24 Oct How to Add Subscription-Based Revenue to Your Business
Adding a subscription-based product or service to your business has many benefits. It provides a predictable stream of revenue, increases customer loyalty and offers richer customer data, to name a few.
According to Zuora, Inc., subscription businesses have grown nearly six times faster than the S&P 500 over the last 10 years.
But how do you implement this model for your business? Here are 6 ways to get started.
1. Determine if this model would work for your business
To add subscription-based revenue to your business, the product or service you offer should fall into one of three categories: curation, replenishment or access.
-Curation can include items such as clothing, pet accessories or beauty products.
-Replenishment is a recurring order of household goods, like toilet paper and cleaning supplies.
-Access is when customers pay for content or a premium service, like online media.
If your business offers one of these three forms of products or services, then adding subscription-based revenue is easy. Your customers will pay for the product or service on a set timeline, such as weekly or monthly.
2. Research your competition
Whatever type of product or service your business offers, there’s likely already a subscription model for it. So, think of ways to differentiate your offerings from your competitors. Gather samples from your competitors and decide what you like about them and what your business can do better. Price and value should also be factors in your research.
Then, to decide which product or service to offer as a subscription, map out how your best customers interact with your business.
3. Analyze your target audience
Identify what your existing customers would be most likely to buy on a regular basis. Look at your loyalty program for ideas on what your best customers buy repeatedly.
Offering your products or services as a subscription can attract new customers, especially if you entice them with discount codes or other introductory offers.
Both new and existing customers like the convenience of receiving a recurring product or service in which they are billed at regular intervals—and often at a more affordable price point. Subscription models save customers time by avoiding trips to the store, plus you can introduce them to products or services that aren’t available elsewhere.
4. Create your subscription model
Once you’ve decided which product or service to offer as a subscription, you’ll need to create your subscription model. To determine what you’ll charge, consider factors such as the cost of the product or service you’re offering, shipping materials (if applicable), advertising and marketing expenses, and business costs. According to SquareUp.com, a good rule of thumb is to have at least a 45% profit margin to sustain your business.
Next, determine your pricing model. You can offer discounts for committing to a set number of months or for certain groups of people like seniors. You can also consider the “freemium” model, which offers limited free access to some of your products and services; however, customers will have to sign up for premium access to enjoy your full offering of products and services.
5. Market your product/service
Now that you’ve set up your subscription model, you’ll need to spread the word. Prepare marketing materials and start sharing them online via social media. Email your existing customers—and even offer them a special loyalty discount—to let them know about your subscription model.
Engage with your customers as much as possible and focus on high-quality customer service. Remember, selling your product or service is about selling a relationship with your brand.
6. Partner with a quality payments processor
To ensure the success of your subscription-based model, partner with a quality payments processor. Your customers want a convenient and safe way to make payments. Select a credit card processor that can integrate into your billing software with features like email invoicing, text-to-pay and automated recurring payments.
Final Thoughts
Adding subscription-based revenue to your business takes some strategizing, but by following the steps above, you can start the process today.
Call BASYS Processing at (800) 386-0711 to discuss an integrated payments solution.
BASYS Processing as a business partner
If your processor doesn’t offer seamless integration, an industry-leading revenue share, and personal service for your users, please call BASYS Processing at (800) 386-0711. Let’s talk about creating a business partnership that will help you meet and exceed your goals.
BASYS Processing features:
-User-friendly API allowing for seamless integration into your software.
-Competitive revenue share, and easy-to-read revenue share reports tracking growth.
-Personalized customer solutions including automated recurring billing, secure customer vault, and more!
-A friendly, live voice will answer the phone when you or your customers call; no automated phone systems.
-In-house PCI Compliance team to walk your customers through the process step-by-step, improving security and reducing costs.
-Access to our marketing department, plus a full suite of marketing materials, blogs and videos
About BASYS Processing
BASYS Processing provides credit card and debit card processing services, plus solutions that include terminals, virtual terminals, e-commerce, mobile, and point-of-sale, customized to fit any need. Banks, associations, and software partners depend on us to strengthen their reputations and relationships with their customers by providing remarkable service paired with ultimate flexibility and pricing. Merchants depend on us to make accepting credit cards and debit cards convenient, safe and affordable. BASYS was founded in 2002 on one philosophy: to take care of our merchants, partners, and employees so they never want to leave. We are dedicated to working one-on-one with our customers to design the perfect solution. BASYS is Personal Payment Processing.
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