Knowledge management is defined as, “the process of capturing, distributing, and effectively using knowledge.” We find that it is essential for all businesses to have information about its products, hierarchical structure and the way tasks are carried out to support business growth. This knowledge then needs to be effectively managed and reproduced according to the requirements of a business.

Knowledge management helps a company identify their mission and objectives, as well as manage the day-to-day information sharing essential to business success. Knowledge management is also able to enhance the work environment by breaking down silos and enabling different people to work together to achieve mutual goals.

Below, we will aim to present both the benefits and risks of knowledge management in the cloud. But first, let us take a closer look at knowledge management solutions available today.

Types of Knowledge Management Solutions

There are two kinds of software solutions for creating digital knowledge bases: local solutions and cloud solutions. Local solutions require the establishment of a local server computer which houses the knowledge database of the organization. This is excellent for a large business, but not suitable for most companies due to the high initial costs required to set up the expensive hardware.

For those companies that cannot accommodate a local solution, cloud solutions can provide companies with cheaper alternatives without investing in costly servers and staff to maintain them. Salesforce and ProProfs are powerful cloud knowledge management solutions that are quickly capturing market share around the world.

The Benefits

There are many benefits of cloud-hosted knowledge management systems. For companies that sell subscriptions online, knowledge management is particularly helpful in the following areas.

Reduction of costs

All businesses are trying to streamline their processes and reduce internal operating costs. Cloud-based solutions are able to significantly reduce the capital as well as operating costs for a company. These reduced costs then allow companies to invest in the substantial customer acquisition costs associated with subscription business.

Better decision making

Decision making is improved with the use of customized knowledge base solutions. Web-based knowledge bases are always updated and allow a better flow of information between different company departments and important decision makers. This improved information flow provides a more complete picture for decision makers and plays a significant part in making the business a success.

Learn how APIs connect teams and tools to align your subscription business

Ease of access

The problem with local databases is that they can only be accessed from a fixed set of network platforms. On the other hand, cloud-based solutions allow employees to access the information from anywhere. This means they can work on urgent requests while accessing information from their homes or from any other remote location.

Removing redundancy

A cloud database stores all the files in a systematic manner with version control. It is almost impossible to duplicate information or content which is already placed on the database. This removes redundancy issues when adding to the database and also ensures that information elements are streamlined. Employees can spend time being productive rather than sorting through redundant files. While this benefit seems to only apply to internal processes, it will greatly improve customer experience to have a more efficient team. Improved customer experience means increasing recurring revenue.

Quick communication

Cloud knowledge management solutions allow for quick communication between the different employees of a business. Getting information in real time means not wasting effort on tasks that are no longer relevant or required in light of any new information. With a knowledge management system in place, all employees are able to share useful tips with each other, which, in turn, increases productivity and your ability to deliver superior customer experiences.

The Risks

There are also some serious threats that are involved when working with cloud-based knowledge management systems. Though many of these risks exist for any business, moving important business data to the cloud should always be weighed against these most pressing risks.

Cloud security

Whenever you are using web-based applications, the security of cloud networks is the most significant risk. Local servers are often separated from the internet and offer complete security from external attacks. However, it is impossible to totally isolate web-based knowledge databases, so there is always an increased risk of a security breach when using these services.

Diminished role of IT professionals

Outsourcing knowledge management reduces reliance on internal development resources. But there is a risk of getting rid of brilliant computer programmers and network experts. The loss of exceptional talent can hurt a business in the long run and decrease the morale of the remaining IT employees who remain after the establishment of cloud-based computing services. If the business will support it, retaining that talent to focus on customer-oriented initiatives will bring a much more valuable return on investment.

Legal complications

Companies that use cloud knowledge management may be subject to legal compliance, but they often fail to look into this matter. Government and industry standards such as HIPAA and PCI-DSS, as well as stringent EU regulations, influence how businesses use customer data. Companies need to ensure that they understand their legal obligations and are in full compliance.

Keystone

The benefits and risks of cloud-based knowledge management should be considered carefully in terms of the benefit to a business. For a subscription company, that means weighing the risks against those benefits that best enable it to deliver valuable customer experiences.

