The new steps in the Subscription Funnel

The new steps in the Subscription Funnel
21.10.2019 Rainer Wiedmann

The old Sales Funnel is no longer sufficient. That’s because it is not reaching far enough in an Economy of Things defined by connected products and subscription-based business models. Therefore, iq! created the extended Subscription Funnel. Our Blog Article “The sales model for the Economy of Things – the Subscription Funnel” explains the reasons for this necessary transformation of the classic Sales Funnel. Now we want to take a closer look at the new steps within the Subscription Funnel.  

What to do in the new steps of the Subscription Funnel?


The new Subscription Funnel by iq! Management Consulting
Source: iq! Management Consulting

In the new Subscription Funnel four steps are added after the sale of the product.

Usage. In order for the new part of the funnel to achieve any value at all, the customer must use the product. Initially, though, a hurdle has to be cleared: connected products usually contain software. For intensive use to occur, it must be installed correctly. With complex products or ecosystems this becomes a challenge. Often customers cannot easily set up the system operation independently. As many manufacturers lack mobile service teams, some resort to the help of subcontractors. The smart home company Somfy, for example, entrusts selected electrical installers with the installation of its own intelligent systems. Others rely on their own staff: the tool manufacturer Hilti set up its own sales and support teams for its networked service “ON!Track”, which support the customer during the set-up process.

Service. Connected products differ from their analogue counterparts primarily through additional services. To generate real added value, manufacturers need to understand exactly how and why their products are used. The usage data that is transmitted is indispensable for this purpose. Yet even this is only of value if the right questions are asked and the relevant analyses are performed. Many Economy of Things products still have major weaknesses in this regard. In the Blog Article: “The Role of Apple and Google in the Connected Car” we analyse the range of connected products that come with the Connected Car, e.g. concerning Traffic Safety or Connected Infotainment as well as their value-add.

Cross-/Upselling. The goal of every manufacturing company is to increase customer lifetime value. It is much more economical to retain existing customers than to acquire new ones. Connected products can support cross-selling and up-selling tremendously, as the relationship with the customer is so strong. For example, within Amazon Prime Video, customers can acquire further film packages (up-selling) or additional channels such as Amazon Prime Music Unlimited or Amazon Audible (cross-selling).

Subscription. The ultimate goal in the Economy of Things should be to bring the customer into a long-term subscription relationship. Why? Because the purchase decision does not have to be made anew every time a new product is launched; revenues become more predictable; and significantly higher revenue per customer can be generated over time.

Registration plays a very important role in the new Subscription Funnel. At the top of the funnel, an attempt should be made to ensure customer registration, as this considerably facilitates future communication. Customer contact is the most valuable currency in the sales process. Once the product has been purchased, it should also be registered in order to create and market a relevant service portfolio.



The new Subscription Funnel underlines the need to support the customer after the purchase has been made. This possibility only exists with connected products. However, these new opportunities also require adapted company and personnel structures. Teams must be formed to take care of after-sales support and customer relationship management. Salesforce does this in an exemplary way with the help of “Customer Success Teams”.

The big chance is that corporate and customer interests are in harmony here: both are interested in satisfactory product usage. This is a unique opportunity that companies should take full advantage of.

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