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Imagine what your business would be like if a significant portion of your earnings automatically recurred each month. Sounds enticing, doesn't it? Companies everywhere are offering subscription-based services and millions of online shoppers can’t get enough. Interested in grabbing a piece of that pie for yourself? Read on!

The subscription-based selling model can take several forms. Three popular examples are outlined below:

 

Product and Box Subscription

Do you have a monthly product you can send out to subscribers? Chewy is a great example of a product/box subscription service; a box of whatever your pet needs arrives on your doorstep at intervals determined by their customers. This model can work for you, too. For example, if you own a quilt shop, this would be a great option for Block-of-the-Month kits (BOMs). It would work equally well for digital content creators to offer regular download bundles. This is a tried-and-true subscription model that you can rely on to offer your own type of subscription.

 

Service Subscription

Do you offer repair or service work, long-term rentals, or online Software-as-a-Service (SaaS)? Offering a package deal with reasonable, periodic charges for regular services appeals to many customers. Many of us regularly use Microsoft Teams, Skype, or Slack to communicate and collaborate – all examples of SaaS applications. A common long-term rental would be school instruments. As musicians grow with their instruments they’ll often return to your store to purchase accessories like reed kits and swabs and there’s a good chance they’ll look to you when they’re ready to own their own instrument.

 

Membership

If you run a club or program that offers benefits to members for which your normal customers are not eligible, charging a small annual fee can be a great way to add to your bottom line. The more benefits you offer, the more you can earn. Hosting group and club activities increases customer loyalty, driving further sales for items or services your members want. A great example of a membership subscription is Amazon Prime; Prime members have early access to deals, free shipping with easy returns, and more. This gets people shopping more on Amazon from their couches versus the “hassle” of driving to their local Walmart or Target.

 

Other popular subscription styles include:

• Digital streaming subscriptions such as Netflix, Spotify, and Audible

• Educational subscriptions such as MasterClass or Coursera

• Gaming subscriptions such as Xbox Game Pass and PlayStation Now

• Health and Fitness subscriptions such as Peloton and Fitbit Premium

• News and publication subscriptions such as The New York Times or Consumer Reports

Not sure yet if subscription sales are right for your business? Below are five great reasons to consider it.

 

Programmed Earnings

The generation of Programmed Earnings is income generated through a subscription; a business sets up a recurring revenue stream that regularly generates income without human intervention. The sales process is automated for reliable income over time. Or, in simpler terms, your customer’s accounts are automatically charged a set fee on a regular basis depending on their subscription. Increased numbers of subscribers means increased earnings for you. Unlike the sometimes seasonal, fluctuating revenues that retail selling often suffers, the programmed periodic earnings of subscriptions fluctuate very little.

Every subscription program can expect a churn rate; a small percentage of subscribers will cancel while others sign up. Ideally, your adoption rate for new subscribers exceeds your cancellation rate, so your program grows steadily, but you may experience income decreases in addition to increases over time.

However,  there is security in knowing that on that certain day each period of the subscription, your Rain POS system automatically runs charges for each of your subscribers and your bank account steadily and dependably sees an influx of revenue.

 

The Mode is Appealing

The Internet and the mobile data revolution has made nearly everything more convenient and automated than ever. Shopping is no exception. Subscription sales satisfy our desire for easier everything by reducing the shopping decision to just one: Do I sign up, or not? Once you've signed up, the expectation is that you'll continue paying periodically, and the company will continue delivering what you have signed up to receive.

As long as those expectations are maintained, the mode of buying remains satisfactory. While that’s great, the subscription model also lends itself to making that initial decision easier for the customer. Instead of one large payment, customers are able to spread it out so all they feel is the first small payment. Safety nets such as, 30-day Free Trial, and No Contract: Cancel Any Time further reduce resistance. Nobody likes a contract. If you, the seller, are doing your job right, you're making it easier for the customer to stay with you by keeping that satisfaction threshold positive. Find ways to exceed expectations, like throwing in freebies, and suddenly you have a subscriber base that's recommending you to friends and loved ones. And that leads us to the next reason...

