Zuora’s Subscribed Institute Welcomes Boston Consulting Group to the Think Tank
April 06 2021 - 8:00AM
Business Wire
New Research Partnership Focuses on Strategies
for Optimizing High Growth Subscriptions
Zuora, Inc., (NYSE:ZUO) the leading subscription management
platform provider, today announced its joint research with Boston
Consulting Group (BCG) in collaboration with the Subscribed
Institute, Zuora’s think tank for the Subscription Economy®. BCG
joins the Institute’s growing ecosystem of partners, academics, and
practitioners, focused on solving the challenges and unlocking
opportunities to help subscription companies succeed.
The newest research1 from BCG and the Subscribed Institute
suggests that 70-80% of the revenue of a successful subscription
business should come from existing customers to optimize growth.
However, many companies often fall short of monetizing those
relationships, according to the report, “How to Nail the “Land and
Expand” Model to Drive Subscription Growth.”
Co-author and pricing expert John Pineda, Partner and
Director at BCG said, “Freemium models are useful for customer
acquisition and expansion, but not for generating actual revenue
growth. Technology companies that focus on landing a bunch of new
accounts, without taking care of them will end up losing customers,
as well as the incredible growth they represent. Pricing to value
is key to improving core business profitability-- and the
subscription model makes it easy.”
The report explores the direct correlation between the “land and
expand” strategy and annual recurring revenue, by comparing
non-subscription to subscription-based technology companies.
Findings suggest that businesses with 70-80% of revenue coming from
existing customers can achieve:
- Nearly 2X Annual Recurring Revenue (ARR) Growth. When
compared to traditional Hardware and Software companies, enterprise
SaaS companies consistently focus on the expansion of revenue
across four critical dimensions: upselling, cross-selling, growing
volume, and capturing price increases.
- 30% Higher ARR. SaaS companies are stronger than
non-SaaS companies at escaping the “leaky bucket” trap with a
stronger investment in providing ongoing value to existing
customers.
- Bigger Upsell Opportunity. For SaaS companies, land,
expand, and retain performance improves with increase in ARR.
Companies with more than $100 million in ARR consistently
outperformed companies with less than $10 million in ARR in overall
growth (+14%), average net expansion (+12%), upsell revenue
expansion (+10%), new customer growth (+2%), and churn (3%
lower).
“As-a-service business models are the future of economic
growth,” said Amy Konary, Founder and Chair, the Subscribed
Institute at Zuora and former IDC analyst for digital business
models of nearly 20 years. “We’re thrilled to partner with BCG to
continue providing the world with the leading research and
expertise on subscription strategy and monetization.”
Download the report here for best practices to improve your
company’s Land and Expand approach in today’s Subscription Economy.
Pineda and Konary are also published by the World Economic
Forum.
For more information, contact the Subscribed Institute at:
https://www.subscribed.com/subscribed-institute
About Zuora, Inc.
Zuora provides the leading cloud-based subscription management
platform that functions as a system of record for subscription
businesses across all industries. Powering the Subscription
Economy®, the Zuora platform was architected specifically for
dynamic, recurring subscription business models and acts as an
intelligent subscription management hub that automates and
orchestrates the entire subscription order-to-revenue process
seamlessly across billing and revenue recognition. Zuora serves
more than 1,000 companies around the world, including Box, Ford,
Penske Media Corporation, Schneider Electric, Siemens, Xplornet,
and Zoom. Headquartered in Silicon Valley, Zuora also operates
offices around the world in the U.S., EMEA and APAC. To learn more
about the Zuora platform, please visit www.zuora.com.
© 2021 Zuora, Inc. All Rights Reserved. Zuora is a trademark or
registered trademark of Zuora, Inc. Third party trademarks
mentioned above are owned by their respective companies.
About Boston Consulting Group
Boston Consulting Group partners with leaders in business and
society to tackle their most important challenges and capture their
greatest opportunities. BCG was the pioneer in business strategy
when it was founded in 1963. Today, we help clients with total
transformation—inspiring complex change, enabling organizations to
grow, building competitive advantage, and driving bottom-line
impact.
To succeed, organizations must blend digital and human
capabilities. Our diverse, global teams bring deep industry and
functional expertise and a range of perspectives to spark change.
BCG delivers solutions through leading-edge management consulting
along with technology and design, corporate and digital
ventures—and business purpose. We work in a uniquely collaborative
model across the firm and throughout all levels of the client
organization, generating results that allow our clients to
thrive.
SOURCE: Zuora Financial
1How to Nail the “Land and Expand” Model to Drive Subscription
Growth, Boston Consulting Group (BCG)’s Value Science team and
Subscribed Institute, March 2021
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version on businesswire.com: https://www.businesswire.com/news/home/20210406005149/en/
Jayne Gonzalez press@zuora.com 408-348-1087
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