Every time I talk to one of our customers, I’m impressed with how they’re using Salesforce to drive incredible transformation, innovation, and creativity. I’ve been especially excited by companies that choose to adopt a recurring business model, such as subscriptions or usage-based pricing, to unlock new ways to monetize their products and expand into new markets or segments. For these companies, customer value and success has to be the focus.
Regardless of industry or company size, transitioning to a recurring business model is a big change for any organization. Not only do customer relationships need to be approached with a recurring mindset, but quote-to-payment systems also need to be flexible enough to accommodate contract renewals or amendments — such as add-ons, swaps, or upgrades. Salesforce is taking a step towards making those changes easier by extending Salesforce CPQ with Salesforce Billing, a new offering that helps companies launch and manage recurring business models by streamlining the quote-to-payment process, all on a single platform.
Recurring business models have transformed industries
Recurring business models are all around us. We see them every day from our favorite B2C companies that offer subscription or usage-based products. Companies like Netflix and Spotify won our hearts by disrupting the video and music industries with subscription models that grant access to tons of content for a small monthly fee. When was the last time you saw a Blockbuster card?
For customers, recurring models are attractive because it forces companies to earn their business month after month. And for companies like Netflix and Spotify, it gives them a consistent and predictable revenue stream, providing incredible visibility into their business. This visibility has enabled companies to make better business decisions, create happier customers, and ultimately drive more growth.
Since 1999, we at Salesforce have seen first-hand how disruptive a recurring business model can be through the emergence of SaaS (Software-as-a-Service) offerings. Although previously considered to be a fad, SaaS is now the gold standard in the technology industry.
We’re now seeing more companies adopt this approach across every industry. For example, in the manufacturing industry, Rolls-Royce recently launched a recurring business model by offering “Power by the Hour” where they charge their customers based on the number of hours that Rolls Royce engines are used.
The challenge of creating a recurring business model
But as with all transformations, businesses can’t adapt to this shift without looking at their culture, processes, and systems. There are some major changes that need to be considered. In a recurring business model, the sales process is no longer linear, which means orders are dynamic and ever-changing, so companies need to focus as much on the renewal cycle as they do on the initial sale.
I’ve heard our customers confirm these transformation pains over and over. Recurring models are difficult to implement and manage because they require a change to legacy systems and processes, which weren’t built to handle dynamic orders.
Announcing Salesforce Billing
For these reasons and more, I’m excited to announce Salesforce Billing, which extends Salesforce CPQ to streamline the entire quote-to-payment process, enabling our customers to:
- Adapt to changing business models by unifying the entire quote-to-payment process on Salesforce. Now, any business can sell and bill one-time transactions, subscriptions, and usage-based products in one place, eliminating the need to build complex integrations or duplicate systems.
- Automate the Customer Lifecycle with workflows to handle co-terminations, prorations, add-ons, upgrades, swaps, reductions, and renewals, removing painfully manual processes and errors.
- Make smarter financial and planning decisions by building a 360-degree view of the customer that includes order, contract, invoice, and payment data to provide a new level of visibility into the entire lead-to-payment process.
In addition, with our thriving ecosystem of AppExchange Partners and strong ERP integrations, our customers can extend the effectiveness of Salesforce Billing by building it into their current systems — no headaches required.
Learn more at Dreamforce ’18
At Dreamforce ’18, we’ll dive deeper into Salesforce Billing and all our exciting announcements in the CPQ + Billing Keynote where we will show how you can build recurring relationships with your customers.
Join us in person, or watch online. Bookmark and register here.