4 key trends that fuel recurring revenue adoption

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©2016 Aria Systems Inc. All rights reserved. Key Trends that Fuel Recurring Revenue Adoption

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Page 1: 4 Key Trends that Fuel Recurring Revenue Adoption

©2016 Aria Systems Inc. All rights reserved.

Key Trends that Fuel Recurring Revenue Adoption

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Page 2: 4 Key Trends that Fuel Recurring Revenue Adoption

©2016 Aria Systems Inc. All rights reserved.

Companies are moving to recurring revenue with increasing adoption and implementation of subscription and usage-based billing options.

These models enable businesses to enter new markets, defeat competitors, and get a lifetime of value from existing customers.

According to Forrester Research*, companies are eager to move to recurring revenue because of four key trends:

THE MOVE TO RECURRING REVENUE

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47%of US businesses have adopted recurring revenue. (Incyte, 2014)

* The Forrester Wave: Subscription Billing Platforms, Q4 2015

Page 3: 4 Key Trends that Fuel Recurring Revenue Adoption

©2016 Aria Systems Inc. All rights reserved.

Acquiring new customers is significantly more expensive than retaining current ones. Satisfied customers become loyal and, in turn, generate incremental recurring revenue for the company.

Recurring revenue models allow you to focus on retaining satisfied customers, rather than acquiring new ones over and over.

THE AGE OF THE CUSTOMER1

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“There is an inherent flexibility, and an additional emphasis on loyalty, above and beyond that of a traditional one-time purchase.”

Forrester Research, 2015* The Forrester Wave: Subscription Billing Platforms, Q4 2015

Page 4: 4 Key Trends that Fuel Recurring Revenue Adoption

©2016 Aria Systems Inc. All rights reserved.

You need to know your customers very well to develop a satisfying, long-term recurring payment relationship.

Data analysis from multiple transactions gives insight to customer preferences and usage patterns so you can adjust pricing, packaging, and incentives.

THE NEED FOR CUSTOMER INSIGHTS2

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“Insights show you how customers consume your service.” - Brendan O’Brien, Co-founder, Aria Systems

Page 5: 4 Key Trends that Fuel Recurring Revenue Adoption

5©2016 Aria Systems Inc. All rights reserved.

Business is shifting to the cloud, transforming virtually all industries from automotive to industrial to healthcare.

Companies that offer cloud-based services generate significant incremental revenues because they bill by subscription over time.

THE MOVE TO THE CLOUD3

the expected revenue of cloud vendors by 2026. Statista, 2015

$493B

Page 6: 4 Key Trends that Fuel Recurring Revenue Adoption

6©2016 Aria Systems Inc. All rights reserved.

As sensors and smart chips become more affordable, companies are seizing the opportunity to connect devices in compelling ways.

IoT vendors are expected to top $309B in direct revenue by 2020, with most of that money deriving from subscription or recurring services.

THE AVAILABILITY OF CONNECTED PRODUCTS4

connected ‘things’ will be in use in 2016.Gartner, 2015

6.4B

Page 7: 4 Key Trends that Fuel Recurring Revenue Adoption

7©2016 Aria Systems Inc. All rights reserved.

The growing number of companies pursuing recurring revenue initiatives fosters an increased need to quickly measure and analyze available data to keep customers satisfied and coming back.

For more on running a successful recurring revenue business, visit www.ariasystems.com.

STRIVE FOR RECURRING REVENUE SUCCESS

“Wall Street rewards recurring revenue businesses with a richer valuation.”- Tom Dibble, CEO, Aria Systems