New Business Models Require a New View on Customer Relationships, Flexera Software Study Finds

The report will help product and customer executives at software and device manufacturers better understand the relationship between monetization and customer relationships.

“It is clear: software suppliers that place their customers front and center will be tomorrow’s winners. In today’s evolving software economy, vendors can’t hide behind a single perpetual transaction or interaction with a customer. With flexible subscription and usage-based models, supplier success depends on customer growth, which leads to renewal and advocacy,” said Nicole Segerer, vice president of global enablement at Flexera. “Even with evolving complexities, most suppliers realize that customer relationships; open and transparent communication; and continuous delivery of real, tangible value in products drive business success.”

Key highlights from the Monetization Monitor: Monetization and the Customer Relationship report include:

• Growth in Models that Lead to Higher Customer Engagement: With subscription and usage-based models comes a demand for consistent, persistent level of customer engagement, supported through compliance and transparency. Suppliers are choosing models that require more engagement: 31% of respondents currently use subscriptions for more than half of their licensing and almost half (48%) plan to increase subscription licenses in the next 24 months; 25% currently use usage for more than half of their licensing and 43% expect to increase usage models in next 24 months.
• Customers Want Transparency into Actual Usage: While some customers (20%) already have full transparency on their usage, an even larger group (48%) is asking for usage/utilization data.
• Audits and Overuse Still Exist: Customers look for clarity into how much usage is allowed and how much they have used. Suppliers can help by clearly defining terms of use, such as number of users, volume of service, sign-ons, etc. Though overuse and non-compliance have long been possible through other monetization models, the models growing in popularity present new challenges. Audits will be added by 19% of respondents, which may be the result of limited visibility into usage and, for a small percentage of companies, might be due to a significant loss of revenue due to overuse. In stark contrast, 5% of respondents are removing audits.

 
Previous reports in the Flexera Monetization Monitor series are:

• Monetization Models and Pricing
• Usage Management & Insights
   

Methodology

In 2019 Flexera conducted a global survey among software suppliers, specifically asking for monetization, licensing, and pricing trends in the industry. The survey was undertaken globally. Of the 321 survey respondents, 24 percent are director and above; 31 percent are manager/team leader, and 45 percent are individual contributors. Responses were provided both by Flexera customers and non-customers.