While the federal government was taking a break, the subscription industry continued on, serving businesses and consumers alike. In this week’s Five on Friday, we share highlights, including the launch of the Clutch Subscription Platform for the automotive industry, tips to help subscription companies up their commerce game, Google’s $57 million fine for GDPR violations, how to know if your company is ready for an IPO, and payment technology startup Stripe raises $100 Million.  

Clutch Launches Subscription Platform for Automotive Industry

Last week, Clutch Technologies announced the launch of a new subscription platform designed to serve the automotive industry. With the new platform, which covers everything from payments to telematics, dealers and original equipment manufacturers (OEMs) can develop recurring revenue relationships with customers who want to own or lease a vehicle.

“In multi-vehicle subscription, our initial product, we set out to solve the hardest and most comprehensive problems first. We knew that the resulting technology platform could then be used to build an array of products that would serve the needs of many different,” said Vince Zappa, president of Clutch Technologies, in a January 22 news release.

“The common thread is that these products allow the industry to shift from transactional to continuous relationships. If dealers and OEMs establish ongoing relationships, learn what is needed from consumers, and provide ongoing value, the result will be a virtuous circle of retention and profitability, regardless of the specific products a consumer is using,” Zappa added.

The Clutch Subscription Platform includes:

• Service pickup and delivery
• Extended test drives
• On-demand rentals
• Fractional subscriptions
• Single vehicle subscriptions
• Multi-vehicle subscriptions

The new platform will roll out the first quarter of 2019. Learn more about it at DriveClutch.com.

Five Factors to Up Your Subscription Game

In their January 2019 Subscription Commerce Conversion Index report, PYMTS and Recurly share the factors that separate the best subscription companies from the rest. Here are five things to focus on to make sure your company is among the best:

1. Clarity:  Customers want to know what they’re buying. Offer details on your products and services and explain how recurring payments work, so there are no surprises.
2. Security:  With data breaches occurring more frequently, customers need to feel safe to do business with you. Require your customers to login in with a secure password.
3. Flexibility:  Customers want choices. Give them plan options (tiered subscription offerings are great for this!) and make it easy to cancel their subscription.
4. Information: Customers want to know how other customers feel about your products and services. Provide links to testimonials, product ratings and reviews.
5. Speed: Customers don’t want to wait around. Monitor how long it takes someone to subscribe. The longer it takes, the more opportunity you have to lose them before sealing the deal.

Download the full report from PYMNTS – January 2019 Subscription Commerce Conversion Index report – for a wealth of information about how the best subscription companies succeed. 

Google Hit with $57 Million Fine for GDPR Violations 

Last week, Google got hit with the first major fine from violating the European Union’s General Data Protection Regulation, GDPR, which went into effect in May 2019. GDPR is the EU’s new set of data privacy laws that requires all companies who have customers in the EU comply. The fine is 50 million euros, which is approximately $57 million in U.S. dollars.

According to Recode, Google was fined because it did not sufficiently clarify the data it was collecting from users and had not obtained express consent to use personal data for targeted ads on Google’s search engine, Google Maps and YouTube. The fine is lower than the maximum penalty the European Data Protection Board could impose – 4 percent of global revenue. According to The New York Times, this is the fourth fine since GDPR was enacted less than a year ago.

 A spokesperson for Google told Recode, “People expect high standards of transparency and control from us. We’re deeply committed to meeting those expectations and the consent requirements of the GDPR. We’re studying the decision to determine our next steps.”

To put it in context, this fine is minor, compared to parent company Alphabet’s revenue. Though the company has not yet reported its 2018 year-end results yet, in the third quarter ending September 30, 2018, Alphabet made $33.7 billion in revenue with net income of $9.2 billion.

With this being Google’s fourth violation so far, it doesn’t seem that the tech giant has learned its lesson yet. We wonder what it will take for Google to get the message that the EU takes its data privacy seriously. Read more about the fine at The New York Times or Recode.

Is Your Subscription Company Ready for an IPO? 

Have you ever wondered what it takes for a company to go public? In a recent article by Due.com for NASDAQ, they explore a handful of companies on the verge of an IPO including Uber, Airbnb, Lyft and Slack, all tech-based companies, and what makes them ready to seriously consider an IPO. Here are a few factors these companies have in common:

Scalability: Whether you have 100 clients or 100,000 clients your staff and infrastructure need to be able to handle the business. Are you set up to scale as your grow? For tech companies, this is far easier than it is for a retailer, for example. Investors want to see nimbleness, and scalability helps companies achieve this.

Retention: It is far less expensive to keep a client than it is to acquire one, so an IPO-worthy company understands that. Of course, retention is often a subscription company’s greatest strength – serving its clients so well that they continue to renew their contracts month after month, year after year.

Recurring Revenue: Recurring revenue goes hand in hand with retention. When you meet or exceed a client’s expectations, they will continue to buy your company’s products and services. This ability to depend on long-term, sustainable revenue is attractive to investors because it creates stability and predictability that all savvy investors want to see.

Is your company ready for an IPO? Read more on NASDAQ.com.

Payment Technology Startup Stripe Raises $100 Million 

Stripe, a San Francisco-based payment technology startup, announced this week that Tiger Global Management recently invested $100 million. Alongside this news, Stripe has added Diane Greene to its board of directors. Greene was mostly recently the CEO of Google Cloud. Prior to that she co-founded VMware and was co-founder and CEO of VXtreme and Bebop. In addition, Greene is a director of Alphabet and SAP.

Green joins three others who serve as outside directors for Stripe: Michael Moritz, partner at Sequoia Capital; Michelle Wilson, former general counsel at Amazon, and Jonathan Chadwick, former CFO of VMware, McAfee and Skype.

“We’re building Stripe for the long-term,” said Patrick Collison, Stripe co-founder and CEO, in a January 30 news release. “We’re lucky to do so alongside a roster of detail-oriented directors who believe that infrastructure revolutions can compound for decades, and that operational excellence can be a durable competitive advantage.”

Stripe is now valued at $22.5 billion. When it was last valued in September 2018, the company was worth an estimated $20 billion. At that time, Stripe said it would use the new capital to expand its international reach, scale its engineering team, grow the capabilities of its global payment network, and focus on operations and enterprise features for larger clients.