By: Mark Walker, CEO, Nue
B2B SaaS is going through a revolution that represents a significant change from the monolithic subscription models of the past. Tighter cash management, the emergence of AI-based features and a greater focus on unit economics is causing B2B providers to re-examine how they land, grow and retain their customers.
That has given rise to a new way of thinking about revenue. The concept of the “revenue lifecycle” focuses on maximizing revenue wherever possible by viewing the customer revenue journey as an ongoing, holistic process.
One of the main problems that B2B faces when it comes to revenue is this. Modern sales solutions are a fragmented collection of different – often incompatible – tools for each function, from quote to billing. Getting customer and revenue data across all of those tools is burdensome and inaccurate. Therefore, many companies aren’t able to increase customer lifetime value because the actual process of guiding customers through upselling, renewing, and billing is clunky and requires too much manual work to scale.
Now, we’re seeing a new solution emerge: revenue lifecycle platforms. These unify every single stage of customer and revenue journeys, from CPQ to billing. More importantly, these platforms empower users to boost revenue long-term by enabling revenue leaders to seize key moments of opportunity, experiment with pricing and packaging and seamlessly renew and upsell customers without any lengthy reconciliations.
The confidence that you can quote, bill and manage any revenue model is a growth superpower for B2B SaaS. Here’s a primer on the new revenue lifecycle era and how it will impact businesses.
1. How to integrate revenue lifecycle solutions
Today’s companies are operating with a Frankenstein-ed stack of different SaaS products. Because each tool works with different data models and processes, getting (for example) your CPQ engine to connect to your billing engine has typically required a lot of manual work or complex integrations. More troubling, however, is that the incompatibilities between the models can actually limit how you sell, what you can sell and the steps you can take to land, retain and delight customers.
Companies have scaled on top of these inefficient systems, sure, but at a time when capital was far more readily available and pricing model competition was much simpler. It’s infeasible at scale to give customers the flexibility they want without having an integrated data model to play around with.
Emerging tools are helping companies get rid of the patchwork of tools they’ve been operating on, so they can instead adopt a single system. All processes from the start to the end of the customer’s revenue journey – so from quoting a product to invoicing – run on the exact same platform and reference the same data.
That means there is no break when it comes to data and commands passing from one stage to the next. There’s no manual stitching of processes or lack of visibility into what’s going on, and modifications can be made at any time.
Moving over from existing platforms and organizing the huge amounts of messy data they’ve generated requires coordination across the company to get the transition underway, but it opens up opportunities that will bring SaaS to the next stage of its evolution.
2. What’s the wrong way to do it?
There is a difference between simply managing the revenue lifecycle, and hosting the entire revenue lifecycle on one platform.
“Owning” the revenue lifecycle means having total control over every element of the revenue journey. But many of today’s solutions only have the illusion of control. Some tools can help companies coordinate the different modules that run each process – quoting, sales, renewals, invoicing, etc. – but don’t actually make them run as one. Such tools don’t solve key issues surrounding siloed data and a lack of flexibility. You still can’t be confident that a change in CPQ won’t immediately break billing.
For example, Salesforce’s Revenue Cloud offering (i.e. Salesforce CPQ and Salesforce Billing) manages revenue-focused processes with software from one company, but is not a unified model. The billing system was acquired and bolted onto the CPQ solution. Even though they are sold by the same team, there is no unified data model, which makes the two products unexpectedly difficult to use together. Of course, trying to get Salesforce CPQ to work with other billing systems is even more complex. This can result in rep dissatisfaction, complex and expensive customizations and integrations, and difficulty testing and introducing new pricing models.
This stops teams from being able to play around with pricing, mid-term changes and hybrid bundles without potentially causing chaos across the chain. Yet today’s customers want to experiment with SaaS plans and pricing.
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What enterprise SaaS needs is a platform where all the processes that form the revenue lifecycle, from quoting to billing, operate as one. One that allows the business to own the revenue lifecycle so they can manage and customize it as they please.
3. Businesses will meet customer demands for flexibility
Modern integrated revenue lifecycle systems such as Nue and Salesforce’s emerging RLM or Revenue Cloud Advanced solve this problem by unifying pricing, quoting and billing across the whole lifecycle and across all channels. This enables companies to serve different markets in different ways while minimizing complex integrations.
The most exciting part about taking ownership of the revenue lifecycle is that it allows enterprise SaaS to have unprecedented control over its offerings. A company’s selling point no longer has to be just its product, it can also be the flexibility of its pricing models, its ability to accommodate customers’ mid-term needs, and its combination of self-service and sales-led buying journeys. In other words, it can become far more customer-centric.
SaaS typically shy away from offering customers alternative pricing and purchasing options that weren’t already baked into their platform because of the manual reconciliation this implies. After all, you can’t test a pricing model without committing to actually support the customers who buy it. As a result, the more agile and flexible companies are able to win more market share, grow faster and retain more customers.
With the right revenue lifecycle platform, companies can offer their customers pricing customization via self-service platforms. They can enable sales reps to tinker with contracts mid-term in response to customer demands.
Another game changer is data visibility. Unified platforms empower teams with far more cohesive data insights than they’ve ever had. Reps no longer have to ask themselves how a customer’s spending behavior is changing – it’s all within reach, out-of-the-box. Which means they have the ability to assess those behaviors to detect the right time for an upsell or cross-sell, or step in when a customer may require a change in plan.
The emergence of comprehensive revenue lifecycle platforms has the potential to redefine how B2B SaaS run their revenue operations. While the transition from today’s chaotic tech and data stacks will take time and effort, it will finally allow B2B to get closer to its ultimate goal of exceeding customer expectations.
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