What are the three big myths of the subscription business that cause many unsuspecting businesses to fail?
For more than five years the subscription model has been widely hailed as a game changer for generating recurring profits in a business.
This interest in the subscription model has resulted in a flood of new offerings, many of which failed badly or became a big mess. As someone who fixes subscription business, that’s been great for me, because record numbers of business owners and their teams have been approaching me for help.
While the subscription business can be powerful, there is a side to the business model that often gets ignored.
This episode of Be Unleavable® Subscription Growth reveals the three big myths of the subscription businesses make and show you how to avoid the pitfalls.
🎤Where I’ve been:
Great event: Subscription Show produced by Subscription Insider.
Here are a few takeaways:
- Top consulting firm BCG surveyed top subscription businesses, they found that marketing budgets are getting cut as companies seek ways to trim expenses. According to their research, it demonstrates the market share lost by cutting $1.00 of marketing spend today costs upwards of $1.80 to regain in the future. This makes cutting your ad budget may be one of the most expensive cuts within your business.
2. There’s are many individuals promoting how to be member focused. One speaker said, “subscription is not about the product, it’s about creating and monetizing relationships.” When internalized, this core value has the most profound impact on your subscription business.
3. A great session by Dan Fink, Managing Director of financial publisher, Money-Media. To optimize annual subscription renewal rates, Dan segments subscribers into three categories according to a “Renewal Risk Index” based on how members engage with the content they receive as part of their subscription. With Low Risk he’s able to consider increasing pricing. With Medium Risk he focuses on engagement and recommending other content and with High Risk, his team engages these members to help them find more value. Most subscription leaders treat all members the same. Segmenting members helps you optimize the value you deliver and is the fastest way to increase recurring revenue.
4. Joe Brown, CEO of DearDoc shared several of his biggest onboarding breakthroughs from the last year. He’s implemented new subscriber welcome videos, email engagement sequence, specialized training to members of his team and even a snail mail new subscriber welcome kit.
5. Matt Wegner, Global Head of Payments & Risk of Adobe spoke on the Secret Behind Adobe’s Continued Recurring Success. One fascinating point on Adobe’s record of growth since becoming a leader in the movement towards offering SaaS subscription products. It wasn’t the switch to subscription that triggered growth. The explosive growth happened after implementing what Adobe called DDOM – Data Driven Operating Model. In my experience, next to the lesson revealed in #2 above, this is the second most powerful subscription growth secret.
This is so important I reviewed my data driven subscription business operating model within both the 3-hour onboarding workshop and the 45 minute session. It’s a game changer when running a subscription business based on the #1 KPI in a subscription business.
The Subscription Show delivers a comprehensive review of the subscription industry. There are great sessions and important vendors who can help you grow your subscription business. Keep a look out for the event next year!