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The subscription business model isn’t new. It’s a proven way to guarantee income, access to customers, and a reliable bottom line at a set interval. Think your retail business can’t get in the game? Think again.

Newspapers and magazines have been struggling for a decade, but one of the key tenets of their business model for hundreds of years is alive and well. Your newspaper subscription is now being tossed at a paywall. It’s a function that most apps and many content creators have adopted over the past few years. In the digital space, subscription is king, especially when it comes to entertainment. 

Apple+, Spotify, Hulu, Netflix, and just about every paid app on your phone, relies on monthly or annual payment options to retain customers. As a result, those digital platforms don’t rely on selling new products or services, but using those new products or services to retain customers they’ve already won. We’ve said it before; the easiest sale to make is one you’ve already paid. When it comes to conversion, there’s no easier sale than one that is automated. 

Retailers are beginning to realize that subscription services are useful for more physical products as well. From subscription gift boxes, book of the month clubs, and membership-style discounts on staple purchases, more business owners are getting creative when it comes to manufacturing recurring revenue for themselves. 

Drinks? Bars and coffee shops have traditionally sold drinks, sure. But ask most owners and they’ll tell you what they really sell is space. These are places that bring people together, creating a ‘third space’ between work and home. They’ve never really been able to compete on price because the cost of a latte is relatively fixed based. Without the ability to bring people indoors, they’ve had to find ways to change habits. 

Coffee shops have moved to Dollar Drip coffees, mug clubs, and even free delivery to members have opened up new ways to reward customers after an up-front fee. These memberships may break even or lose money on their value proposition, but it rewards loyalty much like a more traditional loyalty program. Access to your favorite cup of coffee for just a buck might pay off if those customers begin adding on a scone, a cookie, or even a full lunch to their daily order. 

Any restaurant or foodservice industry can make this work; contact us for ideas at no cost. 

Retailers. Why are sock-of-the-month clubs successful? Through targeting, it’s easier than ever to find the perfect customer for your product, no matter how small of a niche it might be. There are people out there who simply love socks. Get them on the drip once, and they’ll keep coming back. Recurring shipments and interactions are new opportunities to pitch other products or services, taking a small margin conversion and putting your brand in a position for more. 

No matter what your industry, creating a strong subscription-based program all starts with a few key elements. 

  1. Set A Goal. Each subscription product should have a goal beyond a set dollar amount, but it should make financial sense. Looking at the total cost of meeting your customers’ needs includes more than just the physical product or service. Make sure you build all expenses into your pricing and make sure that is accounted for monthly and annually, even if there is a price break for biting off a year subscription. 
  2. Starter Purchase. While you shouldn’t lose money, pricing your subscription at a level that makes re-upping a no-brainer ensures you continue to have access to your customers to offer more products and services.  Use the subscription sale to set up your next sale, raise your average cart total, or expand what you offer each customer. 
  3. Keep It Social. Get your customers working for you. Through discounts and rewards, encourage subscribers to gift subscriptions to friends and family by offering both a discount, a free month, or another option that works for you and your subscribers. 
  4. Make Billing Painless (and automated). Using different payments can have different charges, but don’t sweat a few cents in the long run. Turn on as many billing options as possible and encourage automatic renewals. It’s also a good idea to send reminders to those with both expiring and automated payments a week before their subscription expires as a nudge to re-up or a heads up they’re about to be charged. 

Looking for ways to incorporate a subscription or membership to your business? We’ll help you brainstorm…for free. Let’s talk soon!