Making a Flawless Transition to Cloud Billing

Many organizations pursuing lower overhead costs and improved customer service are adapting their business models to the cloud. However, some fail to realize that this move only pays off when monetization models change as well.

Productization, enrollment, payment capture and customer support are inherently different in a cloud environment, and go-to-market strategies have to reflect this. Billing — which touches every key part of the business from customer acquisition to payment — should be a key focus of those strategies.

To make a flawless transition to billing in the cloud, the following guidelines should be kept in mind:

1. Reduce the need for human intervention. Customers and prospects should be able to navigate your website to create an account, change their agreement parameters and access some basic help resources. They should be able to perform any of these tasks with ease. Provide them with a user-friendly, customer-driven portal and help them understand your offerings with visual heuristics. Save human resources for more complicated tasks, and you’ll cut down on expenses.

2. Design your product catalog to highlight the most popular choices. Gas station owners position their pumps so that the premium selection is placed where drivers are most likely to reach first. Online product catalogs can use similar placement strategies to guide customers toward higher-value offerings. Make these choices visually prominent. Leverage colors and purchase mechanics to guide the buyer toward the steps necessary to complete a selection. As with online games that reward or create an engaging experience, think about your purchase process flow. Offer additional products or selections based on a buyer’s profile or behavior, and imbue the process with simplicity. Communication during the purchase process adds a human element and can establish a connection with the buyer as well.

3. Make sign-up simple. Brick-and-mortar store owners don’t erect hurdles for customers to jump over to reach the cash register, and Web-based businesses shouldn’t either. Keep the purchase and sign-up processes simple. At most, include three steps, such as select products, review your purchase and pay for your purchase. Let your customers know where they are in the enrollment process at all times so they can see how easy signing-up will be.

4. Invite upgrades. If you are selling subscription-based solutions, allow customers to seamlessly accept free trials or upgrade packages. Make sure you have designed your solution for an upgrade path that can maximize your revenue.

5. Set expectations with customers. Provide email validation of purchases to set expectations at all times, and keep customers in the loop about new service offerings and packages that might interest them. Design the feedback loop to go both ways: Give customers the means to communicate with you so you can better understand and respond to their needs.

6. Make the most of your data. There are great tools like Google Analytics, Woopra and Adobe SiteCatalyst available to assess your purchase funnel and understand where and why people abandon purchases. If possible, determine if you can fix unique friction points.

7. Monitor your metrics. Two metrics that matter in the cloud: customer acquisition cost (CAC); and lifetime value (LTV). If companies are to achieve the economies of scale that make the cloud valuable, they must monitor CAC and LTV and adjust business processes necessary to keep these metrics on target.

8. Keep it PCI-compliant. Customers respond to security measures and appreciate the seriousness with which Web businesses take safeguarding their data. Make sure you have a PCI-compliant method to store sensitive credit card information.

9. Automate billing and deliver self-service options. In order for cloud-based companies to grow from 100 customers to 1,000, 100,000 or beyond, they need to give customers the option to self-select products and packages. This also presents a requirement for dynamic relationship management and billing. Businesses must be able to automatically close bills and provide customers with self-service views into their accounts without adding more bodies.

10. New business models can be lucrative, but don’t forget the value of old-school interactions. Want to learn more about your prospects? Go old school. If you’re starting a new business or growing an existing one, consider hosting dinner sessions in various cities to have live discussions with your best online customers. You’d be surprised at how they can help give insight.

As with all things related to the cloud, billing promises to serve the customer better. The right monetization choices must, of course, open new revenue streams and manage complicated sales. However, the right billing tool should also create customer satisfaction. By following a handful of tips, organizations can flawlessly transition their businesses (and their billing practices) to the cloud.

Mark Dudman is executive vice president of MetraTech and general manager of its SaaS division,Metanga.

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