A Dive into the Subscription Economy

The subscription economy, a term coined by Zuora, describes the fast rising, relatively new business model and companies that a huge part of the western world is familiar with the model through Netflix, and other on-demand streaming services. The subscription-based models allow for users to either, pay-as-they-go, pay per subscription monthly, or via a long-term contract depending on the strategy applied by a subscription economy company the overall point is an increase in flexibility.

A rise in preference for temporary ownership vs. permanent ownership can be seen across the board, Rent the Runway is an example of a great success in the evening wear department doing away with large scale permanent investments and opting for an online rental model. SaaS companies and software vendors are an obvious example of a sector taking full advantage of the subscription based models, this includes Office 360, or Adobe Photoshop whom started out in a more traditional permanent ownership state. The customer-seller relationship shifts from one off to monetizing long-term relationships over shipments, this puts a stronger emphasis on continued growth and betterment, and that is a great thing for the consumer.

The key details to focus on are, you need to know how many people you can speak to, how many customers you can keep, and how much revenue you can generate per customer. Moveover you need to know all of this in detail, and in real time.

The life and well-being of a company is now defined by consistent, positive interactions with each and every customer.

As always companies are looking for leverage in today and tomorrow’s subscription economy this starts with tracking subscriber IDs and formatting your data around them. You need to define each user’s value, upsell opportunities, and in some cases downsell as not to lose them completely.

Do not forget to focus on user experience! Improve over time, stay fluid, continue making your visitor experience more easy, and user-friendly remember outcomes not asset management.

Gartner estimates have the subscription model growing to 80% of all software providers having shifted by 2020, and the IDC predicted that by the end of last year 65% of the world’s largest enterprises would have committed to becoming information-based companies. So many of us are shifting from product sales to on-going services. Titles like Customer Success Manager are becoming the norm:

Introducing the New WIRED Series ‘Is This a Real Job?’

Selling on-going services online will require a shift in the way online stores have worked, billing is now recurring, and a purchase is only the beginning of your customer journey. Expanding on this idea is the shift in need of a large “sales team”, salespeople need to be come customer care providers and coaches.

This is why we at Pilvi focus on making the initial sale an automated process, we believe that real value is provided after the order is sent. Help buyers get the most out of your platform by showing them how, that is how you convert shoppers to loyalists.

As always we’d love to speak more on how we can help you get into position to make buyers loyal subscribers and long-term relationships. If you disagree with the above, we’d love to hear why and what on as well!

Get in touch with us and let’s start building our relationship, let’s make you and me an us.

Yours,

Pilvi Cloud Company

Adapting to a New Environment

In the beginning of 2014, Finnish hosting company Louhi Networks began recognizing that with the insurgence of global cloud service providers into the local hosting scene, hosting companies would be forced to adapt and re-position their offering or face the prospect of being out-priced and over-run. Companies like Google and Amazon with cloud and AWS servers were making hosting purchases and server setup leaps and bounds easier than ever before. Not to mention scalability, automation and cost effectiveness compared to traditional environments. 

As part of a 5 year contract with Pilvi, Louhi Networks worked to improve their digital offering with a new online sales channel enabling a new way to sell all of their product offering through one fully centralized place. With the change their customers can order Domains, Webshops, Virtual Servers, and products from Amazon AWS, F-Secure, Google, Microsoft, Softlayer, alongside their own offering and customer service support.


Louhi represented an early adapter in the hosting field, having recognized the need for change and adaptability in the coming market. Through careful strategizing they chose to implement a self-service model. By automating much of their sales and adding to their offering by reselling some of the most  sought after hosting solutions at the time they were able to relieve much of the pressure from traditional field sales, and expand their product portfolio exponentially.

At the time of implementation they set goals of growing their online sales by 20%, now after the first year of use these goals have been reached. At best same month sales jumped by nearly 50% in comparison to their prior solution. They’ve now been able to set further goals in again expanding their product portfolio from the current around 100 to 500 products in 2019, including many SaaS solutions that fulfill modern working environment needs.

