Repeat customers. Loyal customers. Every business wants them.
The trick is not just finding customers who provide recurring revenue (better yet, consistently recurring revenue) but finding ways to keep them over the long term.
That's the problem--and that's the problem John Warrillow's The Automatic Customer: Creating a Subscription Business in Any Industry can help you solve.
John is also the author of Built to Sell and the founder of Sellability Score, a subscription-based company that helps entrepreneurs increase the value of their businesses. (He's also a really nice guy; years ago when I was trying to land my first columnist gig I emailed a number of writers asking for a little advice... maybe a contact... something... and John was the only one who took the time to respond. Yep. Nice guy.)
Of course no two businesses, even within the same industry, are the same. That's why John fleshes out nine different subscription business models.
- The Membership Website model--like DanceStudioOwner.com, a site that helps owners create profitable studios
- The All-You-Can-Eat Library model--like Netflix
- The Private Club model--like Exclusive Resorts
- The Front-of-the-Line model--like the SalesForce Success Plan
- The Consumables model--Dollar Shave Club, baby!
- The Surprise Box model--like the aptly named BarkBox
- The Simplifier model--like Hassle Free Home Services
- The Network model--like Zipcar
- The Peace-of-Mind model--like the pet tracker Tagg
Chances are one of these models will work for you. And even if you decide not to add a subscription feature to your product or service offering, the book is full of ways to create loyal customers.
Just as important, John clearly describes some of the financial calculations and metrics you'll need to adopt. For example, subscription models do create consistent cash flow but that flow is spread out over a long period of time--and that means the payback on customer acquisition costs will be longer too.
I don't recommend a lot of books; John's I recommend wholeheartedly. Even if you decide not to add a subscription model to your business it will make you think about your customers--and how you serve them--in a number of new ways.
And that's something every entrepreneur can benefit from.