In the only podcast dedicated to the ‘Subscription Economy’, hosts Tom Krackeler and Rachel English talk to innovators, entrepreneurs, and analysts about the business shift towards recurring revenue.
Guest: Anne Janzer, author of the book Subscription Marketing: Strategies for Nurturing Customer in a World of Churn. Anne is an experienced content marketing consultant and has worked with over a hundred technology businesses, from industry giants to innovative start-ups, helping them articulate positioning and messaging in crowded markets.
Tom Krackeler: Anne, welcome. Let’s start with what motivated you to write a book on subscription marketing? There are thousands of books on every aspect of marketing, but you take a different angle…
Anne Janzer: I feel like I’m an unlikely evangelist for subscription marketing. I wrote the book because nobody was talking about it. I felt that I needed to explore the impact of the subscription economy on the practice of marketing. When the revenues shift certainly something needs to shift in the marketing strategy. But nothing was changing. I was working in the software industry, which as you know was one of the first to be really, seriously affected by the subscription economy when everything moved to the cloud, and yet people were still basically hiring me to do lead generation, lead nurturing, thought leadership, front of the funnel things, and I didn’t see that marketing practices were shifting to account for the growing mass of revenue that was taking place after the sale.
Tom Krackeler: Yeah, there’s nothing wrong with any of those top of the funnel things, but it’s just so incomplete. Nowadays 80% of the revenue you’re going to get is probably after the first renewal from a customer. So, it’s like, let’s take a step back and broaden the vision of what impact marketing can have.
Rachel English: In the book, you focus a lot on what you call value nurturing – are you talking about customer lifetime value?
Anne Janzer: What you’re really trying to nurture is the customer’s experience or value of being a customer. In a subscription business, the customer has to decide that the value of being a customer outweighs the cost of renewing. That’s the constant decision that customers address time and time again. So the entire company needs to keep tossing more weights into that value bucket so that renewal is always the easy decision to make.
Rachel English: You talk about some great ways to do that. What are some examples of how you can help nurture that value for your customers?
Anne Janzer: In the book I dissected it into five different ways, and they don’t always live traditionally within the realm of marketing organizations. 1) Helping your customers find success 2) Reminding them of the success they’re having 3)Adding value beyond your solution itself, in content or in a community experience of being a customer 4) Adding value to the relationship. There are businesses that you do business with because you want to do business with that organization 5)Aligning with your customers’ values. This is the tricky segment of values based marketing. If I’m doing business with a company and believe in what they’re doing, that really strengthens the experience for me as a customer. Eventually, all of these versions of value contribute to each other.
Rachel English: I’m always beating that drum, that the core value to focus on, is the value that you bring your customers, not that they bring you. If we’re focused on creating value for our customers, they’ll create value for us.
Anne, what are some of the things you think are going really well, in the subscription economy? Who’s doing a great job, showing this value, nurturing customers and retaining them? Do you have examples of companies or campaigns that have worked well?
Anne Janzer:There is not right way to do it, it depends on your business and subscribers. The other thing that’s fun, and that I thought was really interesting is that if you’re a B2B you could learn from a consumer subscription box, or a consumer retail organization. It doesn’t matter. We’re more alike in terms of subscriptions and managing and trusting relationships with customers, than we are different based on our markets.
Given that, there’s a few different examples of stories, I think are really interesting. Here’s one that I met at last years Subscribed conference – a little company called Pley. The short hand for them is Netflix for Legos. Best idea ever. Love it.
They’ve done a really interesting thing with community. You subscribe, they send you a Lego kit. Your kid puts it together or you put it together. Send it back and get another one.
They’ve created this site called Pley world, which is an online community. You can make your own Lego creations and submit them to Pley world. Other community members vote on them, and the one’s who get the most votes then can become part of the subscription service. Now, you’ve created this really interesting community, that’s really anchored around your business, right, but it’s really all about what you’re enabling your customers to do. They get to share with each other, to vote on each other. Also, the company is learning from it’s customers and it expands its service based on what they do. I think it’s brilliant to build community around being a customer. Say you’re a parent, whose child has the winning design. You are a really loyal customer, and your kids gonna tell friends about it. It works for you, and it works for your customers.
In terms of aligning with values, there’s always the usual suspects – Patagonia and Toms Shoes. They’re not subscriptions, but they’re things people return and buy again and again, because they see themselves.The Dove ‘Real Beauty’ campaign, is another example of values based marketing. They’re not selling soap, they’re selling women’s perception of themselves, which is a really interesting campaign.
Rachel English: Anne, you’re a very seasoned marketer. As you’ve seen this change in business model necessitate a change in marketing, do you see it creating an overlap with customer success or with other teams?
Anne Janzer: That’s a critical question because the silos don’t work anymore in a subscription based business. I think marketing and customer success really need to be best friends, in this world. They help each other in really significant ways. How do you do customer success at scale? How do you deliver low touch happiness, to a large base of customers? You do it with marketing practices. Conversely, the customer success team understands what value people really find in a solution, and who the most loyal customer are. They can inform a different set of marketing personas that you might not otherwise know about. I think that marketing needs to work closely with customer success, as well as other parts of the organization.
Tom Krackeler: Anne, I’ve heard that you are working on a second book. Can you tell us a little bit about it?
Anne Janzer: Most of my career has been spent writing. What I wanted to do in this book is explore the process of writing with a cognitive science filter. So, taking what we know from cognitive science, and then also what we know from the practices of successful authors and writers – What can we figure out to make the process of writing both more productive and to have fun doing it. The one writing tool that everyone begins with is the human brain. It talks a little bit about attention and flow, and mindset, and self-discipline. Then, it looks at pulling apart the pieces of the writing process, so you can figure out which mental processes you need to bring to each. The book’s coming out in early July.
For more on the book and all things related to subscription marketing, check out Anne Janzer’s website.