Through these changes they were able to position themselves to become a broker of the most sought after global cloud service products, and create a marketplace where new products for resale can be easily added on to. They have not completely abandoned what they do best either, with the influx of new tech and services people will need support in how best to use them. That is why Louhi has been able to keep their customer support team at the forefront while become a virtual one-stop-shop for  all of a new business’s needs.

What is self evident, is that a change will always be on the way, often times people resist and fight change, when embracing and adapting could more often than not be the best course of action. Louhi was able to bravely do this, perhaps you in your own business should look in to the same.

“The experts at Pilvi had an excellent understanding of eCommerce as well as deep knowledge of the hosting business and our individual needs. This new webshop is a huge step forward for us. Of particular interest is bringing large international cloud services while offering our local Finnish support, we believe this will be of great interest to our customers as well.”

Says Mikael Kääriäinen of Louhi.

Written by:

Pilvi Cloud Company

 Visit:

The Louhi Store to see more.

Stumbling Out of the Blocks


I’ve been conducting sales with Pilvi for the past half a year now, and everything has gone pretty well. The basis being, we have found a Product/Market fit, and the extent and content of our message has resonated fairly well for many SaaS companies. However, there has been some sluggishness out of the gates.

I’ll attempt to keep this piece positive, but I need to raise an issue come across all too often, time or the lack thereof. Being too busy to do everything but the things that would help make you less busy. Being too busy walking, and having no time to buy a bike.


People tend to have many different things keeping themselves busy in their personal lives, and that is not something I am getting into. I am focusing on the matter in a business development sense. So when you are in too much of a hurry to do it all, you have no time to do what really helps the business in an ever-changing world, which results in sluggish growth.

“We are currently so busy selling in the field, (…that we have no time to think about online sales automation.)”

A bike is an investment of course, one that costs money, while your feet are free. And the wear and tear on your shoes only gets noticed once you feel that stabbing pain in your heel.


Change is scary — but e-Commerce of services is already here!

Trade in services (Software, SaaS, IoT) is nearing a big breakthrough. It is the second phase of e-Commerce, web-shops for services. And again just as was the case 20 years ago, when we attempted to bring webshops to chains (“No One buys clothes online, they need to be tried on.”), they are not interested in investing in webshops. There seem to always be grounds for reasoning that the world will not change, or at least we do not need to change with it.

Too often, I seem to hear the following from software companies, at least here in Finland:

“Our product can’t be sold online.”

“Our product requires demonstration, customization, or instruction.”

“We aren’t ready (…as we are busy doing everything else).”


At some point, I cynically thought that it was laziness or a lack of understanding, but I’ve come to realize that these are not the real reasons. The reason seems to lie in strategy, or lack thereof, or a failure to comply. When there is no clear direction, we wander, experiment, tinker, and build.

At this point the proofreader told me to say something positive. Fortunately creating a strategy does not require a miracle. Getting mobilized can begin with reading a good book on the subject, here are a few of my personal favorites:

Crossing the Chasm — Geoffrey Moore

Good to Great: Why Some Companies Make the Leap… and Others Don’t — Jim Collins

Blue Ocean Strategy — W. Chan Kim & Renee Mauborgne


And the situation is not entirely bleak. Many are already well on the move, especially young startups that develop their own SaaS product. Here the sales models are created to take place directly online, even if supported by direct sales in the beginning.

Trials and sales automation are a scalable foundation for growth. If a company’s most important strategic objective is not Customer Activation and Sales Automation, it would be worthwhile to go back to the drawing board. A bold statement of course, and while this may not always be the case for everyone, if you are looking for scalable rapid growth this would be the model I would choose. So choose the most effective sales model, and a product which fits it.

As such, if the product can not be sold online, the product needs changing. If it requires presentation, customization, or instruction, then it is too complex and requires simplification — make an MVP you can sell online. If you are not yet ready, stop and think about what all needs to be done, and above all, what can be left undone.

That is how strategies are built, choosing what not to do. In the end the path is as clear as the goal — learn how to ride that bike.

Tapio Talvisalo

-SaaS Enthusiast, Builder of Cloud Castles