Three Elements To Transform Your Subscription Business

The True Cost of a disconnected System

Sustaining growth in B2B subscriptions is about balance. My premise is there are three interconnected elements of B2B subscriptions:

Results | Solution | Team

The implication of interconnected elements is…they can get off balance.

Especially if you don’t see the elements you need to balance.

And what happens when your subscription business operates with disconnected elements?

Let me paint the picture of what’s really happening behind your metrics:

The Financial Impact

When product, customer results, and team alignment aren’t connected, in my experience it means:

• Extended implementation timelines delays value realisation by 3-6 months
• Customer “Success” teams spend more than half their time in a fire fight and renewal scramble
• Expansion opportunities get pushed back 2-3 quarters or left until the renewal is “a done deal”
• Renewals become negotiations instead of recurring agreements (this is a renewal game after all)

For a typical mid-market subscription business, this translates to:

• Price rises (an element of Net Revenue Retention) masking Churn (Gross Revenue Retention)
• Longer payback periods (the amount of time it takes to get back the cost of acquiring a customer)
• Millions in unrealised revenue growth but disguised by impressive sales results

The Compounding Effect

The bigger issue is not creating a compounding effect – this holds back your entire business:

For Investors and Board Members

When the three elements aren’t connected, your business appears fundamentally less valuable:

• Valuation multiples decrease as growth predictability suffers
• Cash efficiency metrics deteriorate with longer sales and implementation cycles
• Strategic options narrow as capital becomes more expensive, not great with modern interest rates

For Leadership Teams

The disconnection manifests as seemingly unrelated challenges:

• Sales cycles lengthen as prospects hear mixed messages from references and their network
• Product roadmaps become reactive rather than strategic (I need ‘product-x’ to get this big deal)
• Resource allocation becomes difficult to optimise (We need SDRs to get lots of meetings)
• Forecasting accuracy decreases as behaviour becomes less predictable (They said it was done)

For Customer Organisations

The impact extends deeply into your customers’ businesses:

• Value realisation is delayed or diminished (your teams need to talk to each other…)
• Internal champions lose credibility when promises aren’t kept (you said that last time…)
• Budget justification for renewals becomes increasingly difficult (they used it a lot…)
• User adoption is below expectations (because we added seats to justify the price rise…)

Transformative elements

When you properly connect product effectiveness, measurable customer results, and team alignment:

Virtuous Cycles Replace Vicious Cycles

• Implementation success leads to early value realisation
• Early value creates champions at multiple levels
• Multiple champions drive deeper adoption
• Deeper adoption generates measurable outcomes
• Measurable outcomes facilitate easier expansions
• Successful expansions strengthen your market position
• Market leadership attracts better customers

The Metrics That Matter Transform

• Gross Revenue Retention climbs above 90%
• Net Revenue Retention exceeds 100%
• Customer Acquisition Cost payback periods shrink below 1 year
• Must Have Score (TM) shift into the 8-10 zone

Missing the Connection

This sounds obvious – but that’s because first principle thinking is meant to get to the most simple position.

Most subscription businesses never successfully connect these elements because:

1. Organisational structures create natural silos between product, customer success, and sales
2. Incentive systems reward departmental success – bagging new business – not customer outcomes
3. Measurement systems track activities rather than value connections – inputs over outputs
4. Leadership focus shifts between growth and retention, not addressing the underlying connection

Now More Than Ever

In today’s market:

• Customer budgets are under increasing scrutiny
• Switching costs are decreasing as alternatives suppliers proliferate
• Value expectations are rising on both sides (provider and customer) as solutions mature
• Growth capital is more expensive and demanding clearer paths to profitability

The businesses who connect these elements now will create sustainable competitive advantages, ones others cannot easily replicate.

Strategy of Connection

When you connect these elements effectively:

1. Your customers become your growth engine rather than a retention challenge
2. Your teams operate with greater efficiency and higher satisfaction
3. Your product evolves based on value delivery rather than feature competition
4. Your business model strengthens with each customer success

Subscription Leaders Ask

Are we addressing the symptoms of disconnection or are we knowingly connecting the drivers of sustainable growth?”