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With free shipping and the ability to read, shop and stream movies and music on your electronic devices, Amazon Prime’s subscription service couldn’t be more spot-on about its membership offerings.
Many entrepreneurs might see how successful Prime’s service is and want to emulate that success. But where do you begin? If you’re considering launching a subscription service as an add-on to your existing offerings, here are the nuts and bolts you need to keep in mind before getting started.
Determine the draw to signing up for your subscription service
A subscription service can be a double-edged sword. On the one hand, it’s an offering that provides your business with a reliable source of revenue. Once the customer has subscribed, they’re likely to stick around to see what you’ve got to share with them. On the other hand, subscription services require entrepreneurs to factor in churn. Customers are free to cancel their subscription at any time, which means that revenue can dip. When it dips, it’s up to you to determine how you’ll be able to retain existing customers as well as grow your base.
Figure out what the draw is for subscribers. Think about the value your service can offer their lives and how that value can evolve over time to continually meet their needs. Do your research to determine your target audience and how you can engage with them to build a strong relationship together. Finally, don’t forget to be yourself. Look at what differentiates your brand from everyone else and integrate that aspect into your offerings.
How will you handle it from a technical and billing standpoint?
You know your customer base and have figured out the value your subscription service can offer. If you do take a page from Amazon Prime’s membership playbook, you’ll probably borrow their 30-day free trial offer to entice customers to subscribe.
What happens when the trial ends, though? Typically, subscription services will then bill the customer’s credit card in small increments monthly or annually, which the customer agrees to before signing up for the trial. From pricing to billing tools, it’s key to strategize the following areas to ensure successful subscription service sign-ups and renewals.
- Set your price before your service launches. This allows you to bring in a strong cash flow early on and create a budget that covers your expenses. Remember, you can adjust pricing over time as your business grows, so this isn’t a number that is set in stone.
- Figure out how your recurring billing system will be structured. You can build your own internally or opt to use an outside tool or app for fulfillment assistance and revenue growth.
- Test it out and make sure that there aren’t any bugs in the system.
- Offer a 30-day free trial with a special promo code. We mentioned this earlier, but it’s still a great incentive to utilize if you’re new to the subscription service game and want to establish trust with consumers.
- Don’t forget about customer service! Even if you’re just starting out, you’re going to need someone to answer questions or provide assistance to customers who need help.
Create a marketing strategy
Your marketing strategy should tap into organic and paid growth within your specific industry, social proof of your offering (like positive Yelp reviews or noteworthy influencers who can speak highly on your brand’s behalf), and how you plan to advertise. Other areas to touch on include the social media presence for your service, newsletters, press releases and media pitches, and even a pre-launch event to get everyone talking about the new offering before it’s fully live.
Build it and they will come, right? Not exactly! More often than not, marketing is given a lower priority than execution, but the reality is that a marketing strategy is a must-have before your subscription service launches. Build it along with buzz, and then they will come.