The subscription-based business model obviously isn’t new (think back to print newspapers and even protection rackets), but the role it plays in the business world has changed immensely as the internet has grown. Software-as-a-service companies have emerged to take advantage of modern bandwidth, with companies such as Adobe understanding that they could ultimately make more money by charging monthly fees instead of one-off software payments.
And then there are the myriad product-based subscriptions that have hit the market. Product bundles known as subscription boxes reached the mainstream years back, using the power of anticipation and mystery elements to hook customers. We even have product-as-a-service companies now, leasing equipment that would once have been purchased outright.
Given the advantages of the subscription model, with its lower marketing demands and its relative revenue stability, it’s clear why so many entrepreneurs are choosing to launch subscription-based businesses. If you’re in that position, you need to make it past the competition to achieve your goals. Here are some tips for getting it right:
Find a niche you’re willing to consistently serve
When you’re running a regular ecommerce business, you can easily switch things up as you go. If you want to start stocking different products, you can slot them alongside your existing lineup without any issues, and simply stop advertising the legacy items. Things aren’t so simple with subscription businesses. By the time you achieve success, you’ll have a base of customers who know you only for your core services — and you’ll need to keep your focus on them because subscription revenue isn’t upfront. It trickles in over months and even years.
Let’s say you opt to target the potentially-lucrative snack market, for instance, selling snack boxes each month. Given the incremental payoff, you’ll need to commit to that task for a long time, and that’ll only work if it’s a niche you actually care about. You’ll otherwise get sick of it, want to branch out, and run up against the problem noted above.
In other words, you must only rely heavily on your initial target audience if you’re happy to keep your focus on that audience in the long run. You can always launch a second business if you have the capacity, but your reputation will stand or fall on how you treat those who build your brand with their customers. Let them down and you’ll suffer the consequences.
Look for flaws and gaps in existing services
Whatever your business idea may be, there’s surely another company out there doing something very similar (or even the same). This doesn’t mean that you should give up and start searching for true originality. Instead, it means you should draw upon your investigation of that company and any other companies in that situation. The more you learn, the better.
If you can figure out what their flaws are, you can ensure that your subscription service lacks them. At the same time, you can discern their strengths and take heavy inspiration from their efforts. It isn’t about copying anyone else. It’s about assessing the competition and figuring out the most efficient way to place your business at the top of the heap.
Establish a strong software foundation
Running a subscription business takes more than dedication and effort. It also takes software, as with any other online operation in the modern world. The better the software, the easier your managerial work will be, and the more time you’ll have to commit to vital tasks like serving as a figurehead and selling people on your corporate brand.
From an ecommerce standpoint, you’d do well to base your store on Shopify. It’s a robust, powerful and flexible CMS with a broad array of apps and integrations that can help you make progress. In addition to that, try managing subscriptions with Chargebee: there’s a Shopify integration you can use, naturally, and the Chargebee platform will make it much simpler for you to modify subscription tiers, upsell existing customers, and generally make vital tweaks.
Remember to stay apprised of relevant industry trends. Your competitors may talk about new tools they’re considering, and that’s worth noting. You never know when something better will come along and warrant changing your setup. But if you can make some great choices in the launch phase of your business, it’ll save you a lot of trouble during the essential formative years.
Request and act upon customer feedback
Lastly, your focus on customer service isn’t something you should start thinking about a year into operation. It’s something you should take action on immediately after getting your business up and running. First impressions matter, and your first customers — likely the hardest to win over — will make or break your fortunes in the short term through their social proof. Do they rate what you bring to the table, or do they have major regrets? Do they approve or disapprove?
When you deal with your first customers, then, be sure to ask for honest feedback, and make a sincere effort to make requested changes. The sooner you can demonstrate that you’re willing to adapt based on customer prompts, the sooner you can build a reputation for being humble and forward-thinking — and merely having those qualities associated with you can go a long way towards convincing those on the fence to give you a shot.