$40 Million

Wednesday, March 17th, 2010 at 7:24 pm

In my previous post, I alluded to statistics that highlight how Vindicia CashBox helps clients retain customers and thus lift revenue streams.  In a press release issued at the Game Developers Conference in San Francisco in early March, we mentioned these numbers:

  • Over the past year, thanks to our retry logic, Account Updater, and other retention capabilities, our clients gained 10-25 percent more of the customers who failed in their initial attempts to renew subscriptions.  We have seen this trend across all the vertical markets we serve.
  • Take those percentages and aggregate the dollars across our client base over the past year, you get a total of $40 million.  More importantly, this number grows every day as we add clients and as our existing clients’ business expands.
  • Our transaction volume has risen by about 45 percent over the past year: We now handle about 250,000 transactions every day while remaining PCI-compliant at the highest levels for the fifth year.

Speaking of PCI compliance, its juxtaposition with cloud computing is catching more and more attention.  If you’re attending Cloud Computing Expo in NYC in April, check out our CTO Brett Thomas’s presentation.  You’ll hear something very novel that will radically change your thinking about PCI compliance in the cloud.  I promise.  Don’t miss that talk!

Share|
Sanjay SarathyTags: , ,
Posted by Sanjay Sarathy in Best Practices, Marketing Fury | No Comments »

Don’t Waste the Internet on TV?

Monday, March 15th, 2010 at 9:30 am

Recently, Avner Rosen of Boxee debated Mark Cuban about the future of television. I didn’t get to see the debate (GDC overlaps with SXSW) but I saw Mark Cuban’s post debate post. It’s actually kind of funny as Mark had always been a visionary in the past, but it is what happens when you make a major capital investment in things like HDNET it colors your perspective. His basic thesis is that either because “Application Specific Networks” or the large capital investments in distribution infrastructure are pretty efficient, there is no reason that TV will migrate to the internet.

AOL proved that “Application Specific Networks” are an excellent way to lose a whole lot of money. It was profitable while it lasted but AOL is now a shell of itself and has to reverse its walled garden to hope to keep the small business left. Mark’s comment that there isn’t a revenue model to get content providers to move is just funny. Napsterization comes to everyone. My big question for Mark, though, is how did those large capital investments in shipping, warehouse, and retail capacity work out for Tower Records…

As seems to be common in these major channel disruptions, people seem to be focusing on simply replicating the old distribution channel. TV over the internet is going to be about a lot more than just access to TV and movies. It’s going to be about being able to use video in new and different ways that will be impossible to replicate over a satellite and a waste of bandwidth over last mile connections that could otherwise be part of the total IP bandwidth of the last mile bandwidth instead.

I can’t wait to turn my TV provider off. We’re close.

Share|
Gene HoffmanTags: , , , , , ,
Posted by Gene Hoffman in CEO Blog | No Comments »

A New Analyst Report on Subscription Billing

Tuesday, March 9th, 2010 at 2:26 pm

Diversity Analysis, an independent consulting group that specializes in SaaS, cloud computing, and business strategy, recently published a report that includes 10 questions any online business should ask of its billing infrastructure.  I found the entire analysis worth reading and would like to highlight here a few quotes that reflect what many of our existing and potential customers have been pointing out are especially important to their business–

  • The need to be able to react to international taxation rates and laws, international currency issues, diverse payment methods and multiple languages are all factors that need to be taken into account.
  • In a business to consumer (B2C) operation, it is entirely possible that a business may have hundreds of thousands of customers and hence millions of billing transactions – scaling for subscription billing is therefore far more complex and time consuming than for traditional product companies who generally invoice on a one-time basis.
  • Of all these regulations, it is most critical that the billing solution is compliant with PCI. It is important that not only the infrastructure housing the billing solution is secure but also the flow of financial data, thereby ensuring data security standards.
  • Specialist and comprehensive billing systems are built to automate many parts of the billing and subscription process and in doing so both save money (in terms of time savings) and drive extra value (in terms of increased customer retention).
  • Similarly a billing and subscription service should be seen as a core part of the customer relationship management operation. It should give the business sufficient visibility into a customer’s needs to enable targeted marketing by way of up-selling or cross-selling.

The billing infrastructure wields a significant effect on your business, as Diversity Analysis emphasizes in its report.  In an upcoming post, I’ll go into some numerical depth on the value of CashBox for our clients.

