How to Start a Subscription Business
- Why Start a Subscription Business?
- 1. Predictable Income and Workload
- 2. Simple Outputs
- 3. Lower Customer Churn
- 4. Easier to Market
- 5. Lower Barriers to Purchase
- 6. Can Use Add-Ons
- 7. Marketing can be Automated
- How to Start a Subscription Business
- Step 2 – Branding
- Step 4 – Website
- Step 5 – Market
- Final Word: How to Start a Subscription Business
Subscription businesses are becoming very popular. There are numerous examples of this business model being used throughout products and services from digital viewing to socks. One of the best-known examples is the Dollar Shave Club. But there are others that you can take inspiration from that allow you to build a successful model. In this article, we will look at how to start a subscription business and make it a success.
Why Start a Subscription Business?
Subscription businesses are becoming a popular model because of the numerous advantages that they’re offering business owners. Here are some of the benefits.
1. Predictable Income and Workload
One of the main benefits is that they offer a predictable income and workload. You know that your income is going to be the total of the subscriptions for the month, with the potential for more and there is a set amount of workload that you can get.
Therefore, it can be easier to manage your working hours and efforts. And it allows for better control of the budget for marketing.
2. Simple Outputs
One of the biggest problems with services or product based when there isn’t a set number of solutions is that there can be mistakes. Orders can be sent out with the wrong products, the incorrect amount of work done on a project, or other mishaps that can annoy customers or cost money.
With a subscription, there is a standardized output that anyone in the company can learn. It helps make the production line quicker and improves costs/customer experiences.
3. Lower Customer Churn
Subscription businesses tend to have smaller customer churn numbers than other business operations. This is because subscriptions can be lower-cost and therefore more convenient for the customer to keep. Likewise, the customer having to take action to make the purchase again can be more challenging, and therefore they are less likely to convert.
4. Easier to Market
Subscription services/products are easier to market. You can sell the benefit of the subscription and the product/service. Therefore, it makes it appear that you have a much better option than others who might be offering something very similar but on a traditional shop model.
5. Lower Barriers to Purchase
One of the biggest benefits is that you can offer a high-ticket product for a low monthly cost. So audiences who are normally priced out of the market can buy your subscription service and then get the product/service that they would like. Therefore, businesses on a subscription model can benefit from a larger audience than traditional models.
6. Can Use Add-Ons
Not all subscription models are solely based on regular services/products. Some do allow for the customer to make additional purchases every so often, to help the business earn more money. These upsells can help a subscription service to be more profitable and is a good way for the business to please customers.
7. Marketing can be Automated
A lot of the marketing for your subscription business can be automated. From social media to your email marketing options, about 80-90% of the campaigns can be automated so you can focus on talking to leads and servicing customers.
How to Start a Subscription Business
So here are the steps that are required when you want to know how to start a subscription business. These steps can be done with ease.
Step 1 – Choose the Product
The first step is to choose the product that you would like to offer to your customers. This could be a physical product like clothing, food, toys, games, wine, etc. or it could be a service like cleaning, accounting, marketing, etc.
Step 2 – Branding
Now you need to start developing a brand. Start with a name for your subscription business. Use a subscription brand name generator to help you come up with the right name. At the same time, ensure that the name is not in current use. There are several steps to this including running a business name search.
When you’ve got a brand sorted, ensure that you register the name within your state. You might also want to consider registering your business as an LLC.
And don’t forget the domain.
Step 3 – Design Business Operations
Now you need to design how your business will run. Choose the subscription offers, how you will take payments, how you will deliver products/services, and what to do in emergencies. You need to create an Operations Agreement, Operations Manual, and other documents to ensure that your business will run smoothly.
Step 4 – Website
Now build your website. Numerous platforms are perfect for subscription businesses. You might want to try WordPress, Shopify, Wix or Squarespace which all have subscription extensions that can help you set up the model, and the products and take payments.
Remember that speed is key. For every second that it takes for your website to load, you will lose about 7% of your revenue. When that comes to subscriptions that can be a significant drain on your platform.
Step 5 – Market
Now you need to start marketing your subscription service. There are several steps to marketing. You want to get on social media, but you also need to build an email marketing list. One of the best options to build an email marketing list is to use a lead magnet. This can be a free ebook or it could be a free consultation.
Email marketing sequences can be set up to help you run your marketing better. You could have a drip marketing campaign where there is an automated series of emails that convince some of your email subscribers to join your subscription plan.
You will also need to build a good presence on Google. Regular blogging can improve traffic levels. And you might also want to do some guest blogging roles.
For social media, ensure that you’re active on at least three platforms, preferably four. Facebook and Instagram are two of the most important platforms. You might also want to try creating a YouTube channel.
Final Word: How to Start a Subscription Business
When it comes to business models, the subscription business is one of the most profitable available. Above are the reasons why and how to start a subscription business. You can get one going in just a few hours in reality. Though registering the business name can take some time.