Allocate is the leading international provider of healthcare workforce management software. Having previously had an ‘up-front’ payment licence model, with annual support charges, Allocate wanted to move to a subscription-based model as a way of improving recurring revenue and supporting more accurate sales forecasting.
Allocate needed to consider a licensing model that could prevent customer loss. Working together we combined the term licence, annual maintenance and hosting costs, moving their offerings to an annual subscription fee. Unique features were also added to the SaaS offering, to differentiate and increase value. All of this was supported by product re-packaging and new commercial terms, as well as work on establishing this new, central vision.
Getting the pricing right was a big part of this project. Not only did it move to being based on the number of users but an annual price increase clause was introduced in the contracts.
A natural part of this transformation was establishing new KPIs, to include percentage of subscription revenue, as well as percentage of contractual profiles, with price increase clauses. And, to work alongside this, the sales team focus was changed from ‘sales’ targets to ‘retention’ targets, with support from a newly formed ‘customer success’ team, covering renewal activities.
As a result of this work over 80% of contracts are on SaaS, including annual price increase provisions. Allocate has seen growth as well as greater predictability of revenue and higher levels of measured customer satisfaction.