You can download the report here.

Share|
Sanjay SarathyTags: ,
Posted by Sanjay Sarathy in Marketing Fury | 2 Comments »

Facebook Platform Trends

Friday, March 5th, 2010 at 8:32 am

Facebook is wildly popular, the latest comScore report shows that it currently has 38.3% reach across all internet users and they have doubled their unique visitors (111%) over 2009. Facebook’s success has led to a massive economy of third party applications built around their 400 million strong (and growing) user base.

Most of those applications make money through advertising or virtual goods and currency. Regardless of the mechanism, the underlying success factor is attracting a large number of users. That either creates an attractive demographic for advertisers, or creates a user base that will convert at some percentage into paying customers. Over the last few months Facebook made several changes that change the playing field for application developers monetizing on their platform.

1) The biggest of these changes is Facebook Payments. They’ve spent a lot of time working on building a payment infrastructure and it won’t be long before the only method of payment for applications will be Facebook Credits (at a 30% cut to Facebook ala Apple’s iTunes)- http://news.cnet.com/8301-13577_3-10460201-36.html

2) Secondly, there is an increasing shift towards limiting communication between applications and users, this has been ongoing for quite a while as Facebook balances notification spam and the major source of customer acquisition for many apps –  http://www.readwriteweb.com/archives/facebook_silences_app_notification_spam.php

3)   Facebook has been shifting more and more burden onto developers. This is a good thing overall for the community and encouraging developers to contribute value for the community. They are basically forcing their developers to shift from being a dev shop into providing a full customer experience including customer service, policies and monitoring. http://wiki.developers.facebook.com/index.php/Policy_Examples_and_Explanations

These trends will continue as Facebook continues to grow – it will be harder and harder to create a profitable business on their platform. The outstanding question now is will developers re-evaluate their relationship with Facebook and develop their own stand-alone portals?  The difference between offering an application on Facebook and offering it on a stand-alone site used to be quite large, but that gap is narrowing quickly. The freedom to control the customer experience is compelling, as is the ability to control customer billing and put more revenue in your bank account.

Will Facebook work with developers and entice them to stay on the platform? Or will it become a marketing channel for users to get acquainted with off-platform brands? Either way, it’s going to be an interesting year for social apps!

For more on the tradeoffs associated with “on or off” platform applications – Susan Wu of ohai! has a great post on her blog.

Share|
Jeremy NusserTags: , , ,
Posted by Jeremy Nusser in Data Geek, Marketing Fury | No Comments »

Experience Matters

Wednesday, March 3rd, 2010 at 12:58 pm

Having spent nearly all of the last two decades working on billing systems, I’ve been through I-can’t-count-how-many different product selection exercises.  A typical scenario goes as follows:

  1. Someone in the organization decides that they’ve “had enough” and they start the ball rolling to select a new billing platform.
  2. A group of internal subject matter experts gather to consider the things a new billing system must do.
  3. These thoughts are collected in a “Requirements List”, which is watered, fertilized (and rarely, if ever, pruned).  The requirements list rapidly grows into a full blown RFP.
  4. RFP is sent to vendors.
  5. Shoes are shined, hair is combed, and promises are made that the platform being pitched will do exactly what you’ve asked.
  6. And then the real work begins…

The problem with this process is that it supposes that anyone out there has a billing system that matches exactly the way your team thinks of billing—and also that your team has nailed with 100% accuracy the needs of the organization not only today, but over the next 7-10 years.  I’ve been involved in projects ranging from straightforward SaaS deployments to “Enterprise Software” on up to “custom built” solutions.  No single delivery strategies has the corner on the market for success.

Many clients have told me that the one thing that tips the scales in favor of success is expertise.  Deploying a billing platform is a process filled with hundreds of small decisions.  Should I accept or reject this AVS return code?  Which screen layout will increase conversion rates?  When should we send email to our customers?  How should my retry cycle change based on my product offerings?  The key measurement of a services team is not only whether they know the answers to the questions, but do they know which questions to ask?  That is the key to maximizing value from the billing system.

My advice is simple:  when the experts gather and start watering the requirements tree, make sure they give consideration to the roots of the tree.  Make sure the services team of your billing partner can help guide you through not just the technical implementation, but the key business decisions that will have the greatest impact on your revenue.

Share|
Doug Smith Posted by Doug Smith in Best Practices | No Comments »
  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4