 

Your Opportunity to Shine

Do you take pride in your service excellence? It's nearly impossible in today's world of instant online reviews to succeed unless you’re prioritizing customer service, regardless of your business model. Word-of-mouth reigns supreme and can easily make or break your business. If service is a point of pride for you, subscription or membership selling is your chance to truly stand apart from your competition.

How can you improve your customer service?

• Practice rapid-response communication.

• Be willing to eat occasional costs to satisfy customers that are having a bad experience.

• Always ask yourself, "How can we make this even better for our customers?" and follow through.

That kind of effort will be felt by your customers and they'll reward you by talking about how wonderful you and your company are. That kind of publicity is priceless, and will go a long way toward achieving your revenue goals.

 

Programmed Fulfillment

Programmed Fulfillment is the automated management of order processing, inventory management, and product delivery for a business. By using technology and software to streamline and automate the logistics of fulfilling your customer orders you can increase accuracy, reduce errors, improve delivery times, and enhance customer satisfaction. When these things are poorly managed, you risk losing customers. Adding a subscription model to your sales strategy makes that part of your business run more smoothly. Each month you'll have a clear idea how many sales you’re making with each subscription so that you can take the necessary steps to ensure that you have on-hand what you need for each subscriber. Accounting for shipping and other costs also gets easier with this model.

Programmed fulfillment makes your entire business function more securely: it's better to work with known quantities. There is always some guesswork in inventory management, but subscription models allow for more comfortable error margins than standard retail. Plus, any excess items can be sold as standalone inventory.

 

Long-Term Loyalty

Most of our clients have brick-and-mortar stores, and part of our goal of Reinventing Main Street is to create a variety of opportunities for you to sell more. Subscriptions are a great example: this selling model is a new avenue for you to improve your bottom line. If you're succeeding, then we're helping traditional retailers to thrive in a world with small-business-crushing giants like Amazon and WalMart. That's what Reinventing Main Street is all about.

The subscription selling model has synergy in this area: If your subscription is succeeding and growing, you are building loyalty over a much longer term than the traditional buyer-seller relationship. Your local subscriber customers are going to demonstrate that loyalty by walking through your door and coming to you for your other offerings more often than if they weren't happy subscribers. Your non-local subscribers are more likely to shop your online store because they know and trust your service. Build on that synergy by rewarding their loyalty with coupons and special offers that only subscribers can get, and you've got a recipe for significant growth.

 

The Three Rules of Subscriptions You CANNOT Break

You're now familiar with the five major benefits of subscription sales. They are all compelling reasons to consider launching a subscription or membership program of your own. But be aware, if you do move in this direction, there are some rules you need to follow if you're going to be successful:

1. Communicate Reliably - Reply quickly, communicate with full details, and be proactive wherever possible. Your communication lets your subscribers know that they're not dealing with a robot. Add a healthy dash of your personality and respond in a similar way when you communicate with people who love you or with people who are angry or frustrated. Unresponsive subscription services and ones that communicate minimal information are more likely to get dropped, so stand out by consistently communicating well.

2. Dependable Delivery and Pickup - Diligently schedule the time and manpower needed to fulfill the shipments for your subscribers. Do not drop the ball. Hopefully, during the process of signing up for your subscription, you informed your customers about what to expect on delivery times. Do everything in your power to meet those expectations. If something happens that's beyond your control, be sure to communicate with subscribers and give them an accurate estimate of when the delayed delivery will take place.

3. Be Excellent - Do you get excited about anyone who just goes through the motions and does the minimum? Neither do your subscribers. Make sure your subscription has excellence woven into it wherever possible, and never stop looking for ways to do it better. Your constant effort in this area will pay off with loyalty and word-of-mouth referrals as you consistently find ways to improve. Good enough isn't good enough; do it better!

Click here for detailed information about how Rain POS's Subscription module works: Product Subscriptions

 

Educate Yourself

If this is an appealing prospect (and who doesn't like the idea of automated earnings?) take a look at this informative series of articles by Forbes about this kind of marketing and how to prepare for this kind of business model.