Starting a Subscription Business?
Starting a Subscription Business or Membership Site? Here's how to easily avoid these 5 common mistakes…
If you’re considering starting a subscription business, the prospect of that beautiful, shiny recurring revenue is probably dominating your thoughts.
The subscription economy is a healthy one to be part of, for sure.
All the tools are available to help you create a flourishing membership site or subscription-based business and the revenue will come – but only if you get your business set up correctly.
It won’t just happen. For every successful membership-site, there are four or five that fail because the business owners have not prepared the groundwork properly.
Starting a Subscription Business…The FACTS!
I can help you avoid becoming one of the failures and instead make the decisions that create another success story.
Let’s start by looking at the common mistakes that I’ve seen other subscription businesses make.
Avoid these and you’ll be on the right path from the beginning…
1. Lack of homework
There are now so many subscription-based businesses out there to learn from that it’s almost criminal not to research them for the aid of your own business.
Simply diving headlong into setting up your own business without considering what’s gone before and what’s currently out there will lead to you repeating the mistakes that others have made.
The most important areas to research before getting started are:
- Demand – do people actually want what you’re offering and are they prepared to pay for it?
- Problems/solutions – what are the main problems that your products/services solve?
- Your target market – who are you trying to attract and why?
- The main questions in your customers’ minds – what do they want to know? What are their pain points?
- The competition – what’s already out there and is there a gap in the market?
- Unique Selling Points – why would anyone choose you over a competitor?
- SEO – how are you going to rank and be found?
- Marketing strategies – how else will you reach your potential customers?
- Platforms – which platforms are you going to use to enable you to communicate with, market to, and track customers?
By taking the time to research these questions upfront (if necessary, by surveying your target audience) you can save yourself time and expense further along the track.
Online resources and survey software now make research much easier than before.
2. Delays in charging for services
If you’ve got a great product or service, back it!
Start asking for money early on as that’s the only way to prove that you’re onto a winner.
By all means, provide the free tasters of the value you provide. You can still get members into your subscription business with freebies, promotions, and offers. Great!
But at some point, early on, you need to verify that you’re providing enough value to people that they are willing to pay for it. Otherwise, you don’t have a business, you have a charity!
Some startups won’t even launch until they have plenty of pre-orders.
All businesses require cash flow. So, if no one is prepared to pay for your product or service, you will always be on to a loser with your subscription business and will need to have a re-think.
If people will pay for what you offer, great! Push ahead but make sure that you’re charging enough for your service. Winning customers simply because you’re cheaper than the competition is not a very sustainable business model.
If in doubt, price a little higher rather than lower and see what happens.
3. Inactivity due to analysis paralysis
Over-analyzing your business model will lead to inactivity.
Sometimes it’s just better to throw a load of mud against the wall and see what sticks. Don’t be afraid to experiment and make mistakes with your business because the alternative is usually worse: doing nothing.
You can adjust all the key aspects of your business once it’s out there and you’re talking to clients:
- Pricing can be amended according to demand
- Your product or service can be improved according to feedback
- Your processes can be simplified when you know what the blockages are
There will always be elements of your business that can be improved but, when getting started, close enough is good enough.
Don’t aim for perfection as this can tie your hands and cause you to wait, wait…and keep on waiting.
4. Failure to focus on providing a great customer experience
Before you even consider Starting a Subscription Business, Customers today expect more than good service and good customer support.
These basics are almost taken for granted. You need to go beyond that in order to retain your best customers and create a loyal community of followers that spread the word and attract new customers.
Good customer support is about simply reacting to problems and providing solutions in a timely manner.
A great customer experience, on the other hand, is about:
- Providing an easy-to-use website
- Engaging customers with the content you provide
- Providing an always-open communication channel to solve problems and answer questions
- Providing customers with a clear “journey” through your business
Your customers are the most important element of your business – not your products and services.
Starting a Subscription Business…Is About “THEM” NOT “YOU”
Invest time and effort into their experience and you will:
- Reduce churn
- Increase the lifetime value of customers
- Create a loyal band of advocates for your business
Remember, it’s five or six times harder to win new customers than to sell to existing customers.
5. Not using the right automation tools
The purpose of starting a membership site or starting a subscription business is not usually to make life harder for the business owner – it’s the reverse.
You can only achieve this if you automate the parts of your business that can be automated and use the right tools to do so.
For most subscription businesses, this means automating much or all of the following:
- The subscription process
- Making purchases on your site
- Managing the recurring billing requirements
- Communicating with members and prospects
- Organizing different permissions for different membership levels
- Processing refunds
- Multi-channel marketing campaigns
If you can remove most of the time-consuming and repetitive tasks, it helps you free up your time to help where your input is really needed.
Many people will become members of your site because of you and your expertise. If you remove this most valuable element from your business by automating everything you may alienate customers.
Create a good balance. Use your time where you’re needed most but don’t do the repetitive admin tasks that your software can handle. Otherwise, you’ll be working “in” the business too many hours per week.
From my experience, Infusionsoft and a variety of plugins including my favorite, Memberium, are the best way to help you run a subscription business with the right balance of marketing automation and personal input.
If you want to find out a little bit more about Infusionsoft what not read this recent article I wrote… Infusionsoft – 7 Great Reasons To Choose It For Your Business.
Get your subscription business right from the start
Avoiding the above five mistakes is a great start.
I hope this article doesn't prevent you from Starting a Subscription Business
Of course, there’s a lot more to building a successful subscription business and nobody said it was simple.
It involves hard work at the beginning but the whole idea is to create a business that ends up more or less looking after itself.
The hard work does pay off and it helps you create not only the business you want but the lifestyle you want – if you get it right!
Starting a subscription can actually be a lot of fun!!
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