model, the consequences of under- priced goods and services are even more pronounced, as lost revenue compounds over time.

A good pricing strategy – coupled

with a solid packaging strategy (meaning what customers are buy- ing, when they receive it, and how they pay for it) for subscription sales – turns core products and services into customized offerings that evolve and expand to match customer needs and preferences. Shifting to pricing on a more atomic level creates greater flexibility, a larger target market for new cus- tomer acquisition, and more op- portunities for digital upsells and cross-sells. The ability to mix and match products/services into unique packages is key to deepening the customer relationship and maximiz- ing revenue. For example, consider the launch of a content streaming service from a sports network. The company has adopted a simplistic pricing model of unlimited access for a fixed monthly price of $7.00. This “all-you-can- stream” model works for an initial launch and quick customer acquisi- tion, but does not maximize sales over time. There are several ways to improve

on this plan, including: • Charge more for the basic service; increase the fee for the basic service by a few dollars.

• Offer less content or fewer ser- vices in the basic service.

• Upsell with team-specific content or playoff game packages.

• Sell add-on services such as special pay-per-view events and premium content like interviews with sports giants.

• Offer hybrid sales of digital and physical goods such as fan gear and sports memorabilia.

4. OPERATIONAL COMPLEXITY MAY SKYROCKET The subscription business paradox is that initiatives driving recurring revenue growth can become the very


things that diminish business per- formance as operational complexity grows. To capture upsells, cross-sells, one-time purchases, renewals, and even downgrades or pauses in service, the right technology, processes, and people must be in place to support it. For example, the organization may find it needs a customer success function to help combat churn. For sales teams this is important: A mere 1% increase in retention can have a significant positive impact.

5. CUSTOMERS WILL INTERACT WITH MANY DEPARTMENTS Unlike in static sales, customers engage with multiple “back office” systems and internal functions in a subscription model, including con- tracts, fulfillment, provisioning, bill- ing, service delivery, and payment. Today, successfully selling to and

fulfilling customer requests requires multiple systems, including CRM (customer relationship management), CPQ (configure, price, and quote), CLM (contract lifecycle manage- ment), ERP (enterprise resource management), billing, and payments. The very health of the customer relationship now depends on the performance of people and systems in functions across the company – and the way the front- and back-office functions collaborate has a direct impact on sales growth.


For sales teams, transforming these systems means now having enough data to allow them to create personal- ized marketing content and flexible, customized offers. This means the flexibility and appeal of product offers and the ease in which customers can make changes affects your top and bottom line.

7. SALES IS NOT AN ISLAND Sales cannot solve this problem alone – and neither can finance. Transform- ing the entire client experience to one suited for subscription sales requires agreement and cooperation between teams that may have barely interacted in the past.

The sales team is central to how businesses will understand and ex- ecute this massive change to effec- tively transform revenue models. But the transformation will succeed only if the plan is solid first and is executed across the business. As you can see, converting to or

adding in subscription model sales – while proven to grow revenues – comes with issues that need to be resolved. The sales team will need to be at the forefront of company-wide changes in order to make the transi- tion in a productive way. 

Jim Martindale is CEO of Navint. SELLING POWER JULY/AUGUST 2021 | 15 © 2021 SELLING POWER. CALL 1-800-752-7355 FOR REPRINT PERMISSION.

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