Carl Gold, Chief Data Scientist
The Subscription Economy - an era where consumers prefer access and experience over product ownership - is creating a whole new crop of businesses. They are transforming into software and services businesses and, rather than focusing on shipping more product, they are instead focused on growing and monetizing a loyal customer base.
From media (HBO and Financial Times) and software (Box and Symantec) to automotive (Ford and General Motors) and energy (British Gas and Schneider Electric), Zuora’s nearly 1,000 customers wanted to better understand how their primary subscription growth metrics compare to others in their industry. Zuora also hoped to learn why its customers grow to service them better and scale its own business.
Data around subscription businesses is complicated, and there are a variety of new subscription-focused metrics to choose from, such as recurring revenue, average revenue per account, and the churn rate. Subscription businesses also have different business models (business-to-business, business-to-consumer), and span many industries (media, software, retail, automotive).
The Zuora Subscription Economy Index (SEI) was therefore designed to measure the collective health of subscription businesses and track the impact of these businesses on the overall economy. It revealed subscription businesses grew revenues nine times faster than S&P 500 company revenues and four times faster than U.S retail sales over 15 consecutive quarters (January 1, 2012 to September 30, 2016).
Zuora created a benchmark for customers to compare their own growth numbers. By using its product, Zuora also could identify new growth opportunities and capture millions of dollars of revenue through improved customer satisfaction, increased agility and faster time to market. Since the SEI was published in November 2016, the SEI has been downloaded more than 3,000 times. It has been cited nearly 100 times in the press, used in the book Subscription Marketing and cited by analysts covering this space.