Avangate, a cloud commerce provider, has added new features to attract online services providers, such as improving payment collection for software-based companies and boosting consumer retention techniques.
"The next trillion dollar industry is the new services economy," said Avangate CEO, Carl Theobald. "But there's a billion dollar problem with that: revenue leakage."
Avangate customers see a 10% to 20% uptick in total revenue when using the company's tools, said Theobald. Metaio, an augmented reality company that in May was acquired by Apple, grew 300% after it started using Avangate's tools, and VPN encryption provider, Privax saw an 18% increase in its revenue after using the tools. Privax was acquired by AVG Technologies in May.
With the growing popularity of the "try before you buy" mentality and "pay as you go" business models, companies in the service economy are shifting the ways they engage their customers. The number of people paying for online services has increased by 27% from last June, to 78%, according to survey data from Avangate.
The company added active conversion tools to its suite of services, allowing merchants to control revenue moments throughout the commerce lifecycle. For example, the new feature gives merchants data on when a customer is canceling their service so that the cancellation might be deflected.
According to the survey, 97% of consumers prefer flexible purchasing options when selecting online services. Being shoehorned into one payment type or having to re-enter payment details is the most common purchasing deterrent, Avangate found.
New features added to Avangate's Digital Commerce Solution look to address this. The company also released an enhanced marketing toolkit that lets merchants experiment with retention templates and testing scenarios, and advanced revenue recovery tools with more localized payment methods.
"The new services economy folks expect freemium models, trials and subscription services. What that means is that it's an ongoing relationship, a long term relationship," said Theobald. "There's not just a single point of interaction anymore."
Avangate has expanded quickly in the past couple years. The company has 4,000 customers across 100 countries; last year, the company nearly 1,000 customer storefronts went live on Avangate's platform.