New Services Economy Sees Digitization of Products Into Services
Digital commerce solution Avangate's Fall 2014 release is aiming to help companies move beyond traditional payment transaction models and increase long-term customer revenue and retention with the introduction of more than 200 new features.
The most noteworthy feature is likely Avangate's new Revenue Recovery Tool (RRT), an add-on that brings together extended credit account updaters, retry logic, gateway failure/ intelligent payment routing, as well as bundled advanced third-party tools leveraging direct bank integrations and big data analysis. The add-on on will prove attractive to those seeking to improve conversion and retention for recurring revenues that are lost due to passive churn and limitations of working with a limited set of processors. Avangate indicated that typical recovery has averaged 20 percent of lost orders with early adopters recovering over 40 percent of churned revenues.
Avangate also released research which explores how buyers are transacting and interacting with online service providers.The data (seen in the infographic published by the company below) seems to indicate that there is a rising demand among consumers for longer-term relationships and reveals the failures of existing point transaction payment systems. For example, 46 percent of consumers refuse to purchase online subscriptions without a freemium option, while60 percent of consumers have set up at least 1-2 recurring payments.
"Today, we are seeing the digitization of products into services -- what we are calling the 'New Services Economy' -- and it's spawning the next generation of Software and Online Services companies that are redefining commerce," said Carl Theobald, CEO at Avangate.
"For these new Service Providers and vendors, the ability to truly monetize their offerings is no longer about point payment transactions with the customer, but rather being able to interact, service and expand the relationship with the customer from the discovery, trial, and add-on and retention phases - all of which are potential opportunities to make purchasing decisions. Our focus has been about serving these innovators who are launching new products or services and looking to build long-term customer lifetime value and recurring revenue streams."