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Overthrowing the Product-centric Mindset in the Subscription Revolution // B2B Reimagined Podcast

In this episode of Zilliant’s B2B Reimagined Podcast, I had the pleasure of joining Barrett Thompson to discuss the exciting transformation happening in the industrial B2B world through the adoption of subscription models.

This was an exciting episode for me as we touched on many areas I haven’t covered in other conversations. Since the Zilliant audience is focused more on selling atoms (rather than bits) in industrial B2B markets, I got to discuss all the positives and pitfalls of transitioning to the subscription model.

We delved into why companies are embracing this shift, including the allure of higher valuations, more stable revenue streams, and a stronger customer focus. We explored the concept of customer lifetime value and how the subscription model helps build long-term customer relationships. From understanding the customer journey by identifying their “jobs to be done,” we explored how businesses can continuously deliver value and adapt their offerings in this new subscription-dominated world.

Key topics we covered in this episode:

  • Reasons for transitioning to a subscription model
  • Which businesses are good candidates for a subscription model
  • The mindset shift required to survive in a service-oriented world
  • Optimizing for customer lifetime value in a subscription model
  • Steps in transitioning to a subscription model
  • Importance of top-level executive buy-in
  • How to bring the channel along on this transformation journey
Zilliant B2B Reimagined – Ep 78 – Subscription Pricing Models on the Rise in B2B

Timestamped Outline

05:03 Subscription-model-business-fit.
11:18 Top executive mandate key for pricing changes.
14:02 Focus on customer’s needs and objectives.
18:55 Optimize customer lifetime value for long-term success.
21:35 Shift to service orientation for subscription success.

Potent Quotables

The Potential of Subscriptions for Your Business:

“The simple test is any business that believes they can deliver a stream of value over time is a candidate for subscriptions.”
— Dan Balcauski
The Benefits of a Subscription Model:

“I really like the subscription model because it fundamentally helps us align ourselves with our customers. It reinforces the customer relationship over time.”
— Dan Balcauski
The Shift to Everything as a Service:

“It’s really a focus and a shift from a product-centric world to a service-oriented world, which means your products are no longer the main focus of your company. Your subscribers are the focus.”
— Dan Balcauski
Subscription vs. Replenishment Model:

“There’s a committed revenue stream that you can count on in the subscription model up until the renewal date. There’s definitely not one in the replenishment model; your buyer could stop buying from you any week that they choose.”
— Barrett Thompson

The Importance of Optimizing for Customer Lifetime Value:

“Optimizing for customer lifetime value becomes paramount, moving customers into the right offering for where they are today on the initial sale.”
— Dan Balcauski
Revenue Operations Systems:

“Being late to the game does have some advantages, meaning that there is a lot of work that has been done on the tech stack to actually support this set of revenue operations that having a subscription or pay-as-you-go model requires.”
— Dan Balcauski

Want more B2B SaaS pricing and packaging insights? Follow Dan on LinkedIn and Twitter.