Sales Pitch

Subscription Selling Idea # 1: Think 10 × vs. 10%

If you are thinking about subscription based selling, read this excerpt from John Warrillow’s book, “The Automatic Customer,” to get started with subscription based selling.

The Psychology of Selling a Subscription

JohnWarrillow_9781591847465_AutomaticCustomer_JKF

Consumers are aware that a subscription relationship is much more valuable to you than a onetime purchase. So to get them to commit you’ll need to give them a big return on their investment. A consumer with an acute case of subscription fatigue is unlikely to subscribe just to save 10%, but she might be convinced to subscribe if you could make a case that she will enjoy 10 times the value of the alternative.

For subscribers to the online art school New Masters Academy, $29 per month buys access to 350 hours of video tutorials. The going rate for a one‑ day in‑person art class from a New Masters Academy instructor is $ 600- 800, so you get access to 350 classes each month for around one‑ twentieth the cost of an in‑person lesson. As New Masters Academy founder Joshua Jacobs said, “We provide a ridiculous amount of value.”

At Genius Network, the private club subscription program for some of the world’s leading entrepreneurs, Joe Polish promises prospects a 10X (10 times) return on their investment. Polish loans each new member an iPod pre‑loaded with $80,000 worth of marketing “how to” content. The member can keep the iPod as long as she renews her subscription. Polish is so confident in his 10X promise that he tells new members that if they do not feel they are getting 10 times the return on their investment with Genius Network, he’d rather they not renew.

Netflix provides access to tens of thousands of titles for less than $10 a month. GameFly subscribers get 8,000 video games to choose from for a few bucks a month. Rdio provides a library of millions of songs each month in return for the cost of a fancy coffee. It makes economic sense to the customer to use these services instead of purchasing each DVD, video game, or MP3 individually.

From 0 to 95,000 Subscribers in One Year

How much did you pay to print your last set of digital photos?

Every holiday season, we trudge down to the grocery store and print off some photos of our kids for our relatives who live in the UK.

Last Christmas, I spent around $30 for a stack of happy snaps. For exactly one‑tenth of the price, I could have subscribed to GrooveBook, a service that ships a bound book of 100 glossy 4.6 photos to your door each month. Each photo is perforated so you can remove your favorites and put them in a frame or on the fridge door. A hundred photos from the grocery store might cost you $30; if you use one of the online photo‑printing companies, you could get the price down to around $20. But a GrooveBook subscription costs just $2.99 per month, and that includes shipping and handling. All you need to do is download the free application on your cell phone, upload 100 shots, and hit “submit.” About two weeks later, you get a beautiful little book of your memories.

It’s a 10 times better offer made possible because founders Brian and Julie Whiteman own their own printing press and have developed a patented technology that allows the book of photos to bend slightly when it is shipped, enabling them to mail a GrooveBook for 78 cents via the United States Postal Service.

By early 2014, after just one full year in business, GrooveBook was up to 95,000 subscribers — 90% of whom are moms tired of the complexity and hassle of printing their photos at the grocery store. They are subscribing because GrooveBook is simpler and, at $2.99 per month, a 10 times better value than the alternative.

WhatsApp adds a million users a day because, at $1 a year, it offers at least 10 times the value of messaging through a mobile company that has customers paying north of $100 a year just to send texts.

Think “10 times” whenever there is an easy way for your customer to get your product or service without committing to a subscription.

“Excerpted from The Automatic Customer: Creating a Subscription Business In Any Industry, in agreement with Portfolio, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright © John Warrillow, 2015.”

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