The subscription economy is not just a trend – it’s a true growth engine for companies worldwide. For Original Equipment Manufacturers (OEMs), it offers great opportunities to rethink business models, but also new challenges, especially in terms of automating and scaling processes. In this interview with the Subscription Rebels, Lutz Rahn and Ralf Günthner, we learn how they guide companies on this journey – and how partners like Nitrobox play a key role.
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What does the subscription economy mean for OEMs, and how does it change their business models?
Ralf Günthner:
The subscription economy brings about a significant shift. In the past, OEMs sold products as one-offs. Today, it’s becoming increasingly common to offer Equipment-as-a-Service (EaaS). In this model, the product remains owned by the manufacturer, who is then responsible for maintenance and repairs. This means that the product quality must be high to avoid unplanned outages, as every service call reduces profit margins.
Lutz Rahn:
Introducing a subscription model also requires a completely new type of commercial management. Unlike the traditional one-off sales model, processes need to be fully automated to scale efficiently and maximize profit.
What opportunities and challenges motivate companies to become subscription companies?
Lutz Rahn:
In recent years, subscription models have become firmly established in the B2C world, with examples like Netflix, Spotify, or car subscriptions. Now, we are seeing this model gain traction in the B2B sector as well, with examples such as Pay-per-Part at Trumpf or Power-by-the-hour at Rolls Royce. This development opens up great opportunities for OEMs to monetize not just their physical products but also digital services. These new business models give companies the chance to differentiate themselves from global competition and create stable revenue streams.
Ralf Günthner:
Despite these opportunities, OEMs face several challenges. Competition from Asia is increasing, and profit margins are steadily shrinking. At the same time, it is becoming harder to differentiate through the product alone, as new market players emerge. Many OEMs have already invested in IoT and data platforms to bring their products into the cloud, but they struggle to monetize these digital services. This is where we come in, using a holistic approach to clearly identify customer value and pave the way for successful monetization.
The "Subscription Journey" is at the heart of your work. What does this journey look like, and what challenges do companies face?
Lutz Rahn:
Our Subscription Journey consists of four key stages:
- Status Quo: First, we analyze the current situation of the company based on eight focus areas, such as product management, pricing, and sales. We identify weaknesses and provide a maturity assessment based on benchmarks with similar companies. Based on this, we develop concrete recommendations and a milestone plan for the next phase.
- Get Started: In this phase, we work with the client to develop a vision – one that is ambitious yet realistic and allows for tangible first steps. We then create a business concept for the Minimum Viable Product (MVP) that meets market requirements. This includes process definitions, business requirements, and selecting a suitable subscription & billing platform. Legal, tax, and sales structures are also addressed here.
Ralf Günthner:
Once the foundation is laid, the next phase begins:
- Market Entry: In this phase, we implement the requirements defined in the business concept. The goal is to go live within four to six months with two or three products in several countries.
- Operationalization: The project is integrated into an existing organizational structure during the Market Entry phase. In the Operationalization phase, we jointly develop a structure and modern working methods to ensure that teams can quickly respond to market changes. The goal is to build a Subscription Factory – a scalable structure that continuously develops and offers new products and services based on customer data. By using customer data effectively, new revenue streams can be unlocked, and the monetization of the subscription model can be secured in the long term.
What does the term "Subscription Maturity" mean, and how can OEMs improve their maturity?
Lutz Rahn:
We developed the term Subscription Maturity to evaluate a company’s progress on the path to becoming a subscription company. The maturity assessment helps us identify where each customer is strong and where there is room for improvement. We often see product management driving the subscription agenda without adequately considering the impact on critical areas such as sales, tax and legal implications, or commercial operations.
Ralf Günthner:
To assess subscription maturity, we evaluate eight key focus areas that are crucial for the success of a subscription model:
- Product Management
- Product Pricing
- Go-to-Market & Sales Structure
- Legal, Finance, and Tax
- IT
- Order Processing
- Internal Communication & Change Management
- Organizational Structure
With this comprehensive analysis, we can pinpoint the steps needed to improve subscription maturity and position the company for success.
You typically work with solution partners like Nitrobox. Can you give us insights into your collaboration?
Lutz Rahn:
Once we have evaluated and selected a suitable solution partner like Nitrobox in the Get Started phase, the real implementation of the MVP (Minimum Viable Product) begins in the Market Entry phase. In this phase, we usually support customers in two roles:
- As subscription experts, ensuring that all defined processes and business requirements are seamlessly integrated into the subscription and billing platform.
- As project managers for the company, especially when no one on the customer’s side can take on this role.
Ralf Günthner:
A good example of this is our project with SKIDATA, a leading provider of parking management and access solutions, where we took on the role of customer project manager. In close collaboration with the Nitrobox implementation team and the SKIDATA team, we successfully completed various work packages within four months, including:
- The technical concept, including detailed process flows
- A concept for integrating customer, product, and partner data into Nitrobox
- The development of subscription plans, including pricing
- Customizing the invoicing templates for the three countries where we went live
- Defining accounting rules
- Developing the interface to the ERP system
In the end, we demonstrated that it is possible to go from strategy development to the full implementation of an MVP in the market within 12 months – a clear success for all involved.
About the Subscription Rebels
The Subscription Rebels, founded by Lutz Rahn and Ralf Günthner, are experts in digital transformation and subscription models. They guide companies from the initial concept to a successful market launch and help develop sustainable, subscription-based business models. Their mission: Usership instead of ownership. The Subscription Rebels support their clients iteratively and collaboratively – from strategy development to a market-ready subscription & billing solution. At the beginning of the year, they were recognized as the “Most Innovative Business Model Development Experts 2024.”