I worked from home yesterday.
Nothing too unusual there.
Except that by the end of the day I realised that something really odd had happened to my life.
I’ll wager that it’s happening to you too…
Or that it will do, eventually.
Because this trend is heading in only one direction – which is fantastic news for us.
Let me explain…
Why I’m hooked on recurring payments
So yesterday morning I get up as usual. Slightly grumpy and tired, but that’s always the way.
As I make breakfast I play music from my subscription Spotify account… which gives me access to pretty much any album I want for £9.99 a month, including playlists, recommended albums and concerts news.
After that I switch on my computer to start work…
I use my ‘Microsoft Office 365’ subscription to access Word so that I can write DU.
My Adobe ‘Creative Cloud’ subscription gives me access to Photoshop which I use to create and tweak images for client projects.
An hour later I save a document onto my Dropbox… a cloud storage service which I get for £7.99 per month.
Then, late morning, the doorbell rings.
It’s the delivery man with an Amazon parcel. Something I get with free delivery thanks to my ‘Amazon Prime’ subscription, which comes with free films and TV series online.
A bit later the door bell rings again.
This time it’s my ‘Hello Fresh’ box.
That’s a subscription service too.
Having spent years shovelling fats and carbs into my mouth in a mad rush when I finish work, I’m using this food box service to cook a few healthier meals during the week.
They supply everything – veg, herbs, spices, professional recipes, instructions and a binder to create a portfolio of recipes.
Ok, so by this point I felt a bit freaked out because it dawns on me…
I am a SUBSCRIPTION ADDICT!
And it gets worse…
After work when I sit down to watch some telly with Sophie, the show we watch is on Netflix – yet another subscription service.
It struck me – subscriptions really are taking over daily life!
How did this happen?
Ten years ago we had none of these things…
But times have changed rapidly. Like me, many people are now a lot more comfortable with making recurring payments online… and seeing the benefits of this kind of purchase.
Because while it costs a decent whack of money for each subscription I’m aware that I no longer really buy CDs or rent films…
Or faff about on the high street looking for the right ingredients to cook a ‘special’ meal…
Or pay for additional hard drives (which always end up breaking) to back up my data…
I’ve switched from paying for things individually, to paying for the stuff I love (or really need) on an automated recurring basis.
It’s much easier to manage.
And it’s why millions of people are doing the same.
Which begs the question, are we in the midst of a peak subscription economy?
And if so, what does this mean for you?
These are very exciting times because there is HUGE money to be made in the membership subscription business if you do it right.
Whatever niche you’re in there’s almost certainly a part of it that could benefit from a paid membership element.
I mean, consider the benefits…
• Increased loyalty. Customers feel like they have joined a tribe, community or privileged club of like-minded people. Once they have committed to a subscription, they’ve invested in your business emotionally as well as financially and will pay much more attention to your messages and products.
• More profit. Recurring automated payments bring in more money than businesses where you have to rely on a customer choosing (or remembering) to come back. It’s much better and easier than having to continually ask them to buy something.
• Less cost and effort. Once you have set up the system and got a customer on board, you don’t then have to pay to keep advertising to them. Nor do you have to deal with processing payments over and over again. The system does it for you on an automated basis.
• Less stress. Once you set up a basic membership service you can keep adding content and products over time, rather than having to fulfil everything at once. You can build your business slowly and reinvest your profits as you go.
• Less hassle. If your subscription is completely online you don’t even need to worry about postage and packaging.
These are the reasons why big companies like Netflix, Amazon, Microsoft and Sky use this model
And it’s why there has also been an explosion in subscription boxes for companies selling physical products like wine, toiletries, cheese, meat, books and magazines.
Just 722,000 visits were made to subscription box sites each month in 2013. By 2016 this had risen to 21.4 million monthly visits.
Examples include Birchbox (beauty and grooming), Dollar Shave Club (razor blades), Loot Crate (gaming, anime and pet products), Blue Apron (recipe boxes, and Graze (healthy snacking).
But while I realise that all the examples above require either a lot of technology or are physical products, there is a way of tapping into this repeat business revolution on a small scale that doesn’t require tech, resources or massive start-up capital.
One of the best kinds of subscription businesses is to sell information.
That could include access to a private website, a community forum, email alerts, PDFs and electronic reports, software, videos, webinars and audio.
Really it means anything that helps your customers solve problems, achieve goals, or live an easier life.
• Frank Kern’s Inner Circle (internet marketing) generates $500,000 each month in renewal revenue.
• Lynda.com (helping people learn software, technology and business skills) charges users up to $375 a month and achieved a revenue of $150m before it was snapped up by LinkedIn!
• My publisher Canonbury’s What Really Wins Money (betting advice) makes £1,356,681 in net revenue and their eBay Confidential subscription service has made £1,283,588.
In fact, outside the giant media corporation’s services and niche subscription boxes, the biggest subscription boom has been in ‘e-learning’, which is really just a form of information publishing.
Common subjects include technology, business-to-business, management training, specialised skills, writing, marketing, fitness training, nutrition…
What I love about this is that it will work for ANY niche – as long as it’s something that you are passionate about, and has a small but dedicated following of people who share that passion and want to know more.
It doesn’t matter whether you’re into training spaniels, building drones, creating Japanese Zen gardens or writing vampire fiction… there is the potential to create a profitable membership service.
And now really is the time…
The doors to this opportunity are open wide
If you’ve tried to start a membership site or subscription business 10 years ago you’d have encountered difficulties…
… Less public appetite for subscriptions…
… Tricky online technology to set up…
… Fewer online networks to find subscribers…
… Difficulty researching and finding content…
… Expensive equipment and software required…
You’d have needed a lot more time, energy and investment capital to get started.
But this has all changed…
I’ll explain more in my next article, so hold tight. I’ve even got something to give you for free that will help you get on the first rung.
So, until next week…
The post This trend is revolutionising our spending habits… here’s how you can profit appeared first on Digital Upstart.