Does your business have recurring revenue?
TL;DR – There’s a reason trends like subscription boxes are exploding right now. Building a business with a recurring revenue model is a smart way to ensure month-over-month growth and excellent profits.
If you participate in online small business forums, you’ve probably noticed how subscription box services are exploding right now. They’re the biggest trend of 2015 so far, and they’ve still got a few months of growth (maybe a year) before they get played out.
Even though subscription boxes won’t last forever, recurring billing-based business models will.
Why? Because subscription-based businesses are a win-win for customers and businesses.
Customers pay less on a monthly basis since there’s less pressure to get all of the money from the initial sale.
Businesses – especially small businesses – have plenty of benefits of their own.
- You get to remonetize customers. A subscriber buys from you multiple times, not just once. Easy remonetization.
- No additional selling. You sign up a customer once, and you don’t need to sell to them again. They’re subscribed. All you need to do is keep delivering a useful product. (Or, as I like to think of it, you need to keep delivering happiness.)
- Low churn. Generally, customers are much less likely to cancel a reasonably priced subscription that delivers value. They’ll put it off until later, or they’ll simply forget about it until the next time something arrives at their door.
- Steady growth. With low churn, you only need to add a few subscribers for month-over-month growth.
- It’s fun. Finding awesome things to send your customers every month is fun! Thinking, “How can I surprise and delight my customers?” leads to unexpected but rewarding deliverables.
The actual process of setting up a subscription business isn’t hard. Later this week, I’ll share how to create a subscription business of your own in about a day.