Will the dividends of easy access, quick communication, reduced costs, better decisions and diminished redundancy outweigh the risks of moving company data to the cloud? Are those risks similar to the risks any business already faces? No matter the solution, though, a streamlined approach to company knowledge management will improve internal functions, reduce costs and increase recurring revenue.

Sameer Bhatia is founder & CEO of ProProfs, a leading provider of online learning tools for building, testing, and applying knowledge. He has a Master’s degree in Computer Science from the University of Southern California (USC) and is an ed-tech industry veteran. You can find him on Google+ and Twitter.

Wasting time manually coordinating your business tools? Align your subscription business with APIs

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In this video, Subscription Billing and the Era of Customer Experience, cleverbridge Co-Founder Craig Vodnik elaborates on what it means for subscription businesses to focus on customer experience.

Transcription

You’re actually in the area of customer experience. What I mean is that your product is not a one-time transaction or a one-time sale. Where it’s going, if it isn’t there already, is a subscription-based product — a product that you deliver through the cloud where the customer interacts on a daily or even weekly basis.

For that, you need to start caring more about how that customer experience is on an ongoing basis, rather than whether they’re happy when they buy the product that one time, that once a year, like it is in a transaction world.

The question I would ask to you is, “Do you care about conversion rates, which is the revenue that you would make from a customer initially, or do you care about the lifetime value of a customer?” What we really want to think about for a subscription-based company is, “What is the lifetime value?”

If you’re focused on giving great service and giving a great experience to the customer, you’re likely to have much more success than if you’re focused on just making some money that one time and not worried about you’re going to be one year later or two years later.

Analysis

This video contains two messages for subscription businesses. The first says focus on customer experience. The second says that when you focus on customer experience you have to change how you measure success.

Customer Experience

Essentially, Craig is saying that subscription businesses need to fundamentally change the way they look at the value they are providing customers. When you demand that customers pay $10, $50 or $100 every month or every year to continue using your service, you better make sure that every time they have to interact with your business that it’s a positive experience. The key to the era of customer experience is knowing that positive UX isn’t only found in the product or service. It’s everywhere users touch your brand. And that happens a lot more than you’d think. Especially with subscriptions.

There are thousands of opportunities for customers to interact with your brand.  You have sign-up pages and trial registrations, and the payments, and the entire My Account section. And then comes license management and renewals and upgrades and downgrades and even (gasp!) cancellations. Even when they cancel you have to provide world-class service. Your reputation is on the line. So it’s imperative that you offer customers not only a great product, but a great customer experience in all respects. And that means caring about the details and making sure that every click from trial to renewal results in a smile. If that’s too much, at least keep your customers from facepalm.

Conversion Rate vs. Customer Lifetime Value

Embracing the era of customer experiences means changing the way you think about and report success. In the old world of perpetual licenses, companies measured their ecommerce success by conversion rates. Were visitors coming to the shopping cart and completing the order? That’s a win! Oh they’re not using the product? Who cares? We got the sale. It was all about the Buy Button.

With subscriptions, the sale is the start of the relationship. Not the end. In today’s world of cloud computing businesses are lucky enough to know how much and how often their products are used. They know what the most popular features are and they know what the least popular features are. They analyze customer complaints to discover recurring problems and correct the issue immediately. They’re not waiting to release new important features for version 2.0 two years down the road when they can hopefully cash in on upgrade fees.

This is what Craig means later in the video, when he explains that this whole new approach to business value, the era of customer experience, goes hand in hand with a shift in how to look at your data and which metrics to focus on. When you focus on one-time transactions and look to raise conversion rates without factoring in how those conversion rates affect CLV, you’re setting yourself up for failure. Maybe that’s too strong.

But if all you are concerned about is getting as many people into the store as possible, and then testing to figure out the best way to get those visitors to pay you for your product, if you’re only focus is that initial transaction, you are missing the big picture. There’s been a powerful but subtle change brought on by the wave of cloud computing and subscription billing. When you demand recurring revenue you are expected to deliver recurring value. And the ones who succeed are those that pay attention to every last detail. The ones who see this change understand just how important it is for them to make sure that their loyal subscribers, their dedicated paying customers, experience such exquisite attention to detail that they don’t even know it.

