Subscribed 2015: Organizational Transformation: Building Your Subscription Culture

ORGANIZATIONAL TRANSFORMATION:BUILDING YOUR SUBSCRIPTION CULTURE

Ulrich Hermann CEO, Wolters Kluwer Germany

Agenda

Our Mission

What Drove our Transformation

The Organizational Requirements

Building a Subscription Culture

Lessons Learned

Key Takeaways

Q & A

“Wolters Kluwer’s mission is to empower our customers with the

information, technology, and services they need to confidently make and

follow through on critical decisions. ”

OUR TRANSFORMATION

PRINT PUBLISHING

• Legacy Business

• Transitioning to online

ONLINE SOFTWARE +

SERVICES

• Customer workflow

• Tremendous upside

potential

DATA ANALYTICS

• High disruptive

potential

• Internal + external

value

deliv

ere

d v

alu

e

Time

Expert Content

Transaction / usage data

In 2014, 80% of Wolters Kluwer global revenue is made up

from digital Solutions & Services.

SLIDE HEADER100

25

0

50

75

64

23

13

2013

68

20

12

2014

Revenues by media

(%)

Services

Print

Digital

100

25

0

50

75

25

75

2013

24

76

2014

Revenues by type (%)

RecurringCyclical

Source: Wolters Kluwer 2014Annual Report

So, what happened?

1980’s

Business was all about producing and selling a

good product on marginal cost…

Marketing & Sales:

Promotion of single products with direct mail, retail

marketing, advertisement

Sales via retail’s “bookshelf”

Direct marketing & sales of subscription

Value of a Single Product:

Renowned authors

High quality content

Index + taxonomy

In a product centric business, we sold content into the print-

customer’s shelf…

INCREASED PRESSURE ON

CUSTOMER PRODUCTIVITY

flat rates

tenders

access to legal services via the internet

insourcing of legal services to corporate legal departments

global firms enter the market

1. The client does not necessarily go to a

lawyer

2. Prices for standard services will erode

MORE PLAYERS

COMPETE FOR

MARKETSHARE

SLIDE HEADERTHE MARKET WILL LIBERALIZE

Technology trends changed customer requirements.

Customers today have new expectations

Personal Real-Time Immediatefulfillment

On Going Value

Memorable Services

What did this mean for us?

2010’s

HEADING

Section break slide

“Our value proposition changed from ‘Content Source’ to ‘User

Experience’. ”

Controlling content vs

Enabling experiences

Enabling a Unique Experience

• Technology

• Intuitive workflow

• Ecosystem

• Relevance

• Productivity

Controlling Content

• Access to author driven content

• Opinion leadership

• Community membership

• BrandREQUIREMENT: Radical innovation

REQUIREMENT: Radical innovation

At the core of our business model is the customer experience.

Customer Workflow

Print Media

localsearch/understanddomainsmediaavailability

Product driven

Content:Competence:

Editorial:Formats:

Value:

Digital Media

Customer Lifecycle driven

Customer Workflow

Solutions

integratedserve/solvetaskssolutionsproductivity

Old

New

THE OLD VS. NEW WORLD

product

customer

1 yR subscription (Jan.-December)

or One time purchase

by piece/license

offering

features

Customer hunting across channels

internet search

usage

FreeRegister

Voucher

1 – 2 mo trial

subscription per month subscription per quarter subscription per year

“Building a business model around the customer experience requires organizational transformation. It means building a subscription

culture.”

guiding customers through the right

channels…

training and coaching every employee in Customer Lifecycle Management (CLM)

related workflows…

What it takes to build a

subscription culture…

Aligning marketing, sales and service

around the customer experience…

streamlining the customer experience

across all touch points…

enabling ERP to automate multiple subscription based business models…

SEO/SEM/SEA/Social Media

▪ Customer Journeys▪ Topic related

education centers▪ Quality content

Ease of Use

Comprehensive functionality & quality content

▪ My Document Library

▪ Quality contents / newsletters

▪ Reminders in case of legal changes etc.

AGILE DEVELOPMENTThe underlying principle of our

product development

(re)definition of the problem we hope to solve

(re)identification of the customer

testing and iterating on business assumptions, positioning, feature requirements, marketing and sales tactics

research the market, analyse customer, interpret usage reports

Customer Development

measuring product use

elaborate feature, user experience (main success and alternative scenarios), interface design

release new and different functionality to the customer as quickly as possible

assuring reasonable product quality

Product Development

AGILE DEVELOPMENT Shifting the focus from product features

to an agile process comes from the top

down

based on minimal viable product (MVP), steering committees, etc. focus on:

efficiency (management resources)

and

effectiveness (CPA’s & CLVs)

as they relate to the agile process

Management Focus

plan

requirements

analysis & design

implementation

test

evaluate

initial planning

customer feedback

Deployment Minimum Viable Product

Source: Steve Blank,Why the lean start up changes everything, Mai 2013, Harvard Business Review

The established global firm can help create competitive advantage for a new venture at every stage of the entrepreneurial lifecycle.

CREATING COMPETITIVE ADVANTAGE

IN THE STARTUP PHASE

yield asymmetric market insight

uncover problems and provide critical resources for a solution

capital and business functions as well

access to supply chain, distribution networks & other critical assets

negotiate and leverage market participants

IMPROVING RISK MANAGEMENT

being part of a bigger portfolio

pilots, trials and testing with existing customer base

EXPANDING THE VENTURE’S

EXIT OPTIONS

recycling the venture into different product / business

spinning-off, licensing, white label

integrating into an existing business unit

carving it out as a new business model

Focusnear term performance

large business units

BE AWARE a corporation protects its core business

while applying proven concepts

Minimizesmall up front investments

business on standards

Avoidfailure perceived as a career-ending event

incentivize a decision making structure that avoids

risk

Protectsupport for new ventures coinciding with

economic cycles, management interest and

budgeting

Key behaviors to maximize return

on invested resources

Lessons learned? Identifying potential roadblocks.

HEADING

Section break slide

“Transformation is possible only, if top Management introduces a perspective

for a new business model.“

POTENTIAL ROADBLOCK: FINANCE

“(Publishing) Business in the future is about customer value and experience --

not merely domain knowledge and expertise.“

POTENTIAL ROADBLOCK: EXPERTS

HEADING

Section break slide

POTENTIAL ROADBLOCK: BACK OFFICE IT

“Startups develop business from the customers’ context, established

corporations develop business from existing core capabilities.”

POTENTIAL ROADBLOCK: THE ESTABLISHED CORPORATION

“The established corporation can be the enemy of any startup venture.”

KEY TAKEAWAY

Work with agile concepts in marketing and product development to avoid late and expensive failures and constantly pivot the business model and solution.

KEY TAKEAWAY

Managing a Customer Lifecycle rather a Product Lifecycle requires a different DNA across all company functions.

Q & A