Introducing the Subscription Business

Objectives

After completing this lesson, you will be able to:
  • Describe business examples for subscription business
  • Explain the subscriptions change economy
  • Explain industry examples

Subscription Business Introduction

Listing of B2B business subscriptions examples: Music or television Streaming Service, Sport Club Membership, Utilities: Waste removal, Credit Cards, Mobile phone, Car sharing, Transportation ticket (bus, train), Usage of automotive services, and Software license.

Note

Subscription business is found in more business-to-consumer (B2C) business.

Subscription business is found as well in business-to-business (B2B) business. Here are some examples:

Listing of Services using subscriptions: Cloud Services, Print Services, Laptop installation and maintenance service, Travel agency services, Dealer services, Fleet services (Car Fleet), Parcels Services, Car Rental, Company Credit Cards, and Cleaning Services.

Subscriptions Change Economy

Illustration depicting the shift from single transactions to a subscription-based economy. On the left, a BUY NOW button represents traditional one-time purchases. An arrow points to a computer screen on the right, showing options to BUY NOW or SUBSCRIBE. The right side emphasizes a relationship-focused approach with a SUBSCRIBE button and various subscription models listed, including Usage, Revenue Share, Solution, Outcome, Custom Discount, Custom Offer, Freemium, and more. The image highlights how businesses now engage with customers through ongoing relationships rather than single transactions.

These innovations in business models have the singular aim of retaining customers by building long-term relationships with them and not simply focusing on single one-off transactions.

In the following, some industry examples that use SAP Billing and Revenue Innovation Management are analyzed.

Industry Examples

Business Example Postal

Parcel X is a Postal Company in North America. Parcel X Customers are B2B Business Customers with Customer Hierachies:

Online Shop New York, Fresh Food New York, Postal Shop New York, and so on. The master agreements for customer groups are realised in the SAP Billing and Revenue Innovation Management solution.

The postal industry needs a configurable price model with the following characteristics:

  • Surcharge (CO2, Insurance, destination)
  • Fees depending on delivery zones
  • Dimensions of goods (weight, length, and so on)
  • Channels (Road, Airfreight, and so on)
  • Service +level (Tracking level, and so on)

The SAP Billing and Revenue Innovation Management solution allows you to:

  • Introduce industry and/or customer-specific attributes
  • Use industry-specific pricing models
  • Scale the Solution architecture to high complexity
Diagram illustrating the revenue-sharing model of Railway X, which operates a large railway network in Europe and offers various tariff types for different customer groups, including prepaid tariffs and subscription-based discounts. The diagram shows the flow of money between the Platform Operator, Partner Platforms, Other Platform Operators, Local Partners, and Customers, highlighting partner billing, settlement, platform payments, and revenue sharing.

The SAP Billing and Revenue Innovation Management solution allows you to do the following:

  • Handle partner contract terms with just as much flexibility as customer pricing, using the same toolset and skills.
  • Interlink customer pricing with partner revenue share and commissioning agreements to correctly model your business.
  • Tailor your offers to partners by allowing special incentives for your most valuable partners while still maintaining the overall manageability of your pricing catalog.
  • Rationalize your infrastructure by calculating and settling amounts due to partners through the same rating and billing solution as for customer transactions.
  • Gain partner loyalty and trust with full transparency for partners through customizable detailed reporting and prompt payments.
Outline of new business models in the B2B space across six sectors: Smart Location, Energy, Transport, Healthcare, Supply Chain, and Insurance & Banking, highlighting key features and value propositions for each. It emphasizes continual value, infrastructure sharing, value-added services, predictive maintenance, real-time tracking, and risk assessment.

Various new business models have sprung from this new engagement with customers and partners. One example is sharing infrastructure and enriching partners to serve customers better.

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