"Grasp new business opportunities in the rapidly growing subscription economy: Taiwan's practical experience of X world trends" Lecture experience: Create a customer-centered business model
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Yesterday evening, I walked from the MRT Technology Building Station to Xinhai Road, passed through the familiar National Taiwan University campus, and arrived at the National Taiwan University Conference Center. Walked the road of 2.5 kilometers , just to attend the lecture “[Grasping the New Business Opportunities of the Rapidly Growing Subscription Economy: Taiwan’s Practical Practice of X World Trends] (https://www.accupass.com/event/1904290732532055247344)” organized by Tianxia Magazine Publishing.
Of course, the purpose of holding this event is to help Zuora(Zuora) CEO Zuo Xuanting(Tien Tzuo)’s new book “[Subscription Economy: How to use the strongest business model to open up new service opportunities](https://www.books.com.tw/exep/assp.php/ vista/products/0010819588?utm_source=vista&utm_medium=ap-books&utm_content=recommend&utm_campaign=ap-201906)》Promote books! The organizer also paid special attention to inviting CyberLink Chairman Huang Zhaoxiong and [HomeKeeper Homekeeper] (https://www.homekeeper.com.tw/) CEO [Wang Qiuzhen] (https://www.chinatimes.com/newspapers/20180728000430-260210?chdtv) came to the platform to share their experience in joining the subscription economy.
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It is a pity that although Lin Yichang, the director of Zuora Company was invited to share this time, the author of this book Tien Tzuo was not able to return to Taiwan together, which somewhat makes people feel that there is a fly in the ointment.
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Young and promising Director Lin worked for Adaptive before joining Zuora in 2018 Insights, NetSuite and other well-known Software as a Service (SaaS) companies, have also worked as software engineers in many start-up companies in Silicon Valley, USA, and have more than fifteen years of enterprise software experience.
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Director Lin of Zuora mentioned at the beginning that all walks of life are undergoing transformation, and departments within the company also need to transform. Obviously, the era of “everything can be subscribed” has arrived! If a company adheres to the traditional business model, it may still be busy selling products. However, in the face of rapid technological changes and changes in customer thinking, manufacturers must communicate product features through experience rather than using a large amount of advertising to communicate brand image.
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As Zuo Xuanting mentioned in the book, the focus of Subscription Economy is the customer, not the product itself. The reason why everyone has higher expectations for subscription services is because this powerful business model has made breakthroughs and improvements in areas such as results, customization, and continuous improvement.
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★ Image source: NAVINT website
Read “[Subscription Economy: How to use the strongest business model to open up new service opportunities](https://www.books.com.tw/exep/assp.php/vista/products/0010819588?utm_source=vista&utm_medium =ap-books&utm_content=recommend&utm_campaign=ap-201906)”, you can see Zuo Xuanting calling on everyone to rethink the 4Ps of marketing. The author points out that the biggest difference between traditional business models and new business models is that traditional thinking uses channels to sell products, but now it is subscriber-centered and conveys the characteristics of services through experience.
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In other words, the spirit of the subscription economy is to get rid of price wars and win based on service value. Take Netflix as an example. They try to produce high-quality film and television programs, let the audience actively follow the series and help promote it, so that they can create a very high retention rate of paying members.
Only by treating customers as subscribers can we build mutually beneficial long-term relationships.
Dr. CyberLink Chairman Huang Zhaoxiong, who took the stage next, shared with everyone the company’s experience in promoting subscription services. CyberLink is a veteran local software manufacturer. They launched PowerDVD as early as 1996 and PowerDirector (https://tw.cyberlink.com/products/powerdirector-video-editing-software/features_zh_TW.html) in 2001. It has won numerous awards for more than ten years. But seeing Adobe transform into subscription services also inspired them to think about the feasibility of subscription economy.
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In February 2018, CyberLink officially converted apps such as PowerDirector and PhotoDirector to subscription systems, and later converted related PC products to subscription services in September. Dr. Huang pointed out that although the loss of customers is inevitable when switching from a product buyout model to a subscription model, the overall profits have actually increased because they have been able to increase prices and focus on customer service!
He also used the case of Adobe to explain to everyone that in fact, consumer software subscription services have been around for many years and are not a new innovation. The key to the success of the subscription system lies mainly in market acceptance. Especially after the leading brand Adobe decided to switch to a subscription system in 2013, it also had a huge impact on the subscription market.
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As we all know, transformation to a subscription system is the future trend of the software industry, but how to create a successful subscription system? Dr. Huang shared with everyone that he believes that the key for enterprises to transform into a subscription economy is to find new sweeteners in addition to existing products or services. And it systematically increases the sweetness month by month to attract subscribers and increase stickiness.
Taking PowerDirector as an example, in addition to using the software, subscribers can also enjoy quarterly feature upgrades and monthly updated material libraries, music, sound effects and other materials. Providing a powerful library of plug-ins and materials worth more than US$3,000 can be said to be CyberLink’s secret weapon in creating customer loyalty.
These words are really great. I believe they will be inspiring to those who are interested in embarking on the road of subscription services. They can also be said to be the biggest highlight of last night’s lecture.
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The finale was Homekeeper CEO Wang Qiuzhen (https://www.chinatimes.com/newspapers/20180728000430-260210?chdtv). He also shared with everyone how he started to engage in native subscription services? And, the mental journey along the way.
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CEO Wang mentioned that the reason why he wanted to start a business and build Taiwan’s first subscription platform for home furnishing products was actually due to his own needs. He longed for the simple life in Northern Europe, but found that if he wanted to buy Nordic-style products, in addition to IKEA, he could only go to Nordic window shopping. There were too few choices! Based on such a simple idea, he also created a subscription service for physical goods. CEO Wang pointed out that subscription services for home products are not easy to implement and will face three major challenges, namely: high freight costs, long product selection time, and difficulty in platform positioning. Therefore, since HomeKeeper Dinyuejia was founded in 2017, the entrepreneurial team spent some time thinking about ways to break out, and now they have finally found their own business model.
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The entrepreneurial philosophy of HomeKeeper Dinyuejia is to become everyone’s exclusive housekeeper. In other words, customers only need to subscribe once to receive products regularly, which saves purchasing time and eliminates the need to waste valuable indoor space to store spare parts, allowing them to enjoy a tasteful life elegantly!
CEO Wang also observed the rise of the subscription economy and sharing economy, and felt that emerging domestic artists have abundant painting output, and many families also have the need to hang paintings and enjoy art works, so he launched the painting sharing platform “HUAHUA Painting”.
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The emergence of “HUAHUA Painting” not only allows paying members to enjoy art works at any time, but also provides art students from the four universities including National Taiwan Normal University, National Taiwan University of Arts, Beijing University of Arts and Culture University, and has gained recognition from the market. What’s even better is that the platform itself can also make some profits and continue to provide services, which can be said to kill three birds with one stone.
Taking a look at the wonderful sharing brought by the three speakers, we can learn that the core of the subscription model can be regarded as a financial concept and interest relationship between consumers and enterprises. However, as the times evolve, the content provided by companies gradually transitions from goods to services, and what consumers get after paying the fee is mostly the right to use the goods or services, rather than ownership.
💡 Further reading:
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Further reading
- I read “Digital Transformation for Leaders”: Creating a new business model
- I read the “age of value proposition”: a blueprint for showing the value of business models and services
- I watched “Detonating the Membership Economy”: Creating an entrance that connects community and business logic
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