18:19 Friday, 22 November 2024
You may have noticed that most businesses have started to offer products and services through a recurring subscription. This is most common with software applications, but it’s quickly becoming the norm in just about every industry.
This article will explore key reasons why embracing subscriptions could be transformative for your business.
1. Recurring revenue is the key to passive income
If you’re a business owner seeking sustainable growth and predictable revenue streams, adopting the subscription model will give you a serious advantage. Although nothing is entirely hands-off and subscription income isn’t completely passive, it does generate income much easier, freeing you up to run your business from anywhere in the world.
Running a remote business allows you to work from anywhere while minimizing your expenses. For instance, while you’re traveling, you’ll only need your laptop, smartphone, and a good protective case. Most of your expenses will be related to travel, food, and accommodations rather than pouring money down the drain by renting an office.
It takes less time and energy to maintain the foundation of subscription-based income compared to constantly seeking to generate one-off sales through marketing and advertising. It still requires work, but far less, which will give you more freedom.
2. People are only tired of scammy subscriptions
If you look around online, you’ll notice that many people are tired of everything requiring a subscription. From gym memberships and streaming services to software and internet service, there seems to be a monthly fee for everything. However, upon close examination, you’ll find that people only complain about subscriptions that should be one-time fees.
When it’s obvious something shouldn’t have a recurring fee, people get mad. For example, a dog collar equipped with a GPS unit that tracks your dog’s location through an app shouldn’t have a monthly fee. Neither should software that most people only use a few times a year. Consumers know when there’s value attached to a subscription, and when there isn’t, and that’s where the next point comes in.
3. If you can offer true value, customers will happily pay
One of the keys to making the subscription model work is that you need to provide real value that people will be using on a regular basis or offer something they’ll need access to regularly over time. Customers aren’t willing to pay a monthly fee to access things they only need to use once or twice, or something that doesn’t make sense (like a subscription GPS dog collar). However, if you’re offering continued value, and your customers want that value on a regular basis, many will be happy to pay for a subscription.
This is why many businesses offer courses and masterclasses for their customers on an ongoing basis. Most of them are using learning platforms like Skool, but others are using white label solutions to create a fully branded experience. There are benefits and drawbacks to every option, but overall, community subscription services that offer true value tend to do well.
4. Community subscriptions support customer relationships
While it’s nice to get paid on a recurring basis, community subscriptions provide a wide range of benefits directly related to customer relationships. Having a community puts you in direct contact with your customers, which can seem overwhelming, but you don’t need to get involved in every conversation. However, having you around to answer questions and help people get unstuck helps you build a solid reputation of trust and respect.
In a world where so many marketers are hiding behind fake AI profiles and making themselves impossible to contact, the fact that you’re making yourself available to your customers while interacting with them and addressing their concerns quickly in the community will set you apart.
Some precautions
Although the subscription model is a great way to generate recurring revenue, there are some precautions to take. The FTC has come down hard on businesses, including Amazon, for legal violations and has passed new rules for recurring subscription businesses. For example, it has to be easy to cancel, and customers need to be able to cancel using the same method they used to sign up. So, if someone signs up online they need to be able to cancel online without having to call customer service.
Start incorporating subscriptions
Whether you offer a subscription product or create a membership space, embracing the subscription model will help you create predictable revenue while deepening customer relationships and positioning yourself for long-term success.
