recurring revenue streams for products/services?

[Cano]

Somehow i feel like a good product/service business does have recurring revenue because the lifetime customer value per acquisition is just so much more lucrative and scaleable:

10 Customers / 12 Months x 500€ Product =
1 Year: 5000€ (10 C.) => 2 Year: 5.000€ revenue (10 C.)=>3 Year: 5.000€ (10 C.)

10 Customers / 12 Months x 500€ Subscription (annual) =
1 Year: 5000€ (10 C.) => 2 Year: 10.000€ revenue (20 C.)=> 3 Year: 15.000€ (30 C.)

we need to pay to aquire the customer anyways but to get the customer into a subscription lets us grow exponential.

@Johnny boy lawn care business for example works with recurring revenue because the service can be sold annually/monthly
but some products/services are not always made for that business-modell idealy.

now im asking everyone:

What are ways to add recurring revenue to a product/service business if they arent yet?

How did you add recurring revenue to your business in an unique way?

im thinking that every business can be made into an recurring revenue modell, you just need to find a way to do it.

realy interested to hear all your ideas.

 

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[Andy Black]

Somehow i feel like a good product/service business does have recurring revenue because the lifetime customer value per acquisition is just so much more lucrative and scaleable:

10 Customers / 12 Months x 500€ Product =
1 Year: 5000€ (10 C.) => 2 Year: 5.000€ revenue (10 C.)=>3 Year: 5.000€ (10 C.)

10 Customers / 12 Months x 500€ Subscription (annual) =
1 Year: 5000€ (10 C.) => 2 Year: 10.000€ revenue (20 C.)=> 3 Year: 15.000€ (30 C.)

we need to pay to aquire the customer anyways but to get the customer into a subscription lets us grow exponential.

@Johnny boy lawn care business for example works with recurring revenue because the service can be sold annually/monthly
but some products/services are not always made for that business-modell idealy.

now im asking everyone:

What are ways to add recurring revenue to a product/service business if they arent yet?

How did you add recurring revenue to your business in an unique way?

im thinking that every business can be made into an recurring revenue modell, you just need to find a way to do it.

realy interested to hear all your ideas.

Check out book "The Automatic Customer".

I don't think every business/offer can be made into a subscription. Sometimes people just want to pay once.

For our Google Ads service we charge monthly. This makes sense for clients who want their campaigns managed monthly and who are already spending money monthly on their Google Ads anyway.

For people who buy my courses I switched from a one-off payment to a monthly payment. The two main reasons were to make it more affordable for someone to get started, and because I only want to offer subscription based offerings. Members pay to access the library of videos and SOPs, and to get email newsletters.

 

[Cano]

Check out book "The Automatic Customer".

i will check it out, thanks!

I don't think every business/offer can be made into a subscription. Sometimes people just want to pay once.

would you prefer a subscription business over a non-subscription business tho?

I know it probably depends on what problem you solve with which product / service but now purely theoretically. Which one would you prefer and would you even try to find a subscription modell for your business?

For our Google Ads service we charge monthly. This makes sense for clients who want their campaigns managed monthly and who are already spending money monthly on their Google Ads anyway.

For people who buy my courses I switched from a one-off payment to a monthly payment. The two main reasons were to make it more affordable for someone to get started, and because I only want to offer subscription based offerings. Members pay to access the library of videos and SOPs, and to get email newsletters.

thanks for the insights and your thoughts on this.
Of course, these are now also services that can easily be converted into a subscribed service where you can clearly see the value.

 

[Andy Black]

would you prefer a subscription business over a non-subscription business tho?

I know it probably depends on what problem you solve with which product / service but now purely theoretically. Which one would you prefer and would you even try to find a subscription modell for your business?

As mentioned, I only want to offer subscription based offerings.

 

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[Cameraman]

I'm currently working on offering my courses on a subscription basis as well as a traditional one-time purchase following a chat with @Andy Black. My plan is to offer a quarterly subscription for around the price of a single course which should make it seem like a good deal. I'll also have a course that's only available to subscribers and which drips out monthly content over 24 months (possibly weekly initially). I want to encourage subscribers into viewing my material regularly so that they see the value, to reduce subscriber churn.

Retention is just as important as adding new customers. If you add 10 customers a month but then they all leave after the first month, it won't be very profitable.

Strangely I've also just finished rereading "The Automatic Customer" which is very good. I'd also recommend "Retention Point" as another good source of ideas when setting up a subscription business.

 

[Cano]

I'm currently working on offering my courses on a subscription basis as well as a traditional one-time purchase following a chat with @Andy Black. My plan is to offer a quarterly subscription for around the price of a single course which should make it seem like a good deal. I'll also have a course that's only available to subscribers and which drips out monthly content over 24 months (possibly weekly initially). I want to encourage subscribers into viewing my material regularly so that they see the value, to reduce subscriber churn.

Retention is just as important as adding new customers. If you add 10 customers a month but then they all leave after the first month, it won't be very profitable.

Strangely I've also just finished rereading "The Automatic Customer" which is very good. I'd also recommend "Retention Point" as another good source of ideas when setting up a subscription business.

thanks for your insights.

thats also an Interesting way of offering a course with different options!

to keep retention In mind is also a good point, will keep my eye on this too!

so already ordered the book and started reading, thanks for your both’s recommendations.

 

[fastlane_dad]

Somehow i feel like a good product/service business does have recurring revenue because the lifetime customer value per acquisition is just so much more lucrative and scaleable:

10 Customers / 12 Months x 500€ Product =
1 Year: 5000€ (10 C.) => 2 Year: 5.000€ revenue (10 C.)=>3 Year: 5.000€ (10 C.)

10 Customers / 12 Months x 500€ Subscription (annual) =
1 Year: 5000€ (10 C.) => 2 Year: 10.000€ revenue (20 C.)=> 3 Year: 15.000€ (30 C.)

we need to pay to aquire the customer anyways but to get the customer into a subscription lets us grow exponential.

@Johnny boy lawn care business for example works with recurring revenue because the service can be sold annually/monthly
but some products/services are not always made for that business-modell idealy.

now im asking everyone:

What are ways to add recurring revenue to a product/service business if they arent yet?

How did you add recurring revenue to your business in an unique way?

im thinking that every business can be made into an recurring revenue modell, you just need to find a way to do it.

realy interested to hear all your ideas.

Consumables are great, and @NeoDialectic and I start with the recurrent / subscription end goal in mind with many things we touch.

As we built up several businesses in personal care niches, daily consumables are always a win in this department. Toothpaste, shampoos, supplements, razor blades, toilet paper, etc. Then cross-selling and up-selling various other products on the same brand works wonders.

The products do have to be great, offer value add on the competition. Amazon and other platforms are almost streamlined to offer many of these as a subscription (at a small discount).

The numbers still need to work, but you can pay a bit more 'up front' to acquire a customer, based on what you determine they are worth over the lifetime of their product purchase history.

Not everything we have build a business around though came with a subscription model, and that becomes a much tougher uphill battle from the get-go.

Software and content also come to mind with a great business model supporting recurring revenue.

 

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