Why You Should Build a Subscription-Based Business Model

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Being a small business owner means finding ways to keep cash flowing in. Of course, this is easier said than done, unless you have a great product or service that has generated a substantial amount of buzz. Not only do you have to attain new customers, but you also have to keep your current customer base coming back. It’s a combination of relationship management and lead generation. Learning to balance the two is key. One way of doing this is with a subscription-based business model. If your product or service is great, all you need is a good marketing strategy to gain buzz. Once people sign up, your product or service will keep them paying month after month. You’ll find SEO companies using subscription-based business models.

There are different types of subscriptions you can offer to the public, depending on the industry you’re in. You can offer online access to a series of courses, provide Skype coaching sessions or offer regular deliveries of a product at a discounted price (think of Amazon’s Prime membership).

If you’re not convinced why subscriptions can make for a great business model, read on.

It Makes Cash flow More Predictable

This is probably the number one benefit of having a subscription-based business model. What business wouldn’t want to be able to predict their next month’s cash flow. If you have a great quality product that customers find valuable, then you can still be profitable, even with a churn rate of 20 percent. The main goal is to keep your current customers as long as you can, rather than consistently focusing on selling to new ones.

Your Reputation Precedes You

Netflix is a great example of this. When you offer value at a crazy low rate, you’re bound to earn yourself a few fans. These fans are your brand ambassadors, who will spread the word about your subscription. SEO can also be used to build the reputation of your company.

It Allows Customers to Try You Out

Consumers today are savvy and are more reluctant to purchase from a brand. Setting a subscription at a low price gives these consumers a nudge to try out your product or service. During this trial period, you can build a relationship with them and even potentially upsell to them.

If you decide to work with an SEO agency to promote your subscription service, make sure they have a great track record.

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