5 Reasons Why Building a Subscription Into Your Business Is a Winning Strategy
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While testing Amy Porterfield’s recipe for a five-figure webinar, my team and I discovered that though we seemed to get a ton of positive feedback in terms of the value we delivered, our price point was a deterrent.
At first, our team floated the idea of a “prequel” course, something that would help educate and prepare prospective clients so that they would not only be more interested in our flagship Baby Got Booked course, but also be in a better position to use it to its fullest.
Something we often heard from people just getting to know us was, “I love the idea of doing my own PR, but have no idea where to start.” So I got on the phone and on Skype with journalists and editors across North America and in the U.K. and asked one simple question: What matters most to you when you pick someone to cover or feature or offer a column?
Sifting through my notes after the fact, there was just one thing that they all unequivocally agreed upon: “A good story.” Not a fancy website or degrees or even huge social followings. Just a dang good story.
That happens to be something that most small-business owners struggle with.
So we immediately started building a deep-dive course that we called “Beyond the Elevator Pitch: How to tell your story in a way that makes you stand out from the crowd and have clients lean in”.
As we were building it, we couldn’t seem to agree on how the customer experience was going to work: Were clients going to purchase one mini-course? A series? What was the price point going to be that would remove resistance and invite them in but then not leave them unable to make the jump to Baby Got Booked?
And that’s when my eyes widened as several ideas that had been floating around my head collided. I’d been listening to John Warrillow’s Automatic Customer on audio and loved it so much I’d purchased the book on paper too. Following all the buzz created at Infusionsoft’s annual conference ICON, my project manager had talked me into purchasing Memberium to eventually create some sort of paid subscription.
BOOM! All of a sudden, I could see how it all fit together.
Instead of building out a mini-course and then going through the clunky process of figuring out all the in-between steps that we’d require to lead customers up our ladder, why not create a library of fabulous, action-oriented mini-courses (including Beyond The Elevator Pitch) that members can access for a no-brainer monthly fee? It would allow me to expand outside my niche of DIY PR and talk about some of the other things I'm super passionate about: lifestyle design, business growth and scalability, fitness, parentpreneurship and more.
It would also finally solve an issue that many startups face: as the founder and chief content creator, I'm a bottleneck in our business. With a subscription-based site, I could invite experts in multiple fields to create courses with me and expand my own knowledge while enriching the lives of those who paid me.
We're calling it Baby Got Booked Lab, because I think business building is an endlessly fascinating experiment and I wanted our name and logo to reflect that.
So, could a membership site be a good fit for your business? In The Automatic Customer, John Warrillow argues that yes, every business can benefit from a subscription arm. I'm inclined to agree. Here's why:
1. It takes you off the cashflow rollercoaster.
Having a baseline of predictable monthly payments coming in sure does create a nice cushion on which to build a business. Even if you have a “churn rate” of 20 percent -- where a slice of your customers decide to quit, if you’re doing a good job of providing value, many will be with you for a long time.
2. It creates raving fans faster.
Building something where you provide a ridiculous amount of value for a very low fee makes people feel like they got a tremendous deal. They'll then want to brag about it to friends and family, which means more business for you.
3. It speaks to people’s desires to rent or test rather than own.
Companies such as Netflix, iTunes, Birchbox, Dollar Shave Club, etc. have trained us to want easy access at low prices. You could look at it as low ticket or you could realize that technology has basically made it easy for you to charge people while you build a relationship with them. You can monetize the process much earlier than you could with a higher-ticket item.
4. It allows you to create a fertile community to test market ideas.
Not all membership sites have community built in, but when you do, it’s a brilliant place to run polls or ask for feedback on products either before or during the building process. It saves so much time and money to build exactly what your paying customers are telling you they’re willing to purchase. Staying deeply involved also helps you see gaps in your current offerings so you can quickly create paid (or free) solutions to further drive engagement.
5. It’s the foundation for an empire.
Costco and Amazon charge you a recurring subscription. Because you’ve paid them and are assured of certain benefits (free shipping, low prices, bulk packaging, etc.), you’re now much more resistant to purchase elsewhere. So while Amazon started with books, it has now taken over your life. Costco started with your kitchen and has crept into auto insurance!
Basically, the formula goes like this: Make it irresistible for a customer to join your subscription program. Build trust by offering amazing value. Widen your offerings and offer premium services that people will now purchase more willingly because they know, like and trust you.
Convinced? What would you create as a subscription arm to your own brand? I'd love to hear from you on Twitter.