More resources

If you’re interested in learning more about some of the topics mentioned in today’s video from Craig, check out Andrea Bailiff Gush’s post from last week New Model, New Metrics – Subscription Metrics Defined. Andrea explains some of the concepts behind these important subscription metrics that Craig mentioned.

For an even more in-depth look at the entire subscriber journey and the important KPIs that accompany the main events of a subscription, please read Mapping and Measuring the Subscriber Journey.

The post Subscription Billing and the Era of Customer Experience [Video] appeared first on cleverbridge.

Data accessibility and data security are opposing forces that pull at businesses every day. While the growth of cloud computing has made it easier to access information and applications on multiple platforms in multiple locations, that flexibility brings risks with it. For subscription businesses that rely on cloud-based subscription billing solutions, data security in the cloud is more important than ever.

What are the challenges to data security in the cloud? What are the attitudes of those who know these challenges best? And are business stakeholders listening to them?

How Important Is the Cloud?

Today’s infographic comes from Gemalto (formerly SafeNet), and explores data from a recent survey of IT and security professionals. Their study found important trends, including the fact that in the U.S., 79 percent of IT professionals say cloud computing is very important to their business. They found similar numbers in other regions of the world. In the EU, 78 percent of IT professionals admit that it is more difficult to protect data in the cloud than using conventional security.

Is IT Involved?

Given that cloud computing is so important to the success of businesses and with such a strong majority of IT and security professionals seeing trouble ahead when it comes to securing data in the cloud, one might think companies would consult closely with their IT experts before making major cloud computing decisions.

The study found just the opposite.

Only 20 percent of IT professionals were always consulted or consulted most of the time. 80 percent of IT professionals are consulted about cloud computing decisions only some of the time or never at all. Add to this the fact that 57 percent of companies have no proactive strategy for managing data and privacy compliance, and we begin to see the disconnect between business decisions and actual data security needs.

Beware Shadow IT

The disconnect between business operations and IT teams makes the cloud even stormier through the phenomenon of shadow IT. When employees and business departments are “bypassing internal IT resources to acquire their own systems, software, and other technologies without [the IT department’s] explicit permission,” you have shadow IT. Just imagine any time you were frustrated by your company’s email solution and were tempted to just work on Gmail. Though it might be an expedient work-around, these shadow IT assets complicate cloud security and leave companies open to data breaches. In the US, 35 percent of corporate data is stored on the cloud, but more than half of that data is not controlled by their company’s IT and security teams.

For subscription companies, securing data in the cloud means working with the experts on your team who know the risks best. This doesn’t stop with curbing shadow IT or working with business departments to allocate resources appropriately. You must also secure user authentication and employ encryption where appropriate. Check out the rest of the infographic below and see what Gemalto found about the importance of encryption and authentication.

Download our complimentary guide, Navigating the Subscription Solutions Landscape, today

Source: SafeNet Inc (Gemalto)

The post Cloudy Skies — Data Security in the Cloud [Infographic] appeared first on cleverbridge.

This month on the blog, we covered the difference between user experience and customer experience in a guest post from Shane Barker. We took another look at the AgTech industry and how two companies approach user experience. And we explored three key tips for affiliate marketers to successfully leverage social media. But that’s not everything of note that happened. Below, we feature key stories from the past month about subscriptions, the cloud and global compliance.

Subscriptions in the News

Trapping You in a Club You Didn’t Know You Joined | Bloomberg

In the growing world of subscriptions, unscrupulous companies with abusive (or illegal) policies are getting attention. In Bloomberg’s recent feature, they highlight Adore Me, an online subscription company that ships lingerie to their subscribers. Sounds like many other subscription box companies we hear so much about. But these subscriptions must adhere to the provisions in ROSCA against negative option billing, or defaulting customers into a recurring billing agreement without upholding specific transparency standards. The law states that any subscription or recurring billing agreement must “provide simple mechanisms for a consumer to stop recurring charges from being placed on the consumer’s credit card, debit card, bank account, or other financial account.”

