Over the weekend I read an article that highlighted a subscription to shaving products from Harry’s, ‘A Great Shave for Great Britain’ is the brilliantly inclusive strapline. I don’t need their products but I felt compelled to have a look, if I shaved, I would sign up. Like ‘Shave Club‘, it is providing a service in response to a need, that need is not going to go away. We are all time poor these days, fewer of us are browsing round the shops to find exactly what we need. A subscription means we sign up at the click of a button and it is all taken care of.
Building a Subscription Product
Years ago I created a subscription model for a client, the market we were aiming at was any adult who needed to regularly buy gifts for a child. I chose and created a series of gifts that would gradually build to become a whole play set. I wrote a story to go alongside each month’s gift, adding another dimension to the recipients’ experience and making our subscription stand out. the developing story also served as a hook to retain customers for the duration.
In this particular case the product was a train set, easy to build on from a basic starter set, adding in a desirable addition each month to create an impressive end product of high perceived value. The excitement of the experience for the recipient was matched by the ‘brownie points’ earned by the adult paying the subscription. This customer is probably time-poor and the convenience of a subscription based product ticks all of the boxes. Everybody feels good.
The Subscription Business Model
The subscription model has great potential, many businesses have been propelled to stardom, The Honest Company is a great example. Since beginning in 2011 it’s valuation in August 2015 was $1.7 billion. Have a look at your offering, do you have products or services that people would need/want to buy regularly? Think how you could help by taking care of it for them.
Benefits of the Subscription Model
Convenience/Ease – Your offering must represent convenience for your customers. The subscription ‘takes care of it’ for them, saving them time/money/effort. For your business, cashflow is more predictable, budgeting becomes easier, future revenue is assured, more time is available for running the business.
Customer Loyalty – You are providing a service to your customers, retaining their business in the long term. Whilst building the relationship with your customers you increase your understanding of their needs and preferences and therefore your marketing power. Use the opportunity to obtain valuable testimonials, your subscribers chose you for a reason, ask them to tell you why.
Marketing Potential – Regular subscribers are a ‘captive market’, ripe for relevant, useful communications that provide a chance to upsell. The potential for scalability is at your fingertips. Marketing, invoicing and communications can be automated to release your time and reduce outgoings.
Control – The predictability of demand gives you more control of stock and purchasing. As well as that, it affords more control of your budget and the opportunity to place advance orders and release funds for future projects/investments.
Cash Flow – Manage cash flow with more certainty, the predictability of knowing income and outgoings gives you the information you need to make strategically important decisions.
Benefits of subscriptions include increased revenue, higher profits, enhanced customer loyalty and a vastly improved cash-flow. All you need is a product/service that is needed regularly, and clever marketing and content writing to show customers why they need to subscribe.