Salesforce for Subscription Business Models

Subscription business models have been in vogue in some traditional industries like publishing (newspapers, magazines), telcos and utilities (cable TV, internet services) and you see the software industry among others embracing them now.

What characterizes the subscription model is the service is delivered and invoiced periodically, say each month.

Some of the unique elements in mapping the business processes of the subscription companies to Salesforce:

  1. Implement Revenue or Quantity schedules or both to reflect the delivery and payment schedules
    • Quantity schedules are suitable if your customers pay upfront and receive the products in increments
    • Revenue schedules are appropriate if your customers make periodic payments for products they receive upfront
    • Revenue and Quantity schedules if both product deliveries and payment is on an ongoing basis
  2. Set up Salesforce’s Opportunity to map to Subscription Orders in the backend system that the company may implement for subscription orders and subscriber billing. We see Zuora, Intacct, Quickbooks among other larger usual suspects handling orders and billing for subscription businesses.
  3. Companies with subscription services will have Customer Success teams or some variants of them, responsible for ensuring license renewals. These will include specialists who proactively manage for upcoming renewals. Whether the company is set up to treat this as a sales or service process should guide how Salesforce captures renewals. Engagement measures like Recency of Engagement, Frequency of Engagement, Volume of Engagement are good pointers to customer satisfaction for subscription services
  4. Capture the monthly recurring revenues (MRR) as the monthly value of the opportunity; and also the total opportunity amount for term of the subscription separately. Use the appropriate field between the two for pipeline & forecasting, sales compensation & quota retirements
  5. Accommodate typical sales promotions including free months, unpaid additional trial licenses by including them into price books and communicating a ‘chart of authority’ to the sales teams
  6. Manage leads or opportunities through campaigns, demos and trial periods before turning the prospects into subscribers. Capturing the data across this process and drawing insights from the aggregate is important for running the high volume subscription business
Ramana Metlapalli
Ramana Metlapalli
Ramana is a Managing Principal at Varasi. Ramana is a lifelong learner and eternally curious about what goes into making some individuals and organizations, high performance ones. He writes about Business Analysis, Salesforce best practices and the world of Consulting.