The lifeblood of your business is repeat customers. But customers can be fickle, markets shift, and competitors are ruthless. So how do you ensure a steady flow of repeat business? The secret—no matter what industry you’re in—is finding and keeping automatic customers.
John Warrillow, author of The Automatic Customer
You don’t need to know the benefits of a subscription business model:
:: Recurring Cash-Flow
:: Knowing How Much Inventory To Keep
:: Forecasting Your Growth
Instead, you need to know how to overcome the stress of starting and building a subscription business model.
Types of Subscription Business Models
First, let’s start off with the 3 general types of subscription models:
Membership Model – the most common membership models that people use are Netflix and Costco. However, several small businesses use sites like contractorselling.com and dancestudioowner.com to grow their business.
Simplifier Model – this model takes a “to-do list item” off the list and simplifies their life. An example of this model is Mosquito Squad which handles mosquito eradication for an annual fee. There are numerous home repair companies that charge on a monthly or annual basis for routing home maintenance issues.
Surprise Box Model – Companies like BarkBox send surprise dog treats every month to thier customers. My wife signed me up for foot cardigan for my birthday and I really like it. Every month I get a fun new set of designer dress-socks.
Challenges of Subscription Business Models
We already covered the benefits of subscription business models. However, there are several risks with starting a subscription business model.
The main risk is time.
Business owners generally don’t have excess free time to start an entirely new business model while also running their current business. Exacerbating this problem is the employees of the business don’t have the time or the skill set to bring the new subscription business model to life.
Accurate Billing
A good example of this is our recent customer RestroomFresh. The company provides some amazing products that obviously keep your restroom clean and smelling well. However, since they have multiple SKUs and different price points that can be ordered you want an accurate collection system that is easy and intuitive to use. You can learn more about our recurring billing features here:
https://spectruss.com/spectruss-ctr-now-supports-recurring-billing/
Infrastructure
It’s one thing to have a website that has decent content and produces leads. It’s a completely different thing to have an entire business running in the cloud that can scale rapidly and securely as you grow this new business. Security isn’t just a primary issue here at Spectruss – it’s paramount.
Design
The design of your subscription business model is absolutely critical. If a new customer comes to your site and gets frustrated with purchasing – not only have you lost a potential customer, but you have a person that will now talk negatively about your new business. Obviously you have also lost out on potential referrals from that customer as well.
Summary
While it’s extremely exciting to think about a new source of recurring revenue for your business there are several risks that need to be identified and addressed early on.
If you are thinking about starting a recurring business model online and would like to book a complimentary strategy session with Spectruss please fill out the form below.
If you would like to get started on your own, click here: https://spectruss.com/pricing/
