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Subscriptions are the newest trends of the financial and payment processing industry. Increasing in revenue by more than 4x since 2015, from $5 billion to $20 billion, there is a huge market for this style of business. Customers love it because it allows them to gain access to specialized content, try new things, or conveniently stock up on things they need. Businesses love it because it adds value, creates a large subscriber base, and automatically processes consumer payments. So, how can you integrate the subscription model into your existing business? Outlined below are ideas to help you grow in this promising industry with the current products or services that you offer.
Do You Sell Consumable Items?
There are so many ways for you to add a subscription service into your existing business. The basic options for increasing and generating automatic sales in this space is doing one of two options: Restocking or curating boxes with your items.
Consumers often buy the same products once they find out that they like them. Basically, if it isn’t broken, why fix it? If you are selling items that people often buy in bulk or you have a healthy repurchase rate, you may be a good candidate for the restock or replenish model. Food, beauty items, pet toys, etc. would all be great opportunities for restocking because they are items people use everyday and have no intention of stopping.
If you offer a range of products, this may be the direction that you want to take. This allows customers a way to pick and choose their preferences and receive a box that ships directly to their door each month. Many times the boxes include core products that consumers are sure to love in addition to items they didn’t choose. The mystery of the unknown products it a huge incentive for some and, if done right, has great retention value. Common business types using this subscription style are lingerie, accessories, and electronics.
Before jumping all-in and converting your whole business to subscription, try offering it to your customers as an upgrade. Many times people enjoy the convenience of automatic subscription payment processing and easy ordering. But offering a choice for your customers adds huge value and shows that you are willing to cater to any customer type.
Do You Sell Non-Consumable Items?
In this section, you need to be a bit more creative when determining a way to monetize on a monthly basis. Because your customers don’t have a reason to return for your products on a frequent basis, you will need to sell added value. For example, if you sell coffee makers, you have a very brief connection with your customers as they’re buying the product and then they drop off until they need to buy another machine. But if you add value with subscription by restocking them on filters or curating coffee samples, you have a way to continue processing payments based off of a single purchase.
Because you may have to begin dealing in items that you haven’t had to up until now, this will take more time and planning to execute. But it could allow you to add additional cushion to your bottom-line and add value to your business.
Do You Sell Content?
The secret to monetizing content is to charge for your content. Nothing of value needs to be free, and if you prove that what you have is valuable, it will sell. This most often comes in the form of video or article content in which consumers pay to have access to. Used mainly for entertainment purposes, this model is just like Netflix or Hulu. One of the largest business types to utilize this structure is actually, the adult industry. But it is definitely not limited to just that industry, nearly any business type can profit from offering subscription content.
There is a balance that you have to hit here, though. If you haven’t proven that what you offer is valuable, consumers will not care to pay for it. You have to make them care. You can begin the conversion to subscription by limiting access. Offer basic content for free but have more in depth or valuable content locked only for subscribers. Then if you decide to continue the switch and have a large enough basis of people, you can convert all of your content for subscribers. At that point, you may want to consider forming pricing tiers. That way you can attract new customers with lower pricing as well as reward your existing customer base with increased content platforms.
Do you Sell Knowledge?
Are you an expert in your industry with the hope to share your knowledge? If so, you may be in luck. Because surprisingly, educational content is increasingly more valuable than content for entertainment purposes only. Or maybe that’s not so surprising. People love learning from industry experts in the hope that someday they can be an expert. These businesses profit from their curated content, whether that be articles or videos. A large share of business types utilize this structure such as financial professionals, yoga instructors, eLearning teachers, and so on.
To clarify what it means to have an informative edge, answer this?
- Are people paying to gain access to you?
- Do you intend to teach them about a topic?
- Are you offering guidance or support?
- Do you have a leadership role to do with this topic?
If you can answer yes to 3 or more of these questions, then you are a great candidate for the subscriber model.
Place all of the content which people find valuable behind a paywall. If you have credibility and are striving to provide subscribers with specific insights, there is no harm in trying. Begin by giving glimpses of your work and successes to anyone who may be searching for the solution you provide. Allow them to see what you can do and give them attainable expectations on what they can expect to gain from your service. Then just be sure to stay relevant and produce beneficial content frequently.
Secure a Merchant Account for Subscription
Now that you have brainstormed ideas to increase the value of your business through a subscription service, it is time to get set up with a credit card processing infrastructure to support it. Subscription businesses, while profitable, are considered high risk by banks. The reason behind this is due to the increased risk of chargebacks and fraud associated with these accounts. But this doesn’t mean that finding a continuity subscription merchant account is out of the question. This just means that you need to partner with a payments processor that has experience in the subscription industry. Here are a few questions that you can use to guide you as you search for your preferred payment processor:
1. Are they able to provide high risk merchant accounts?
The processor must have the right framework to work with high risk businesses. Things to look for are: flexible underwriting, chargeback safeguards, along with seamless integration to multiple platforms and gateways.
2. Do they have experience with subscription merchants?
A payments processor with no expertise in the subscription space will not be able to effectively handle the specific needs for recurring billing businesses. Make it easy on yourself and pick a processor that already has numerous subscription merchants and can handle the additional procedures.
3. What services do they offer?
Essential services include chargeback protection and prioritizing security. Additional services to help your business scale and grow may include a tailored gateway, seamless platform integrations, and an open API.
4. Are they well connected and invested in your success?
One of the most important aspects to finding a great payment processor if they are invested in their merchants. Be sure to select a processor that wants to work hard for you.