The buying profile for business customers and consumers has changed forever. Companies that recognize and accommodate the new 21st century buyer will realize market-changing growth, regardless of industry. Those that don’t will become dinosaurs, extinct.
What does this new customer expect? Two words: immediate gratification.
Today’s business buyers and consumers want it all, and they have the power to demand it. Specifically, today’s buyers want to:
- Try new products and services before they buy them;
- Pay as they receive value without paying upfront;
- Access self-service capabilities anytime, anywhere, from any kind of device; and
- Change their service and account information whenever they want.
Businesses that thrive in this new on-demand, Internet-powered buying environment have successfully shifted to new customer care and billing approaches that align to their customers’ expectations. The recurring revenue model is designed specifically to fit the profile of current buyers and enhance the bottom line. It’s proved to be a flexible, easy to automate and profitable.
While we are still at the beginning stages of this market shift, businesses have already begun segment pricing, focusing on the intersection of convenience, perceived value and personalization.
To better illustrate this aspect of the buyer profile, let’s look at how milk is priced.
- Big box store – $1.89
- Convenience store – $2.89
- High-end grocer – $4.29
What a consumer pays for milk depends on their motivation in terms of convenience, personalization and perceived value. The shopper who goes to the big box store clearly seeks quality and value. The convenience store buyer probably discovered there’s no milk for junior’s breakfast at 11 p.m. and is willing to pay for convenience and go to the corner store. Now, someone seeking a special kind of milk will go to a high-end grocer and pay even more.
Businesses creating a monetization strategy are ever-mindful of positively impacting and benefiting their customers. A recurring revenue model usually enables customers to pay a lower price for a product or service when the service is delivered without upfront costs. Customers can discontinue the service when they no longer feel the value equation is right, incenting businesses to keep service levels as high as possible. It’s a win-win for company and their customers.
Most businesses are just beginning to understand the realities of this new breed of customer who expects services on-demand and how it impacts packaging and pricing their products and services. For an excellent overview of subscription billing and its key drivers download a complimentary copy of “Subscription Billing for Dummies,” a special edition e-book about navigating the many aspects of rethinking your business and billing strategy.
Let us know how you’re delighting on-demand customers at your company and how your monetization strategy benefits them.