Here’s where Adore Me ran in to trouble. By signing customers up automatically for their VIP package, and then making cancellation of the package practically impossible, Adore Me inspired a torrent of customers to contact the FTC to complain. “Canceling what one customer described in an FTC complaint as the ‘seemingly inescapable VIP package’ can be an aggravating process. ‘I never opted in for monthly billing,’ another Adore Me customer wrote to the FTC, ‘and yet now it is MY responsibility to chase them down to tell them I wish no longer to be enrolled?'”

Oregon State University to Test Subscription-Based On-Demand Tickets for Sporting Events | SportTechie

Subscription models are making their way into college sports. Oregon State University is rolling out a subscription program for sporting events. SportTechie notes, “Oregon State deputy athletic director Zack Lassiter said, ‘We’re not trying to maximize revenue… We’re trying to create a price that resonates with our young alums.’ This on-demand ticket options allows SQUAD users to sit with each other at games, and also provides the option to upgrade to better seats, even at the last minute.”

Head in the Cloud

10 Industries That Have Embraced the Cloud | Inc.com

The cloud is becoming essential to business in more sectors every day. Inc.com compiled this list of 10 industries that have embraced cloud computing. Based on data from Okta, author and Okta COO Frederik Kerrist summarizes his company’s findings by looking at cloud adoption in Software, Marketing, Biotech/Pharma, Real-Estate, Not-for-Profit and five other industries with their heads in the cloud.

Strengthening Authentication Through Big Data | TechCrunch

The cloud is also beefing up authentication technology. We all know passwords are easy to crack, and other authentication technologies are often cumbersome for users, spoiling their experience. But fear not: “As a result of dramatic decreases in data storage costs and the explosion of cloud services, data collection technologies and advancements in web platforms and mobile technology,” connecting large data sets from disparate sources is simultaneously making authentication processes more secure and easier on users.

Global Compliance

Facebook Moments Launches in EU and Canada Without Facial Recognition | TechCrunch

Because of the data protection laws in the EU and Canada, Facebook has disabled facial recognition technology in their photo-sharing app Moments for those jurisdictions. “Facebook says it instead uses a form of object recognition, which is based on features like the distance between a person’s eyes and their ears,” and not on any personal information that users have provided to Facebook.

The article notes that this method is not as accurate as true facial recognition, and may also diminish the quality of the user experience depending on the user’s location. “This makes the app a bit more labor-intensive, as it now can’t automatically identify who is in your photos – it can only suggest that a group of photos that may contain the same person.”

United States: First Circuit Decision Increases Risks to Businesses Under VPPA | Mondaq

The First Circuit US Federal Court recently took up a case involving the 1988 Video Privacy Protection Act (VPPA), which prohibits companies that sell or rent video to consumers, renters or subscribers from disclosing any personally identifiable information to third parties. Mondaq deeply analyses the legal implications in their coverage of the ruling. TechCrunch also has an excellent discussion on their site through the lens of the tech industry.

The plaintiff in this case claims USA Today illegally provided his viewing and location data to Adobe for use in their analytics tool. Two important things to catch with this ruling: First, specifically if your company provides video services, be very careful about the way you use user data and share it with third parties. Equally important, the court found that the plaintiff in the case, who had downloaded a free app from USA Today, did count as a subscriber under the definitions in the law. While lower courts had reasoned that a subscriber had to pay subscription fees, this court’s embrace of a broader idea of the subscription governing a customer relationship updates the court’s understanding of the law to match current industry practice.

Want more? Visit our resources page today.

The post May 2016 Digest — Subscriptions, Cloud & Global Compliance appeared first on cleverbridge.

For our Ecommerce Digest, we’re going to discuss:

• Using customer service as a marketing channel
• How to properly expand your global business
• The success of cloud products and subscription billing models
• Why brands fail at ecommerce and what they can do to fix it

Customer Service

Customer Service is the New Marketing | Michael Hyatt
To remind us of something we all know and to inspire us to look at our own efforts in this area, best selling author Michael Hyatt points out that a great product coupled with poor customer service is a recipe for failure. He tells a story of a superior customer service experience that resulted in his promoting that businesses to his massive online audience. He also noted that he’s done the reverse as well: offering negative reviews of businesses that gave poor service. Obviously, negative reviews like this affect a brand’s reputation as well as their pocket.

