Think about the last time you used a subscription service. Maybe Netflix, Amazon, or Dollar Shave Club come to mind. (Maybe Fortune magazine does, too.) For the best such companies, a customerās experience is centered around service, rather than a given product. Itās not just what youāre getting; itās when and how youāre getting it.
Call it the subscription economyāa term coined by Tien Tzuo, CEO of Zuora, a company that makes software to help other companies create subscription business models. āThe subscription economy is the idea that we have to buy less and less stuff to meet our needs,ā says Tzuo.
There are other benefits. Subscription services keep customers more engaged over the long term, the executive says, and generate steady cash flow. The model shifts the focus away from products and toward serviceāthat is, solving a customerās problems.
āAsk yourself: How does your product or service make a difference?ā Tzuo asks. āEvery employee needs to have an answer to that.ā
Zuora tries to practice internally what it preaches externally, Tzuo says. āWe still have a lot of work ahead as we try to create a new concept in the subscription economy,ā he says, āso we need employees who are signing up for that mission.ā
Watch the video above for more from Fortuneās interview with Tzuo.
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