Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

by Tien Tzuo

Most companies (especially ones here in Silicon Valley) have a pretty good grasp of the first two stories. They know what they’re selling, and who’s buying. They have nice scrolling websites filled with all sorts of product features and client case studies. But lots of them are missing a foundational thesis. A bigger reason to exist. They don’t have a why (much less a why now). And that’s the story you should really be starting with.

So again, what should you do with that promotional budget? Use it to find a story.

If you have more than 70 percent of your subscribers in your basic package, then you may have a perfectly respectable entry-level service that will ultimately kill you. You haven’t built a growth path—most of those subscribers are probably happy to stay put. Ideally, if you offer bronze/silver/gold tiers, that 70 percent sits in the silver and gold categories. That means your subscribers are taking advantage of the capability-driven growth path, which also means they’re using your service consistently.

If you find yourself flat or sinking, that’s an all-hands-on-deck situation. Don’t panic, though. Everyone has to negotiate their own OS moment. But now’s the time to ask the hard questions: Are there customers you should not be pursuing (at least not right now)? Are there customers you should fire? What are the real features and usage patterns that really equate to customers finding ongoing value?

SMB (small to medium-size businesses)

Subscription cultures are about making sure your customer continues to succeed with your service over time, and translating that ongoing value into revenue.

What’s PADRE? Well, it’s our way of visualizing our company as an integrated organization composed of eight subsystems, all tied to the customer.

subscriptions are the only business model that is entirely based on the happiness of your customers.