Global Ecommerce

Four Questions Aspiring Global Ecommerce Brands Ask Of Technology Partners | Forrester
According to a recent Forrester report, “International expansion is top of mind for many eBusiness executives.” While that report analyzes various global ecommerce markets and lists the many internal issues companies must consider, this blog post continues along a similar path by examining those issues that relate to how your partners, from whom you outsource technology, can assist your expansion efforts in terms of speed, cost, and localization.

Cloud and Subscriptions

Adobe: The SaaS Company That Grew From Zero To 4 Million Subscribers In 2.5 Years | Nasdaq
Since writing about Adobe’s shift to SaaS, the subscription market has only expanded with more and more companies vying for their share of recurring revenue and long lasting customer relationships. This article from SeekingAlpha by way of Nasdaq trumpets Adobe’s success in disrupting their own business model. One note of caution is found at the end of this article: Adobe’s subscriptions may be way up, but their revenue hasn’t quite gotten to the same place. Dovetailing with the Adobe article is this one about Microsoft CEO Satya Nadella predicting the oncoming mass of B2B SaaS products.

Sales

Why Most Brands Fail At Ecommerce | Marketingland
This post uses the author’s experience to frame the way we operate our ecommerce sites in terms of passive waiters versus proactive salespeople, while offering concrete first steps to overcoming specific challenges. The most impressive advice relates to digital marketing. The author astutely notes that most ecommerce ventures treat their websites like brick-and-mortar stores without using the digital tools at their disposal to compensate for the lack of a physical showroom and staff to guide the visitor to successful purchases.

The post March Ecommerce Digest appeared first on cleverbridge.

Why Adobe’s big cloud bet really isn’t a huge gamble at all | Gigaom – Earlier this month, Adobe announced that it was scrapping its on-premise Creative Suite in favor of the Creative Cloud. The announcement created a firestorm of controversy from media and users who were fearful that they would be limited to a web-based SaaS application. This blog post from GigaOm tones down the hype and gives a realistic analysis of the change in product versus the change in how revenue is captured.

Amazon’s new “virtual currency” of dubious benefit to customers | Ars Technica – For a while now, major tech companies have been experimenting with a variety of virtual payment methods. Facebook tried getting its users to buy Credits hoping that these virtual coins would be used to purchase items in webstores. It turns out that people prefer to pay with the currencies and payment methods they already use. Which is why Facebook closed that project midway through 2012.

Google Checkout attempted to streamline online shopping, and now that venture is ending. Like Facebook’s venture into virtual currencies, Google’s attempt to have sellers adopt an alternative payment method fell flat and is merging with a different Google ecommerce project – Wallet. The lesson we see again is that vendors and buyers alike prefer familiar shopping patterns to adopting the latest “new thing.”

And now Amazon introduces Amazon Coins. This new virtual currency can be used to monetize games distributed through the Amazon Appstore and Kindle Fire. And it has value as a way to engage customers through offering free Amazon Coins as promotion tactic. But ultimately, a tangible long-term benefit to ecommerce customers remains to be seen.

3 Key Google Analytics Reports for Ecommerce Merchants | Practical eCommerce – This post offers ecommerce managers several practical reports that track different events along a customer’s path towards conversion. There is advice on measuring traffic sources and building goal funnels at various points along the checkout process. The author provides a helpful link that will take you straight to your Google Analytics account and create a report for measuring conversion rates by day of week and by hour of day. By understanding broad metrics like overall traffic and then drilling down to details like conversion rates by day of week, you can better see where your strengths and weaknesses lie.

Channel Partners Are Embracing The Cloud In A Big Way – But Still Need Help | Forrester Blogs  – With the rise of subscription products in ecommerce, channel partners are finding big opportunities for selling subscription products. But there is also a strong need for channel partners to embrace a new role in how they interact with end-users and manufacturers. Some of the challenges include compensation models as well as more actively engaging end-users to promote customer confidence and loyalty.

