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Turning Change Into Opportunity Through Adaptive Sophistication

Director of Marketing at Chargebee, helping organizations grow through streamlined subscription billing and revenue operations. 

On March 17, 2020, Fortune published an article (subscription required) predicting why online classes wouldn’t really work. On March 23, six days later, and for the first time in its history, all classes for undergraduate and graduate students at Harvard transitioned to online delivery. In the six months since, Harvard has had to revamp its curriculum and reevaluate its centuries-long traditions to facilitate its first 100%-remote semester. 

“This is a moment in time that demands unprecedented innovation and inspiration,” Nonie Lesaux, HGSE academic dean, told the Harvard Gazette

It’s not just Harvard. The global pandemic has redefined the way we live, work and learn. Looking deeper into education, 2020 has been the tipping point for e-learning. While investors have bet on e-learning for years, companies within this segment have struggled with large-scale adoption — until now. Many online learning businesses have been forced to scale their entire operations in weeks to catch up with the market surge. 

For other businesses, the pandemic has created constraints that push them to rethink their strategies in order to survive and retain customers. This dynamic has driven a stark divide between those that are able to quickly adapt to change and those that are not. 

The key for businesses to not only survive but to thrive in this new world is their ability to champion organizational change, move forward with new strategies, experiment with new business models and ensure that digital transformation happens at warp speed.

A new hurdle in successfully executing digital transformation for businesses has been the change in consumer behavior during the pandemic. Not only are people becoming increasingly comfortable with remote learning and working, but there has also been a massive shift in their buying behavior. As more people stayed home during the pandemic, they turned to online shopping to meet their daily needs, leading to a surge in e-commerce sales. 

According to IBM’s annual “U.S. Retail Index,” the pandemic has accelerated the shift to e-commerce by about five years. And the U.S. Census Bureau recently reported that e-commerce sales, which grew by 44% year over year during the second quarter of 2020, now make up 16.1% of total retail sales in the U.S., compared to 10.1% a year ago. 

Adaptability Is The Secret To Survival

Traditional business logic has always been about trading in adaptability to achieve process sophistication. While this higher degree of sophistication has enabled businesses to service increasingly complex sales cycles and product catalogs, the “new normal” has shined a light on the holes that come along with strict business models that are weighed down by robust processes that take far too long to change. In the case of Covid-19, many businesses unable to step away from their processes were forced to close. 

At Chargebee, we’ve always been strong advocates of the growth and resilience that a subscription business model provides, and we believe that a global “SaaS-ification” of the traditional enterprise is underway. Our company offers subscription billing software, and we’re finding that many large businesses today are looking to adopt the revenue-model flexibility and best practices that much younger upstarts have perfected in the software as a service (SaaS) world. 

Businesses running on on-premise software have had to transition to the cloud overnight; consumer buying patterns have shifted from one-time retail to recurring subscriptions for everything — from groceries and coffee to online workouts and guitar lessons. 

Some of the more agile and innovative enterprises have been able to capitalize on these new dynamics. For instance, Panera introduced a subscription model before businesses closed due to the pandemic, and it initially gained a sizable number of subscribers. When the company reignited the program in June, making it free to sign up for a limited time, Panera was able to gain 700,000 subscribers in a three-week span. It’s been so successful that the company is working on expanding the subscription program across other offerings.

The trend is going far beyond quick perishables and online classes, too. Today, luxury car manufacturers including Porsche, BMW, Mercedes-Benz and Audi are now offering monthly subscriptions to their fleets of vehicles. One of the main drivers for these subscription programs is to expand a company’s customer base and introduce the brand to a younger audience. For Porsche, 80% of its subscribers are new to the brand. For consumers, car subscriptions give them access to luxury cars and eliminate the hassle of ownership.

So, from coffee to cars, subscriptions are changing the landscape of almost every business looking to succeed today. 

Beyond Survival: Adaptive Infrastructure Is The Key To Predictability And Growth

Looking beyond Covid-19, businesses today are living in an environment of constant change — from the external disturbances due to market dynamics and competition to the internal turbulence brought on by tools, workflows and people who arise as a byproduct of hyper-scale. 

The key levers for a modern organization to turn this change into opportunity come from an organization’s ability to adjust its business model by launching new product or service lines, tweaking pricing packages and structures, entering new geographies and servicing new markets at the drop of a hat. By investing early in a subscription revenue infrastructure, a company can gain the flexibility to experiment, the sophistication to scale and the resilience that is needed in any market. 

This has proven true for two of our clients, realizing growth during a difficult year: Study.com capitalized on the overnight surge in demand for e-learning by launching into 18 new markets in under 90 days, while MakeSpace, an on-demand storage company, expanded into 20 new markets over the last year. 

Uncertainty and change are the new normal. But with innovative thinking and a business model that allows for adaptability, every change becomes an opportunity waiting to be unlocked. 


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