note:Tien Tzuo is the CEO of Zuora, a subscription billing company. Follow him on Twitter @tientzuo.

TechCrunch recently ran a post by Ray Sobol, founder and CEO of EvidencePix, called It Might Be Time To Ditch The SaaS Monthly Subscription Model. In it he argues that a pure pay-as-you-go approach is better than a monthly subscription model because customers only pay for what they use.

But Sobol is missing the point. One hole in his argument is that it undervalues the importance of predictability for customers. For instance, in the mobile phone world, many consumers like unlimited voice or data plans, because they don’t want to feel like they are constantly “on the clock.” In addition, he seems to be advocating for a reduction of options for customers. In the same mobile phone world, customers enjoy a buffet-style approach to pricing: prepaid, monthly usage buckets + overage…

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