How Should Your Mobile and Desktop Sites Differ? | Baymard Institute – In general, since mobile sites have a smaller display interface, their content should be more limited than its desktop counterpart. As this blog post indicates, limiting product selections and help sections on mobile ecommerce sites frustrates and confuses users to the point of abandonment. Still, the format and display of your products and FAQs are challenges and you must make sure your layout and formatting of these elements on a mobile site match the smaller screen.

Be sure to catch our posts from earlier this month, focusing on B2B ecommerce and Adobe’s shift to subscriptions.

The post May Ecommerce Digest appeared first on cleverbridge.

However, we often overlook how the cloud revolution affected channel partnerships. In the era of cloud computing, if vendors and their partners don’t update their channel strategy, they risk being marginalized.

What is the current situation?

There are a variety of channel partners in the software industry, and some common types include:

• Referral partner – A referral partner is like an affiliate program, in that the partner referrers its audience to buy the vendor’s product. Referring partners generally earn commissions upon reaching a certain number or conversions (CPA) or impressions (CPM).
• Authorized or value-added reseller (VAR) – In the software industry, a VAR acquires the vendor’s solution at a discount and resells the product to their customers for a profit. The VAR will often include the program on a piece of hardware that they also sell to the consumer.
• Managed service provider (MSP) – An MSP typically has a more advanced understanding of the vendor’s product than a referral partner or a VAR. Instead of building a special department in-house, many corporations rely on MSPs to figure out the company’s IT needs. This puts MSPs in a very special position vis-a-vis the vendor and buyer: They represent the vendor’s product and act as a dedicated consultant/maintenance team to the buyer.

In its most basic sense, channel partners function as an auxiliary marketing and sales team for ISVs by connecting customers to a vendor’s products. They typically have access to a target customer base the vendor cannot reach on its own. This situation provides the vendor a broader customer reach and earns the partner some sort of revenue for opening up new channels.

Corporate IT departments look to channel partners to help them not only decide how much to spend on a desired solution, but also help with implementation and customization.

Additionally, channel partners offer other benefits such as:

• Offering a local support option
• Building awareness for your product
• Providing market feedback

Compensating channel partners

“In North America, there are approximately 100,000 providers that provide IT services. Of this number, most are hardware VAR/resellers, and 15,000 to 20,000 would be considered managed service providers.” – viaCRN.

Excluding VARs, channel partners are compensated by the ISV based on a percentage of how many products they sold. ISVs like this approach because they were essentially paying for an outside sales team (channel partners) to find leads, convert them, support them and only paid out if the channel partner was successful.

But what happens in the era of cloud computing where subscriptions are the dominant payment method? What compensation models should ISVs use for their channel partners?

Compensating channel partners in the cloud era

Channel partners are seeing their businesses disrupted as cloud computing takes much of the installation expertise required out of setting up the solution. Cloud computing also simplifies customization and spreads costs out over many billing periods. In the same way that newspaper companies used to make money with their classifieds sections, channel partners need to reinvent themselves to meet their markets’ needs.

“…solution providers in the age of the cloud will…need to address compensation models that are quickly becoming obsolete in a cloud age where the life of any given contract is likely to span multiple years of revenue recognition.” – via Bridge Metrics.

This quote is from a blog post that discusses the implementation and billing challenges that software vendors and their channel partners face from the XaaS revolution. Now, a partner’s conversation with their customer needs to first start with what the corporate IT department is trying to achieve versus what they might ultimately buy. That changes the partner’s role from “representing” a few product lines to being a true service provider skilled in collaborating on many solutions.

Stefan Utzinger, the author of Channel Revolution, made us aware of this idea several years ago when we interviewed him for this blog. He said that in the era of cloud computing, channel partners will transform from VARs who sell, install and maintain a piece of software to MSPs who offer consultation and provide advice on how to use the software.

In that sense, the future of the channel partner is someone who builds a relationship with a client, is capable of quickly understanding new products the client is interested in, serves as a recurring expert for support and best practices, and gets paid a monthly fee that in total will be more than the one time fee they previously got paid up front.

Since the channel partner is actually doing more in this scenario, they will earn more revenue. Just keep in mind that they may make the initial sale, for which they previously earned all their commission up front. As the chart below shows, that model is unlikely to persist because in a SaaS/subscription the ISV is only making a fraction of the revenue each month. They cannot afford to pay commissions for life-time values when the revenue is only generated incrementally.

