Scaling Sales & Billing Operations In the Subscription Economy

Guillaume Vives SVP, Products, Zuora

In The Subscription Economy, Focus Is On Relationships

Product Relationships

BUY NOW SUBSCRIBE

Quo$ng   Ordering   Fulfillment/Shipping   Invoicing   Payment/

Collec$on   Accoun$ng  

The Quote to Cash Process in the Subscription Economy

Traditional one-time charge economy

What is different with the Subscription Economy?

Quote Order Subscription

Revenue event

Revenue event

Revenue event

Invoice Payment

Invoice Payment

Invoice Payment

Revenue Recognition Upsell

Upsell

Upsell

Order Order

Order

Provisioning

Quote to Cash to Accounting in the Subscription Economy

Quote Order Subscription

Revenue event

Revenue event

Revenue event

Invoice Payment

Invoice Payment

Invoice Payment

Revenue Recognition Upsell

Upsell

Upsell

Order Order

Order

Provisioning

Sales Ops (aka Front End)

Billing Ops & Revenue Ops (aka Back End)

Two Sides of the Same Coin

•  Quoting •  Ordering •  Sales Commission •  Subscription Management •  Provisioning •  Upsells

•  Invoicing •  Collection/Payment •  Churn Prevention •  Revenue Recognition

Subscription

Sales Operations

Billing & Revenue Operations

Two Sides of the Same Coin

•  Quoting •  Ordering •  Sales Commission •  Subscription Management •  Provisioning •  Upsells

Sales Operations

Sales Operations: The Fundamental Changes Your Sales Organization

Reducing cost of sales 1

2 Continuous Revenue Increase of Install Base

3 Optimizing Sales Team for Max Efficiency

Sales Operations: Sales Compensation

COO

How do you deal with churn or downsell?

What are your business objectives?

Market Capture?

ACV on bookings or collections is a good base for the compensation

plan.

Long-term success & comittment?

TCV, upsells, and renewals are good elements of a

compensation plan.

How do you pay your sales reps?

Dimensions Available:

ACV

TCV

Contracted Ramp

Upsell

Usage / Overage

Marketing Automation

Freemium Website

Big Data

Trend & Pattern of Usage

Provisioning

Entitlement

Online Sign-up & Account Mngmnt

CRM

CPQ

Sales Operations: Systems and Automation

Marke$ng     Usage  Analysis  

Provisioning  Quo$ng  automa$on  

Sales Operations: The Metrics That Matter

•  Cost of Sales Ops/Sales –  From 1/2 to 1/12

•  Operational Metrics –  Web visits to hand raise –  Hand raise to opportunity

(Freemium?) –  Qualified Freemium users –  Opportunity to close –  Upsell, Add-ons: MRR growth

per customer –  ACV; TCV; Contracted Ramp –  Down-sell and Churn

Awareness to Hand Raises

Hand Raise to Opportunity

Qualified

Closed

New Customers MRR Growth Via

Upsells & Add-Ons

Two Sides of the Same Coin

•  Quoting •  Ordering •  Sales Commission •  Subscription Management •  Provisioning •  Upsells

•  Invoicing •  Collection/Payment •  Churn Prevention •  Revenue Recognition

Subscription

Sales Operations

Billing & Revenue Operations

Two Sides of the Same Coin

•  Invoicing •  Collection/Payment •  Churn Prevention •  Revenue Recognition

Billing & Revenue Operations

Billing & Revenue Operations: Billing Organization

•  Billing processes •  Invoice complexity •  Payments

Scaling and Automation

This is a mindset change •  Churn prevention (with

Customer Care) •  Upsell opportunity (with Sales)

Build Customer Relationships

Understanding the subscription is critical to managing a complex Revenue Recognition process.

Managing a Complex Process

Billing & Revenue Operations: The Metrics That Matter

Revenue Recognition

Deferred revenue balance MRR Growth

DSO / Collections $ of Billing Operations

per $ of MRR

Time to Bill Churn Prevention

= Customer

Satisfaction

Sales & Billing Operations Need to Be Integrated/Automated to Be Successful

ü  Transactions growth ü Customer interactions ü  Sales channels

ü Cost of sales ü  Introductory price point ü Cost of operations

Lessons From Our Customers 1.  Consider putting Sales Ops and Billing Ops together

2.  Remember that Commerce is about relationships so interactions are important

3.  Commerce is multi-channel

4.  It needs to be designed as an end-to-end process around the subscription

5.  Without automation, there is no scale

The COO Perspective Meet The Panelists

DemandForce Andre Pimentel, VP Ops

Medrio Ray Letulle, COO

Motorola Elias Dayeh, Sr. Dir Ops

Box Dan Levin, COO

Zuora Guillaume Vives , SVP Product Management

@gyvives

Zendesk John McGuire, Controller

Panel – Share Your Input 1. Renewals – How do you do it today? Key

challenges? Lessons Learned?

2. Sales Ops and Billing Ops Collaboration – Key opportunities and challenges

3.  (Bonus) Sales compensation – What works best: model focused on market capture or long term revenue optimization

END