When to Use a Subscription Model with Axel Kirstetter

Axel Kirstetter is a global and multilingual technology executive with start-up and large-cap experience for companies achieving accelerated growth targets, category leadership, and successful exits (Datasite, COLT, TomTom, Intralinks).  He has been in the cloud space since 2000, subscription economy since 2003, SaaS sector since 2006, and tackling product-led growth since 2017. In this episode, Axel shares how you start from a transaction nature of a product, then find your best market fit, work around what pricing is relevant to support it. Eventually, you look at the genuine subscription model that best gives you the chance to achieve your revenue objectives.   Why you have to check out today’s podcast: Find out how to build a business so you can get subscription revenue and, more than that, finds opportunities for upselling and cross-selling Find out which subscription revenue model is best to go after considering the growth rate mode at which you are at the moment Learn how to combine the subscription revenue model with the consumption-based notion to achieve revenue objectives better   “Keep optimizing, keep iterating; it's never done. Don't overthink the quantitative elements because you do have the possibility nowadays to quickly and rapidly adjust once you are in market. So really keep optimizing, keep working away at what the price point is.” - Axel Kirstetter   Increase Your Pricing Knowledge: Become a Champions of Value INSIDER! To sign up go to insider.championsofvalue.com   Topics Covered: 01:24 - How he became so good at all issues around pricing and started a career at it 02:26 - How does he define his title as Content Marketing and Pricing VP? 03:51 - Product people talk about Pricing but don't really understand in the detail level what Pricing does 05:17 - A degree of maturity and sophistication as to how you do pricing discovery and value discovery 07:06 - Axel’s thoughts about a subscription 09:17 - Taking a look at Salesforce subscription pricing 10:02 - What do most associate 3.0 with? 11:07 - What is 4.0? 13:46 - The difference among consumption, subscription, and recurring revenue 16:49 - Are Coke and Uber a recurring revenue model? 22:24 - Combining subscription with consumption notion 24:57 - Which one to use: subscription business model or recurring revenue business model 25:55 - Axel’s perspectives on these three revenue buckets of winning customers, keeping customers, and growing customers 28:23 - Which one to focus on: going after recurring revenue or asking what’s the right business model   Key Takeaways: “There has to be a degree of maturity and sophistication as to how you do pricing discovery and really value discovery. And that takes understanding the sort of product-market fit; it requires a bit of understanding of how your salespeople would negotiate.” - Axel Kirstetter “A company is willing to be very clever about a subscription versus a consumption mode. I think being online is fantastic because it makes you findable that you don't have to gravitate towards the notion of you know, subscribe to over 12 months, when all you do is you need it at certain peak times at certain convenience levels.” - Axel Kirstetter “We need to think beyond just the gold-silver-bronze approach. Because it's more than just a subscription. It's more than just sort of meeting the needs of investors; you have to meet the needs of the end consumer.” - Axel Kirstetter “Subscription has varied flavors to them. Think which type of subscription model works for the client circumstance.” - Axel Kirstetter   Resources Mentioned: Salesforce Starbucks Panera Pret Uber Coke Harry’s Razor Zappos Amazon   Connect with Axel Kirstetter: LinkedIn   Connect with Mark Stiving:  Email: [email protected] LinkedIn