The cloud is changing a variety of customer interactions, one of which is the purchase process. We've seen a shift from buying, to renting, and now to subscribing.
Consider movie viewing as an example. Years ago, to watch a movie at home, we bought a VHS or DVD. Shortly thereafter, we went to Blockbuster and rented the movie. Today, many subscribe to Netflix, where they pay a monthly fee and get unlimited rentals.
This change is happening across many industries, including those providing business-to-business products and services. In the report titled, "Sizing the Cloud," Forrester predicts the "global market for cloud computing will grow from $40.7 billion in 2011 to more than $241 billion in 2020."
This shift is impacting the role of customer strategy consulting. Historically, customer strategy consulting has focused on predicting repeat purchases by identifying which customers are likely (or not likely) to purchase again, when the need arises.
With the cloud, customer strategy consulting is focused on protecting the ongoing and recurring revenue. It is focused on predicting which customers will continue their service versus those who will cancel.
While there are many similarities between the historical role of customer strategy consulting and the role for companies with cloud offerings, consider these differences.
- The switching barriers are minimized for cloud customers, shifting the risk from the customer to the company. To help protect their investment, the company needs to have an intimate understanding of their customer segments, sophisticated analytics to understand and predict renewals within each segment, and systems or business processes that optimize the renewal potential.
- For many cloud-based companies, one sales manager could have many customers. Having a clear line of sight into each customer becomes difficult, if not impossible. Companies need a system that leverages the various sources of customer information to help sales managers prioritize where and how to spend their time.