Why Should My Business Be Subscription Based?
Let’s take a look at some of the most successful subscription-based models on the market and explain why you may want to be operating your business in a similar vein.
A Win for Your Customers
Subscription models provide busy consumers with convenience they won’t find anywhere else. They have a set amount leave their bank account on a regular basis and are rewarded with products or services turning up at their door, in their inbox, or waiting for them as soon as they log in.
For the budget conscious or those who know what they need, there are often numerous bundling options available as well. Perhaps no consumer is busier or more conscious than a new parent, and this is why The Honest Co’s subscription model has truly taken off.
For a monthly fee, busy parents can receive numerous eco-friendly products, ranging from nappies to vitamins. Bundling allows consumers to save 40% on standard prices, not to mention hours lugging a screaming baby around a supermarket. After only four years, The Honest Co. is readying itself for an IPO and is speculated to be worth over £1.6m by the end of 2015.
A Win for Your Books
When it comes to a company valuation, seeking venture capital, looking to sell, or simply generating a revenue forecast, a subscription-based model offers a clean bill of health.
In fact, the creator of the Value Builder System, John Warrilow, has gone on record to say that companies that receive a high percentage of revenue through subscription services are worth up to eight times more than those who don’t offer this guaranteed revenue stream.
Subscription-based models also allow businesses to easily calculate the lifetime value of a customer, manage inventory, and offer simple pricing.
Better Customer Relationships
Lifestyle entrepreneur and internet marketer, Ryan Lee consistently turns over 7 figures building relationships and offering value to customers through subscription-based models.
These models range from webinars that help budding entrepreneurs get started to podcasts aimed squarely at those who are successful but wish to create revenue. Ryan has leveraged his success at helping others to generate numerous income streams that increasingly grow his company and brand value.
He is now seen as a guru to those who have brought into his brand, with many entrepreneurs moving across to his subscription platforms as their needs change.
Ability to Upsell
Dollar Shave launched one of the world’s most loved YouTube campaigns two years ago. Low budget, silly, and irreverent, this campaign was tied to a clever subscription model that has seen Dollar Shave take on the big boys of the shaving market to post over £38m last year.
This clear vision to ‘own the bathroom’ according to Dollar Shave’s CEO Michael Dubin has seen them introduce numerous products from wet wipes to moisturisers. This has only helped to grow Dollar Shave’s customer base and add to their value.
Flexibility in the Services Market
In the traditional world, once you can’t offer what your customers want, they may go to a competitor that has the scope to meet their needs. In the services sector such as graphic design, subscription-based models allow you to achieve endless scope through the application of flexible strategies.
Offering a package of cross-platform bundles at a set price gives your consumers more power while ensuring you keep them loyal.
At Invoice IT we are subscription invoice specialists, to find out more get in touch by calling +44 1344 578003 or contact us online.