In my last article, What You Can Learn From Netflix To Make More Money With Less Stress, I shared the reality that business can be unpredictable at times, so the lifeblood of every successful business is having repeat customers. And the best way that I have found to make sure you have repeat customers is by creating a subscription-based product or service.
I highlighted Netflix as a great example of a successful subscription service. If you would like to read the full article, CLICK HERE.
Today, I will be sharing about the different types of subscription business models that you can use (Netflix is only one type of subscription model). There are probably over 10 different models that I am familiar with and will highlight 3 of them below…
3 Subscription Business Models
1. The Front-Of-The-Line Model-you can sell priority access to a particular group of your customers.
Examples: Disney World Fast Pass, Priority Check-Ins at airports, Expedited Customer Service Support via phone.
This model works best for:
- A relatively complex product or service.
- A customer base who are not overly price sensitive
- A customer base for whom waiting in line can have catastrophic consequences.
Tips:
- Can be used in conjunction with other subscription models to add an additional revenue.
- Must already have a good reputation for baseline services.
- Must leverage technology and systems (ex. Zen desk’s priority customer service)
- Works well if your customers are small/medium-sized businesses that lack their own in-house resources to get their questions answered.
2. The Membership Website Model-you publish your know-how behind a paywall that requires members to buy access to your insider “secrets”.
Examples: Ancestory.com, Marie Forleo’s B School, Daily Burn,
This model works best for:
- Tightly defined niche markets
- Niches where insider information is constantly changing and your subscribers need to know.
Tips:
- Utilize an online programs with short videos, pdf worksheets, webinars, blog posts, transcripts or podcasts.
- Be sure to utilize all the data you learn from your customers.
- A great entry point for up-sells and cross-sells
- You can further monetize by offering affiliate products, sponsorships, or hold live events.
3. The Private Club Model-as a subscriber, you have access to a luxurious, rare opportunity and also the chance to meet with a network of others people who, like you, made the cut.
Examples: Richard Branson’s Necker Island Mastermind, Exclusive Golf Clubs.
This model works best for:
- A service or experience that is limited in supply, but in high demand by affluent customers.
- A market of achievement-oriented “strivers”, who are always attracted to the greener grass on the other side.
Tips:
- Never offer a la carte access. Force customers to make a decision: if they want access to something truly rare, the only way they can have it is by entering into a long-term relationship.
- Make sure you never dilute the value proposition.
So what’s my experience with subscription business models? After getting my start in the personal training industry, I quickly learned the pitfalls of the business model everyone else used (which was session packages) and thought there had to be a better way.
Over the course of 7 years, I learned from industry leaders and business experts exactly how to successfully use subscription-based products and services. I now help other coaches and consultants setup up their own successful subscription business models.
In my next article, I will be sharing step-by-step instructions on how to setup your own subscription payment button and have it up on your website in only minutes (and its FREE). Click Here to read the article.
I would love to take your questions around this topic. Click the button below to ask your questions and I will be sure to respond to you.
Chris Rudolph is a husband, father of 3, and a Freedom Business Coach for Digital Marketers. He specializes in working with those who are underpaid, hustling around the clock or missing out on valuable family time build their own Freedom Agency. He helps them grow their income, scale with a team and enjoy more time with their family.
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