There aren’t many people out there who wouldn’t agree that subscription models are the ideal way to retain customers, build loyalty and yes, make money—and yes, even in our current economic climate.
In what has become a precarious time in consumer spending and retail shopping, the subscription model has actually seen significant increases since Coronavirus swept across the globe. In a study done by the company Zuora, data shows that recurring revenue built on customer loyalty will help existing subscription-based businesses weather the COVID-19 storm. In fact, their report found that 53.3% of customers have not seen a significant impact to their subscriber rates.
At Diffactory, we’ve seen firsthand the positive impact recurring revenue has on the companies we partner with. The subscription-based model is one you’re probably even a part of, through home or work.
Think about all of the companies and services we, as consumers, subscribe to. We sign up, opt in, and now they can count on your revenue month after month. We pay memberships at gyms and clubs. We subscribe to magazines and cable channels and streaming music companies. We frequent the local coffee shop. Get monthly haircuts. Have yearly fees auto-renewed. Sign contracts for cell phones. We even have dog food and razors and face cream on auto-delivery.
Your company deserves to be on that list. Don’t lose customers to price comparison shopping and fickle buying. Earn their sale—and their loyalty—by adding a member-based component to your business. One that will grow and maintain revenue, especially at a time when many businesses are wondering where their next sale is coming from.
Here’s why subscription models tend to be more resilient in economic situations like the one we’re in:
People have stopped shopping.
Brick-and-mortar stores. Product-focused businesses. If people stop shopping, they don’t make money. But with a membership model, your customers have already paid in. So you can focus less on moving products and more on how to offer value to your current consumer base.
Customer relationships are strengthened.
There’s never been a better time for subscription-based services to reach out to customers. Find out what they need … then work to meet those needs. Staying in touch with your membership base makes them more loyal to you. Now, and long into the future.
It’s time to get innovative.
Situations like the one we’re in force us to get creative. Innovate. Think outside our normal boxes. Maybe it’s a free trial. Or a new service. Or different renewal options. By zigging instead of zagging, you might not only retain current subscribers. You very well could gain new ones.
Let’s get your membership base started (or growing). There are a lot of reasons why it’s smart. And no reason not to try.