How can my company run as a subscription business?

Estimated read time: 5 minutes



The subscription business is an exciting topic because, in theory, it can stabilize the revenue stream for companies and build long-term relationships with customers. Customers sign up for the subscription and may never cancel as long as they like it.

The subscription business model typically comes to my mind in the software field. You sign up for software and pay a yearly or monthly fee to use their product. For example, I subscribe to Canva, Restream, and Buffer on a professional level. On a personal level, I subscribe to DIRECTV, Netflix, and Ring, just to name a few.

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What businesses should run a subscription business model?

I asked that question to Chris George, cofounder, and chairman of the Subscription Trade Association, on my podcast.

It’s hard to come up with any business that can’t offer something as a subscription. As long as you have a product that people need, you could consider sending them a new one every so often as part of a subscription. Or if the product needs to be serviced often, you could sell that as a subscription.

He likely has a point. The other day, I even saw a subscription model for a robot vacuum cleaner. You pay a monthly fee and they send you the necessary accessories when needed.



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How to make the subscription business model human

Subscription business model expert and author Robbie Kellman Baxter joined me on an episode of my podcast to discuss what businesses need to consider when running a business on this model.

You still have to make the experience excellent and worth subscribing to. Don’t hide the unsubscribe button. Make all parts of the experience worth experiencing.

She discusses the concept of the forever transaction in her book with the same title.

The subscription business is easier for the customer

Many subscription products are sent to me, especially through Amazon Subscribe and Safe. It’s just easy. The stuff arrives at a certain interval which I can also change. I order a variety of products, including supplements.
supplements ordered online
Everything arrives unless I cancel; Amazon will send me a package that often includes:

  • Protein bars
  • Protein powder
  • Pre and post-workout shakes and supplements

This system works and makes shopping easy. Amazon sends me once a month the items I’m planning on using the following month. When I want to stop a specific delivery piece, I simply log in and put a hold on it. Easy breezy.

Offline vs. online

I was also reminded how much easier it is to subscribe to products online versus going to the store. Somebody gave me a $25 gift card to a sports nutrition store. So I went to the store …

“Hello. What brings you in.”

“I got a $25 gift card.”

“What are you looking for today?”

“Maybe some protein bars.” Really, I just came in because of the gift card.

We walked over to the protein bars, and of course, she asked me if I had the store’s membership or gold or whatever card. You know, the kind that gives me so many percent off.

I found a box that was around $25 and decided to get that. We were heading to the cash register. All done.

“And any multi-vitamins today?”

“Umm. No.”

It just seemed very scripted and not personalized. She could have asked about my workout regime and then made personalized recommendations based on what I actually do at the gym. Offering me multi-vitamins reminded me of my daughter, who takes multi-vitamins.

But had she asked me about my fitness goals (weight loss or at least weight maintenance, and I love to lift), she could have made more relevant suggestions, including some of the things I get monthly already anyway.

But it would have offered an opportunity for me to actually be open to buying more.

It’s like the offline version of “Recommended Items” online, but you do have to ask the right questions.

Of course, even the brick-and-mortar stores use some subscription business pieces – especially on their websites.

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Keep track of your subscriptions

Whether you are a business or a consumer, ensure you are keeping track of your subscriptions. I’ve been in several situations where businesses had so many subscriptions that weren’t even being used. That, of course, also does not leave a good taste for the consumer.

Some companies even send you an email informing you that your subscription is about to expire just in case you want to renew or cancel it if the product is no longer in use. Certainly, that can cost you some revenue as a company if more people than do not cancel the product, but it can also earn you goodwill from the customer base. More importantly, I would ask myself why people aren’t using the product. From there, make product updates.

Read next: Are some consumers canceling subscriptions because of the economy?

How to get started

I’m a big fan of having ongoing relationships with companies that make my life easier and that get me value. I want to have a subscription with them.

And sometimes I’m annoyed when I’m shopping, and I can’t order something as a subscription. That happens on Amazon from time to time when it’s a product I would have to re-order down the road but it’s not offered that way.

To start, look at what products and services you offer that lend themselves to that ongoing relationship.

I mean, you can now buy underwear as part of a subscription. I never thought I would need that, but people subscribe to new underwear. So even if the subscription model sounds like it’s not for you, take a step back and consider all the options.



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