Subscriptions, the Rise of the Prosumer, and Forecasting the Future with HP’s Chief Commercial Officer, Christoph Schell
The stickiness of the changes brought about by COVID, and why subscription models and supply chain management are foundational to future success.
The COVID-19 pandemic has turned the world upside down, and there is a lot of talk about when things will go “back to normal,” or whether this is the “new normal.”
Christoph Schell, the Chief Commercial Officer at HP, is spending a lot of time thinking about what this new world will look like. He’s responsible for setting the company’s path and making sure HP is ready to go-to-market in the best ways possible. How he does that is by looking at emerging consumer behaviors and combining that information with hard data, which leads him to design strategies and solutions that, recently, have needed to be deployed faster than anticipated.
“This move to digital has been accelerated, the move from transactional engagements to subscription-based engagements has accelerated,” Schell says. “The request of customers to have more personalized experiences has increased. And that has a profound impact on how we design products.”
The pace of change is quicker than ever before, and the roadmap companies laid out for five years down the line are happening right now. The move to digital sales, a shift in working from home instead of in an office, a decrease in travel… all of these trends were already on the horizon, but that horizon landed right in front of businesses in the blink of an eye. Schells explains how this acceleration has forced a change in the HP roadmap, and why the new plan is focused on subscription-based services with unique global value propositions, supply chain resiliency, and a laser focus on using data as much as possible.
One of the main ways Schell says HP’s roadmap has changed is the focus on a new consumer segment called the prosumers. These are professionals and consumers, they are the people who are now working from home but need enterprise-level products to do the work on their plate in a secure fashion. Investing in this new consumer with a new workflow required a new way of thinking about the services that HP provides. And one way that Schell says to bring a better experience to consumers is by leaning into a more subscription-based model. To do that, though, requires real effort.
“[Subscription services are] like any product,” Schell says. “If you just do it because you think you should or you can, that’s not a good enough reason. At the end of the day, it all starts with the customer. You need to hit a nerve. You need to solve for an outcome that a customer wants.”
When you find out what a customer needs, it’s now your job to deliver that to the customer consistently. And your success is based on continual buy-in, loyalty and engagement, which are hard to come by.
“Let’s think what subscription’s all about,” Schell says. “You are now in an outcome-based engagement with a customer. And I think that is probably a very traditional definition. I think what you need to add now to it is, okay, it’s an outcome, but the outcome needs to be personalized. And if you can do that, then the likelihood of getting and loyal customer engagement, I think is quite high, regardless of what you invest into.”
But even if you are able to move to a subscription model, the path is not as easy as it sound.. As with all ecommerce, success comes down to fulfillment, That means the supply chain needs to be one of the strongest elements of your business.
In the past, companies figured out ways to get the most out of their supply chains from a profitability standpoint, but there are now other important factors to consider when you are shoring up your supply chain.
“We have learned how to optimize supply chain for cost,” Schell says. “But we had to learn that you need to also optimize supply chains for resiliency. And that is a very complex topic to do that when you manage a global business.”
“The biggest topic is actually how to manage forecasts, how to manage supply chains, how to make sure that we have the right product at the right time in the right place. … We’ve learned a lot and the challenge that we have sometimes is that you cannot just turn on a dime here. We work in ecosystems, in proponent ecosystems and manufacturing ecosystems. And so reacting to that is not easy. You need to pull a big shift of an ecosystem with you.So we’re trying to be agile, trying to be as flexible as we can. We’re trying to communicate more with our customers, communicate more with our go-to-market partners. And basically, we are planning a lot more to be able to cope.”
Coping is one of the key words of 2020. It’s what most of us have been doing on a personal and professional level. But we’ve also been pivoting. And businesses like HP have been able to cope, pivot, adapt, and find even more success. To learn even more about how and why Schell made the changes he has, tune in to Up Next in Commerce.