Can you turn your product or service into a subscription that offers a differentiated way to do business?
Companies that offer the same service as their competitor, might find the subscription approach a novel way to be distinctive and to change how your brand is viewed.
In some industries, most people are used to purchasing a la carte. The best known disruptor was Netflix who altered the way we rented videos. Instead of going into a store (remember Blockbuster?), we can now buy all we can eat or view through a subscription.
But what about other categories?
Take the home maintenance industry AKA The Handy Man. You can get a subscription to a handy man service from www.myhasslefreehome.com For $200 per month, they will come in a do a detailed check throughout your home to protect your home in advance of a bigger problem. Think of it like a monthly checkup to prevent bigger problems.
Another innovative subscription service is hBloom. They have a subscription service for delivering flowers on a regular basis. You can have fresh flowers in your office every week or once a month. The beauty of the arrangement is that you can have hBloom handle everything and all you do is pay a regular monthly fee. Their home services start at $75 per delivery and offices, hotels, restaurants and buildings are all customized to meet your exact need.
Recently AMC announced that they were bringing a Netflix model to the movie theatre in Boston. For $35 or $45 per month, you have an unlimited pass to the multiplex. 18-34 year olds who are the core demographic, will find this pricing appealing if they see movies at least once/week. It’s an experiment but one that is based on providing value to frequent customers. This innovation will be popping up around the country soon.
Imagine signing up for drawing, painting or sculpting lessons at an art school. You could pay $800 for a semester. Or, go to New Master Academy online and sign up for a subscription to any class for about $30/month. Your classes provide you with a library of over 500 hours of training. Learn at your own pace wherever and whenever you want.
Subscriptions can work for lots of business but you need to provide an anchor pricing value of close to 10X according to experts. So your reference might be something costing 10 times more if you bought that service separately. Sometimes, that math might not work for some categories but it is worth considering if you can turn occasional customers into frequent customers.
The Benefits
- Reoccurring and dependable revenue stream
- Differentiation of your brand/business from the competition
- Appeals to frequent and heavy users of your product and/or service
- Changes the value proposition from a single occurrence to an ongoing relationship model
To learn more how this might help your business, check out The Automatic Customer, a book by John Warrillow that provides a range of ideas on this topic.
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