March 31, 2021 | Authored by: Jesus Luzardo
The rise of the CSO – chief subscription officer
During the pandemic of 2020, the world turned to online shopping.
That’s old news already.
Now, we can see a tectonic shift in the way that brands and consumers relate to one another: The accelerated rise of the eCommerce subscription model.
And that’s leading to another radical change, one that you probably can’t see yet. It’s going to shake up the way the C-level operates, and we’re all going to have to adjust.
But let’s not get ahead of ourselves.
First, let’s see how and why we are headed to this new C-level persona.
What really changed in the past year?
For consumers, the idea of visiting a physical store is not the absolute it once was. Now, from the comfort of home and the leisure of 24/7, it is easy to purchase anything, with a few clicks.
For businesses, real-world tactics like product positioning, store layout, and interactions with sales staff were once ways to connect with customers. No longer. Today, businesses in all verticals are turning to the eCommerce space. But interacting with customers online in an effective way that generates ongoing sales is tough.
Subscriptions as a function: Solves a lot of problems
90% of purchases are one-off occurrences. This is simply not enough for businesses to maintain a sufficient, predictable revenue stream. In an eCommerce space populated by billions, the effort and resources to keep acquiring new customers are too much to bear for the average company.
That explains the global boom in the subscription model, expected to grow from $4B in 2020 to $7.8B in 2025. Alongside the rise in digital media subscriptions and box subscription offerings, legacy brands, such as Gillette and Microsoft, are also shifting towards a recurring revenue model to help assure long-term income.
Yet the subscription model puts a different kind of pressure on businesses. Getting a customer to buy once and convincing them to subscribe and have their credit card (or other stored payment method) automatically charged every week or month, are two very different kettles of fish. So much so that we believe an entirely new position will arise in the C-level ranks to manage it.
The new CSO: Merging relationships and revenue
In business today, there are typically three main individuals responsible for boosting sales and maintaining profitability: the CMO, the CRO and the CFO.
The CMO’s job is to ensure the integrity and functionality of the brand. This includes customer acquisition, retention, development of the brand story, as well as creating high-quality, smooth brand experiences. All of these fall into the realm of customer “relationships.”
The CRO oversees all the company’s activities and teams that generate revenue streams. Whether it be sales, development, marketing, operations or customer success, the CRO has their finger in many pies at all times. This role clearly covers the realm of “revenue.”
For the CFO, the big story is the bottom line. This individual is tasked with assuring the company’s financial viability, devising strategies to increase the customer base, maximize the use of resources, and improve profitability. Like the CRO, the CFO belongs to Team “Revenue.”
In the subscription-based model, however, relationships and revenue are intricately entwined on a long-term recurring basis. There is no separating the two. That’s why we envision a new role in the business management world: Chief Subscription Officer.
The future subscription manager: A sign of the times
As subscriptions become more ingrained as an effective profit driver, the need will arise for a dedicated individual who will own the subscription ecosystem and develop strategies for actionable growth.
This is not something that can be handled by the CMO, CRO or CFO. Why? Because these positions operate in their own worlds, while the CSO functions as a hybrid mix of all of them.
- For CMOs, the question is, “How can we show the customer that we are the best brand?”
- For CROs, it’s “What can we do to generate more revenue from each customer interaction?”
- The CFO asks, “How can we ensure financial viability and maximum profitability from every customer and business activity?”
- While for the CSO, the question is, “How can we show the customer that we are the best brand for them for the next five years, month in, month out, no questions asked?”
While the others are planning the next quarter or the next year, the CSO is looking at relationships and revenue for the long term.
Value: how to make customers feel it
The ultimate responsibility of the CSO will be to offer customers more than just membership. It will be to create relationships that make customers feel that their subscription is safe, reliable, and adds comfort, excitement, and/or convenience to their lives.
When a customer fails to renew their subscription after three or six months, the CSO will be at the frontline, figuring out how to get them to return. What bundle is the most attractive to this particular customer at this time? What combinations of products, services, and experiences can make this customer feel that tangible value from their subscription?
This is the terrain that future CSOs will be traveling, and Vindicia will certainly be along for the ride.
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