Question
The shift from traditional business models to subscription services presents several challenges to existing IT systems and practices. Traditional IT systems are typically designed around stock keeping units, not subscribers. In a subscription model, the system needs to identify and track subscribers to monetize customer relationships over time. It needs to conduct rapid price testing for new offerings, facilitate easy sign-up, upgrade, and renewal processes for customers, handle sales to both individuals and large enterprises, cope with high-volume recurring payments, and measure recurring revenue. These requirements can pose significant challenges to traditional IT systems and practices.
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The IT systems of most traditional businesses are focused on stock keeping units, not on subscribers. In a subscription company the system has to be able to tell you who your subscribers are, so that you can monetize customer relationships over time. It has to be able to conduct rapid price testing when trying to gauge the appetite for a new offering. It has to be easy for customers to sign up, upgrade, and renew. It has to be able to handle sales to both individuals and large enterprises; and be able to cope with high-volume recurring payments. And, it has to be able to measure recurring revenue.
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