Amazon’s most recent earning report speaks to the power of recurring revenue and how its strategy to build shareholder value might not have to do with the number of products it is able to move, but rather its recurring revenue subscription business such as Amazon Web Services and Amazon Prime, which is not only growing rapidly year-over-year, but also growing as a greater share of Amazon’s overall revenue. Amazon and Stoneacre2.0 share the view that turning transactions into recurring revenue is the right business strategy.
We like this Harvard Business Review article because it speaks to the critical reality that not only customers are created equal or of equal value. Rather, as Stoneacre2.0 points out in our e-book, the key to long term business success is to realize the full profit potential by building deep relationships with your best customers. Understanding the concept of life time value and implementing strategies and programs that maximize LTV is at the core of Relationship Marketing.
We follow the blog of Jeff Bussgang, a highly successful, highly respected Boston based venture capitalist. Jeff and the founders of Stoneacre share a long history in loyalty, affinity and relationship marketing. We also share that shareholder value is enhanced and maximized by turning transactions into recurring revenue. We could not agree more with Jeff as he says that “recurring revenue is magic”. Jeff and Stoneacre met over ten years ago when Stoneacre as exclusive license rights holder designed and launched the NASCAR Member Program. Stoneacre remains a big fan of Jeff and his track record as a successful venture capitalist and a thought leader is well established.
We like this Inc. magazine article as it provides some helpful examples of the different recurring revenue models to consider once the realization that transactional business models are not the smart way to build long term customer relationships or shareholder value. Relationship Marketing Programs are central to long term success. The examples in this Inc. article are helpful but download our e-book for an even deeper dive into best practices and what to consider in a Relationship marketing Program.
We like this one because we agree that customers today, especially millennials,expect an offer and a marketing engagement to be part of a relationship. They expect that offer to be more personalized. As this article from medium points out, a trend is well underway that is transforming the way business is transacted: from buying products ( transactions) to subscribing ( recurring revenues) . Some call this new business environment the “subscription economy.” Stonecare2.0 calls this Relationship Marketing.:
We like this article from Scout Analytics because as the article points out as recurring revenue models become increasingly prevalent, it is important to realize that traditional revenue management practices of transactional models are ineffective under a recurring revenue model. The shift to digital, social and mobile marketing allows for hyper-targeting and more efficient marketing. The strategies, tactics and performance metrics are entirely different in this new world. To effectively manage revenue and profits in a recurring revenue model, companies need a new revenue management process. Stoneacre2.0 is highly experienced in managing the nuances of multi-channel, multi-platform consumer engagement and in deploying proprietary technologies to deliver “the right offer to the right person on the right channel in the right location at the right time”.
Recurring Revenue models come in many forms just like any effective solution. This Inc. magazine article provides additional information to consider in the design of a Relationship Marketing Program. :
Here is another source of information for entrepreneurs that not only speaks to the benefits of a recurring revenue model such as being highly predictable but also to the key realization that recurring revenue business models generally start slowly and likely require more capital to get it going. It is important in Relationship Marketing Programs that a long term view is embraced. Download our e-book for more information. A relationship Marketing Program is not A Do-It-Yourself endeavor. Stoneacre2.0 is expert at designing, launching and accelerating cash efficient Relationship Marketing Programs:
We like this article from Andrea Rubin Marketing because their point of view and knowledge of multi-channel marketing, consumer engagement and relationship building aligns quite well with Stoneacre2.0:
Well-designed Relationship Marketing Programs incorporate emotional triggers such as scarcity and exclusivity. Colloquy is a well recognized though leader and information source is the loyalty marketing world. This Colloquy article speaks to many of the custom elements that have been built into many of the highly successful loyalty, affinity and relationship Marketing programs designed and developed by the Stoneacre2.0 founders throughout their career:
Percentage of Americans enrolled in loyalty and affinity programs – Source: Access Development
Half of all consumers change their behavior to secure “insider” status and/or get more benefits, privileges and access – Source: Colloquy
Increase in program registrations 2014 vs. 2012 – Source: Loyalty 360
1 in 3 consumers want to be and feel valued by the brand – Source: InMoment Survey