What is the best way to start with an Online Subscription Business in 2022 |
Leigh Metcalf, the founder of an Atlanta-based sewing studio, Topstitch, was looking for ways to create a community of fellow stitchers. After the outbreak and the demand to come up with a new method of doing her business became ever more urgent.
Her answer?
An online community. She built an online stitching group for seamstresses who sew using technology, and her subscription service online is growing exponentially - to the point that it's her sole current focus!
There's a lot of individuals discussing different ways to build companies online. Many talk about creating an online course up on Skillshare and dropshipping on Amazon as well as flipping items.
While each of them may serve a purpose however, the model of online commerce which is dominating the market is an online subscription with a touch of community mixed in! In this post we'll explain what you need to be aware of if you're thinking about how to begin an online subscription business.
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The post...
1. What is an online subscription service?
2. Why start an online subscription business?
2.1. Revenue recurring
2.2. Scale
2.3. Customer relationships that last for a long time
2.4. The network effect
2.5. Predictable growth
3. How to start an online business of subscriptions in just 5 easy steps
3.1. Refine your niche
3.2. Choose your monetization model & platform
3.3. Find your clients
3.4. Deliver value
3.5. Examine and modify
What exactly is an online subscription business?
An online subscription company is an online service that provides a service or space that members pay for regular access to. Businesses that offer subscriptions online typically offer access to a digital product or service, for example, an online class or software, OR to a community of digital users.
The subscriptions on the internet are part of the larger market for subscriptions, which is flourishing. If you've ever signed up for an annual shave-club as well as a vegetable delivery service, or wine subscription, you've used a subscription business.
Some businesses are even merging online subscription with physical goods, such as ArtSnacks Mix , which provides regular art materials via mail but also offers the option of joining an online community, which offers workshops, art lessons as well as other services.
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Why you should start an online business for subscriptions?
Reccurring income
Undoubtedly, the biggest draw to an online business of subscriptions for solopreneurs and multimillion dollar businesses alike is the possibility of regular revenue.
Perhaps you remember the days where you bought software like Microsoft Office in a box at the computer store and have access to that all the time you owned your laptop. Today, Microsoft, like many other corporations, has shifted to a subscription model. This means you'll pay less at the beginning, but they earn way greater from customers over their life time - due to the recurring income.
And at a smaller scale there are many solopreneurs benefiting through an online subscription service. You can read examples of these within the Stories of Awesome.
Scale
The second huge advantage to an online subscription business is the fact that it gives you huge scale for the business's owner. It is possible to create something one time and have it reach hundreds or thousands of users. For example, if you create content for an online community, it won't have much significance to you if five people who consume the content or hundreds.
It is still possible to create the content once.
It's the same thing with the online courses. There is no need for recreating a course again and repeatedly. Selling a course on the basis of an online subscription involves incorporating recurring payment to access.
Long-term customer relationships
Another huge benefit to subscriptions online is that it puts the business in a position to establish long-lasting relations with members or customers.
In contrast to a transactional, traditional business having an online subscription means that you are building the foundation for a long-lasting relationship. This might be through membership in an online community, or by sending out a regular newsletter, or even by contacting them via social media.
The importance of a long-term customer or member relationship to an organization is unimaginable. It gives you a willing group of people to try new products on, get feedback from and even upsell to.
The effect of the network
The benefit we can see in online communities is what we describe as the effect of networks. The network effect means that the value you deliver to your community members is not a one-way exchange.
In fact, when you create a community-based subscription business, members deliver worth to one another as well. They'll communicate with each and help one another in need, and develop lasting friendships. This all adds to the worth of your network, without you doing much additional effort.
Predictable growth
Not the last, and certainly not the last, starting an online subscription business is a great way to ensure certain and steady expansion. If your membership churn isn't too high, you can be pretty certain that any growth you accomplish in the next month will rest off of the work you've achieved this month. As a result, you can even project where the subscription service will be in a year's time.
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How to start an online subscription company in five easy steps
Refine your niche
If you have an overall idea of how you would like to apply your creativity, the first step in building an online subscription business that actually works is to clarify your niche.
If you are looking to build online communities, we teach a process that we call"Community Design(tm) to assist to build this. One of the initial steps in Community Design(tm) involves trying to identify members who are ideal for your group. Someone who has an issue that you can help with.
Usually, we recommend talking about potential members who would be ideal for your subscription business, in our case an online group. Use these interviews to help determine the problems that members have, and clear areas where they would be willing to pay to have some help.
After you've completed the interviews, you are able to create what is known as the Large Purpose Statement. It looks like this:
Choose your monetization model & platform
The next thing to do, after you've identified your ideal member is and what problem they have and the issue they face, is to select a business model that will effectively help them. Partly, the type of business you pick is going to rely a bit on the problem you're trying to solve. If you are in the business of teaching, which you need to do and you want to incorporate a course platform. If you are able to offer a software solution to their challenge, you are probably building something altogether unique.
Since we think a lot about online communities, the platform which we designed has been designed around community subscriptions and offers different ways to monetize. You can add online courses, paid subgroups or events. Plus, you can bundle all of the above.
Pick the model for monetization that will allow you to serve your ideal member while you build your business.
When you start, don't forget the KISS concept - which isto keep it simple... You know.
Find your clients
The next thing to do is to determine the best way to acquire customers. There are a bunch of methods to accomplish this, and we'll not discuss a universal approach. It is important to determine what will work to best serve your members.
But at the very minimum, you should contact the individuals whom you talked to and tell them that you're developing an online subscription company.
Use your tools at your disposal to find others clients. This could include things like:
- Social media
- Email list
- Custom invitations
- Webinars
- Ads
- Free trial
Deliver value
Inviting people to join is only half the battle. KEEPING them in is the second half. So, once you have some paying customers to your subscription service online You must begin delivering value.
It's a good thing when you've put in the work to identify your ideal client, you can just offer them what they need. That's that's why this Community Design(tm) method can make your business more effective because you're not trying to provide value to a bunch of various kinds of customers who all want different things.
Beware of volume as value. A lot of people launch an online subscription service thinking that clients will be happy if they have an avalanche of content. Creators get burnt out trying to provide it.
Instead, you should focus on the process your customers have to make and give them only what they'll need to make that take place.
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Finally, make sure you constantly take stock of your current strategies and make adjustments. It's best to remain lean as your subscription company, so do not be afraid to implement adjustments that help you serve your audience more effectively.
Conclusion
So now that we've walked through the steps to begin an online subscription company, the only thing left is to get started! Believe it or not it can be the hardest aspect. There are many who dream of it and fail, only to suffer from analytical paralysis and overthink until they never take the first step.
Do not be the person you are. Just get started! Even if you don't have all the answers, you'll be learning as you go. This is the great thing about this journey.
Are you ready to start your subscription business?