Revenue Paid for ISV Product by Year

Partner Commission Model

The Developer Channel

Another interesting channel to emerge due to the advent of cloud computing is the developer channel. SaaS companies like Box and YouSendIt offer typical partnerships such as resellers, referrals and MSPs, but also offer developers the opportunity to become partners of their solution by building out new apps through a distributed API.

Box offers three types of partnerships on their “Become a Partner” page:

Alliance – An MSP-like situation where the partner earns incremental revenue from providing support and service to Box users.

Reseller – A referral-like partnership where recurring commission is earned by hitting sales targets.

Developer – The partner earns revenue by building innovative apps through the Box API.

In the end, this isn’t just an issue for channel partners, but also the ISVs that must provide resources and compensation models that help their partners succeed.

Keystone

Because corporate IT organizations are procuring more and more cloud products, channel partners need to evolve their business to meet both the corporate IT department needs as well as the ISV’s product distribution model.

The post Compensating Channel Partners In The Era Of Cloud Computing appeared first on cleverbridge.

For software vendors, it’s important to know that businesses continue to replace traditional on-premise legacy software with innovative cloud-based products. In 2010, just 14% of businesses utilized cloud computing. In 2014, that number will rise to 41%, and by 2020, the cloud computing industry will increase to over $240 billion.

As the infographic explains, this trend is based on current business problems with IT infrastructure such as downtime, flexibility and running costs as well as the benefits that accompany cloud computing in the areas of scalability, reduced costs and management.

We already know that the issue of cost is of lesser concern for cloud buyers. However, even if cloud products are cheaper in the long run, that fact won’t stop IT departments from increasing their budget. Sometimes, lower prices have the ability to encourage more spending. This is especially true when cloud products deliver better usability and reduces the time it takes to deploy and scale a solution. So, while the transition from on-premise to cloud won’t necessarily reduce the amount of IT expenditure, by 2014, XaaS products will replace 14% of budgetary spending.

Why are more more businesses moving to the cloud? – An infographic by the team at Yorkshire Cloud

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With this month’s digest, we’re highlighting:

• Best practices for credit card payment forms
• Which security logos customers trust the most on shopping carts
• Ways in which cloud vendors can assist IT buyers
• How real time bidding for digital ads affects a CPA model
• Facebook’s new Graph Search and its impact on online advertising efforts

The Ultimate UX Design of the Credit Card Payment Form | Designmodo – No point in the buying cycle is more fraught with the danger of abandonment than the checkout process. And the payment submission form is the most vulnerable point in the checkout process. Since the vast majority of your customers are paying with credit cards, conversion friendly credit card payment forms are key to ecommerce managers. (h/t to faithful reader Mark Beare from Reviversoft for pointing us to this article.)

Which Site Seal do People Trust the Most? | Baymard Institute –  Everyone knows that protecting customers’ private information by complying with security standards is an e-commerce necessity. But consumer trust is also an important part of conversion optimization. Displaying site seals during the checkout process increases the perception of security and lets your customers know it’s safe to submit their payment information. But which seals do consumers trust the most? The answer may surprise you.

Citrix Sees Crucial Cloud Broker Role Emerging for the Channel | Bridge Metrics – Customers of SaaS products who work in IT are adapting their infrastructure and buying habits to accommodate the explosion of cloud computing. Given this fact, sellers of SaaS solutions need to embrace the role of broker, or as I would call it, adviser, explaining how their product or service achieves the goals of the buyer.

Is the CPA model holding real-time bidding back? | Econsultancy – In the world of digital advertising, the classic questionis whether advertisers should pay publishers on a cost-per-impression (CPM) or cost-per-acquisition (CPA) basis. With more advertisers wanting to focus spending that leads to successful conversions, the question seems to have been decided in favor of CPA. Nevertheless, publishers still face a challenge when it comes time for attribution. The challenge is complicated further when the costs of ads depend on real time bidding (RTB).

