Recurring Revenue is Ready To Erupt – The Alliance is Here to Help

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Don’t know if you caught the recent announcement, but Aria Systems has signed on as a founding member of the newly formed Recurring Revenue Alliance. Recurring revenue management provider ServiceSource, with whom we recently joined in a strategic partnership, is the founding member.

In addition to Aria, other first-round members include BigMachines, Centrify, GoodData, MuleSoft, Okta, Pactera, Salesforce.com and Xactly.

The Alliance’s mission is to help participating members increase revenue through the creation and automation of best practices and, as a result, increase customer satisfaction and retention.

Recurring revenue is playing a bigger role in the sales and profits of businesses everywhere, and the model is no longer limited to a few business categories such as digital entertainment or utility bills. It has become a key sales driver of all sorts of businesses, from the sale of software by Adobe to diapers and baby formula from Target. In fact, some experts believe that the recurring revenue economy is worth as much as $300 billion. Although we suspect the numbers are much bigger.

But with that said there’s still lots of work to be done, as far as helping businesses achieve their full potential using recurring revenue models.

ServiceSource estimates that $30 billion in renewal opportunities are left on the table every year due to a number of factors, including poor data, ineffective tools and processes, and lack of customer coverage. We see this as well. Companies have been trying to, in effect, build bridges with the IT equivalent of pickaxes and shovels.  

Recurring revenue initiatives and businesses are changing the commerce game, which is why the Alliance is so important.

Previously, the customer relationship ended when the customer paid for their items at the cash register and walked out the front door. If you walked into a store, you were a customer up until you completed your transaction, unless you returned to make additional purchases. The relationship was really just a series of transactions.

Under the recurring revenue model, each business has a permanent relationship with each customer, one that is critical to the current and future health of the business. Consider your iTunes account.  Regardless of how many purchases you make a year, you and Apple have a relationship.  

All businesses these days are asking how to get more out of this relationship. Essentially “getting more” comes in two flavors: how to sell customers more stuff and how to keep customers happy and engaged so they renew their contract next week/month/year.   

The Alliance will certainly help answer some of these questions, as well as bring together companies with the pieces of the IT strategies puzzle needed to power these new business models.

Plus, solving the recurring revenue management puzzle often requires several products working together in harmony. It’s not a “one company” solution.

Thus, the Alliance is luring some of the best-of-class players under one umbrella to talk about such technical challenges as interoperability, and develop the definitions for problems that need to be solved.

We hope this organization will become the focal point where information, as well as support, can be found.

I like to compare the general lack of awareness about the recurring revenue economy to that very active volcano that scientists have recently discovered smoldering under the West Antarctic Ice Sheet. Have you read about it? Who knew there was this volcano under a mile and a half of ice? But it’s there!

Recurring revenue is like a powerful volcano that’s been hidden for too long.

The Alliance will help bring this powerful business model to light, and help harness the force of that hidden volcano.

Jon Gettinger, Sr. Vice President, Marketing, Aria Systems

 Looking for Recurring Revenue insight? Check out more from the Recurring Revenue Alliance HERE and HERE!

The Right Recurring Revenue Model for Success

To understand the differences between cloud services versus managed software and the implications for choosing either platform, consider downloading the recently released ePaper The Recurring Revenue Dilemma: Cloud Services vs. Managed Software.

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About the Author

Jon Gettinger
Jon, Senior Vice President of Marketing at Aria, has over twenty years experience working in the software industry with more than a decade in executive roles. He has been involved with the SaaS business since the very beginning when in 1998 he founded a company that delivered SaaS testing solutions for web businesses. Most recently, he was the head of marketing at Fortify Software prior to their acquisition by Hewlett Packard. He believes in the transformative power of IT, the genius of molecular gastronomists, and in the mysterious force that is the Rule of Three.

The Forrester Wave: Subscription Billing Platforms, Q4 2015

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