The Best Way to Make a Solid Subscription Business…
Every business is trying to find the “magic bullet” that will make them successful. Even successful businesses are looking for the magic touch to increase business and, ultimately, the bottom line.
In “The Ultimate Business Mastery System” by Anthony Robbins and Chet Holmes, we learn there are only three ways to increase your bottom-line without raising your prices.
The 3 ways to grow your business without raising prices:
1. Increase the number of customers you have
Obviously if more people buy your product, more money will come in. A simple way to grow is to acquire more customers. If you can offer an amazing deal and work out your cost per acquisition (CPA) math in a favorable way, this is one of the most solid ways to grow your business. With subscription business, the CPA is much easier to work out since you can calculate the average lifetime value of a customer to figure out how much to spend acquiring new ones.
2. Increase the frequency at which your current customers purchase
There’s an old saying in business: “It’s easier and less expensive to keep an existing customer than to acquire a new customer.” This saying is extremely accurate in every scenario we’ve seen. This method is often cheaper than #1 and can be far more beneficial in the end. If you have 100 customers and you can find a way to get them to purchase 50% more often, its the same as adding another 50 people buying your product. Subscription business shines here as it takes existing clients and makes it convenient and easy for them to purchase more product, more often.
3. Increase the number of units sold
This is often the easiest to think about but the hardest to implement. When asked how to increase their revenue, most business owners answer “Sell More!” When followed up with the question, “How?” they often have no answer. Enter, subscription business. You see, because customers are purchasing on a regular basis from you, they learn to trust your business. If you do thing correctly, they’ll often take up sell recommendations. Imagine owning a coffee business and offering a limited dark roast from Ethiopia. Paint the picture with marketing and let your subscription business handle the rest. You’ll have clients purchase more units from you, more often!