How Facebook’s Graph Search Will Dethrone Google Search | Advertising Age – Facebook Graph Search will certainly add more value to users’ Likes, Shares and Comments, but it will also increase the value of Bing search results. Additionally, Graph Search ought to improve the capabilities and accuracy of mobile advertising for brick-and-mortar stores. It will be interesting to see how Google responds to Facebook’s push for search dominance.

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The post January Ecommerce Digest appeared first on cleverbridge.

If you are considering a SaaS version of your product or if SaaS is already your primary offering, it is important to consider the various ways in which SaaS companies successfully acquire, monetize and retain customers.

Acquiring SaaS Customers

When it comes to monetizing SaaS products, you tend to hear people talk about freemium models and free trials. The truth is that freemium and free trials are marketing or acquisition tactics, not payment models. The decision to acquire customers through freemium and free trials aligns well with SaaS products that:

• Have potential to scale to millions of users
• Create strong network effect
• Can be supported by advertisements
• Produce high switching costs for users
• Offer a range of features or products
• Focus on B2C or SMB markets

SaaS companies like Salesforce, LinkedIn, and Pandora are good examples of successful organizations that posses several of the attributes mentioned above.  It is why they are able to acquire customers by offering free trials and freemium versions of their product.

Salesforce, which allows free access to their solution for a limited time, scales to millions of users, is business focused, has a range of features to induce free trial users to submit payment, provides a strong network effect and, consequently, results in high switching costs for the user.

LinkedIn shares many of the same features as Salesforce. It is business focused, relies on a strong network effect and has high switching costs. It is interesting to note that where Salesforce offers a free-trial to acquire potential customers, LinkedIn offers a freemium version of its product in the hope that users will eventually be persuaded to pay for the many features unavailable in the free version.

Similarly, Pandora, despite its recent warning of a decline in Q4 earnings, and though it does not possess as many of the useful characteristics as LinkedIn or Salesforce, is a SaaS company that offers freemium and premium versions of its product. However, where Salesforce and LinkedIn rely primarily on revenue from subscriptions, Pandora is supported by advertising as its primary revenue source.

Caveats to Freemium and Free Trials

Offering freemium and free trials may garner many users of your product, but that does not guarantee lots of revenue. The following issues need to be considered before you offer your product to a large audience free of charge:

• Free products attract large numbers of users
• Only a fraction of users become buyers
• Ongoing operational costs are associated with non-buyers
• It can take time to pay off
• It generally doesn’t fit enterprise market

Monetizing SaaS Customers

Regardless of how you acquire prospects, the key to any business success is converting prospects into paying customers. SaaS companies monetize their products in a variety of ways, the most popular being:

• Subscriptions
• Advertising/Sponsorships
• Virtual goods
• Usage based blling 
• API licensing
• White label

All of these are viable options for driving revenue through your product or service. Both Spotify and Pandora are SaaS companies that offer music streaming. While Pandora drives revenue through advertisements, Spotify does so through subscriptions. Zynga is an example of a company that relies on customers buying virtual goods. Apple, however, monetizes its iCloud with usage-based billing.

Retaining SaaS Customers

Successful companies don’t just acquire paying customers, they retain them. In a subscription setting, it is important to have a strategic dunning process in place. A good dunning process reduces churn by keeping loyal customers aware of the benefits of using your program. This way, they continue to submit payment on a consistent and predictable basis.

Like we said above, successful SaaS products often have a high switching cost. It’s important to point this out to your customers as subscriptions come up for renewal.

Both LinkedIn and Carbonite call out the value of their service and the repercussions of not continuing a subscription.

The LinkedIn notification uses the term “You will lose” three times in identifying a number of valuable features the user loses access to by not renewing their subscription.

In this Carbonite notification, the user is offered a sweet deal by renewing. It should be noted that this is a final message that comes after a number of dire messages informing the user that all their data at Carbonite is at risk.

No matter what type of program you offer, your dunning message should reflect the benefit a user gains in continuing their subscription as well as the consequences of canceling.

Keystone

Beyond the hype of how SaaS changes the way software companies design, deliver and pay for software, in order to be successful, businesses must focus attention on the best ways to acquire, convert and retain customers.

Doug Caviness contributed to this blog post

The post Three Keys to Success in the Cloud: Acquire, Monetize & Retain appeared first on cleverbridge.