Business, Music, Love, Art, life

Bass Lures

FOUR BUSINESS MODELS YOU SHOULD KNOW ABOUT

FOUR BUSINESS MODELS YOU SHOULD KNOW ABOUT

Today I want to talk about subscription businesses. Subscription-based pricing is all the rage right now, and for good reason. When it comes to pricing your product or service, a subscription-based pricing model stands head and shoulders above the rest. Here’s why.

1. Recurring revenue

Having a customer pay you each month without going through the checkout process again is a huge benefit. Consumers are conditioned to assess the risk and possible regret of their purchase each time they go through the checkout process, so you would inevitably lose a good chunk of those customers every month. The subscription model mitigates this problem.

2. Continuity

Having a customer pay you consistently every month allows you to increase your monthly income over time and maintain some level of continuity even when you’re not making new sales. Simply put, with a subscription model, new customers = growth, whereas with transaction pricing, often, new customers = mere survival.

3. Lifetime value

Generally, having a subscription based business model means your customer lifetime value will be higher. This is one of the main reasons software companies originally switched to the subscription pricing – they realized they could make more money charging customers $30/month for several years rather than a one-off fee of $150. The same logic applies to any of the business models I’ll cover below.

4

With that in mind, it’s clear that we should all be aiming to start subscription based businesses. But I don’t want to think that these business models are just for the big guys – here are some ideas about how you can start a business like this today.

Physical

There’s been a huge boom in subscription boxes recently – i.e. monthly boxes that contain goods based on a certain theme. In some cases there are practical considerations for the subscription – like nappies for children, or razor blades for men who shave (check out dollar shave club), but often the novelty of having a surprise box of treats shipped to is enough of a reason as any (they also make great gifts, literally the gift that keeps on giving). If I were to start a subscription box company, I’d think about a target audience first. Once you’ve got your target audience, think about a theme or the kinds of products that those guys would love to receive on a monthly basis. Put up a landing page or a sales letter explaining the concept, then drive traffic to the page. Use the first months sales to fund and send out the box, and pump and profits back into marketing to get new customers. Rinse and Repeat!

Software

Software-as-a-service is another giant industry and some of the biggest companies in the world are SAAS companies – think Salesforce, Responsys or even Microsoft Office, all of which operate on a subscription model. But I don’t want you guys to think that SAAS is only for the big guys. There are thousands of small niches out there where entrepreneurial enablers are creating small apps to solve real problems in a variety of niches. Talk to the people in your industry, and find out what’s REALLY bugging them, causing them frustration or lost revenue in their day to day work, then ask them to pre-pay for you to develop it, at a steep discount. A great example of this I recently saw recently was Statement-Matching.com, an app that automates vendor account reconciliations for businesses. The founders were accounting consultants who saw this problem crop up time and time again – so simply created an app that solves this pain point. You can do the same.

54

Service

There’s an array of regular services that can be sold on a subscription model. Basically, any service that fits into the category of productized consulting and sold as an off the shelf product – think accountants, financial advisors, marketing specialists, or graphic designers. Instead of selling one-off projects, switch your focus to selling your services as an off the shelf product for a monthly fee. Correlation is a great example of this – they offer ‘creative direction’ (design and brand consulting) as a monthly service, and it looks like they’re killing it.

Information

Other than productized consulting, the other way I’ve seen specialists sell their services is in an information product or a community program. This usually comes in the form of a course, mastermind group, or forum (or all three). Whatever you’re a specialist in, there are people out their who want that knowledge. You can build an online course that shares your secrets with the world (bonus points if you leak out content weekly to maintain the subscriptions), and you can add more value by creating a mastermind group on top of the course in order for your customers to ask you questions directly or work together to improve at their craft. Some examples of this to get you started are the McMethod (email marketing course with associated forum) and the Stack That Money Forums.

My head is buzzing with ideas after researching and writing this article and I hope yours is too! If you have any personal case studies that you want to share with readers then drop me a line on the contact me page!

Know About Starting A Subscription Box Company

Know About Starting A Subscription Box Company

In a world where we are buying more things online than in store, subscription boxes are the new craze. You have probably heard or seen them by now as there are so many varieties, whether you want some healthy snacks delivered to your door or even a craft set filled with little art tools for your children, every whim can be catered for with a subscription box.

A subscription box company guarantees you income every month from your loyal customers whilst only being of a low cost to you. It is an e-commerce concept that can deliver (quite literally), and enables a start-up entrepreneur to get their products to their customers in a relatively easy and very trendy sort of way.

But how to get started?

1. Decide your niche
What would you like to be selling? That’s the key question when any entrepreneur begins to build their own business, and that doesn’t change here. In order to truly succeed, you will need to choose something that you genuinely have a passion about, as well as something that you think meets a unique need for people. Of course, when deciding to start a subscription box company, you also need to factor in the size of your items – nobody wants to receive a ridiculously large box every single month. Most subscription box companies have sensible, rectangular shaped boxes, so bear that in mind when deciding what you are going to put in them.

2. Decide who your customers are
Who are you selling to and why? Remember what you have decided to sell and then figure out who will actually want to buy it. Build a picture of who this person is. Are they single, married, living at home, living in a city, working? Imagine their lives and imagine how your subscription box will help them live their lives better.

3. Decide where you will get your products from
Depending on what you have decided to sell, you need to establish where you are going to get your items from. Make sure that whatever you want to put in your box will actually fit in the box. You can do this by making several prototype boxes, so that you can measure how easy it is to fit the products in and how heavy the box feels. You can actually achieve getting free products from suppliers as many subscription boxes don’t pay, but instead the supplier gets publicity for their product. Of course, this depends on the content, so do your research.

4. Decide on pricing
Figure out how much you are going to sell your subscription for per month, and whether or not you can afford to give out free sample boxes as a marketing tool. Also decide on how much you are going to have to pay for shipping and handling of your boxes. Research whether or not it would be more effective for you to personally fill and ship the boxes or if it is worth hiring a third party to do so.

Once you have these basic decisions made, you are well on your way to a successful subscription box business.

packages-1027339_640

see more about subscription  boxes