How to Get Started With a Subscription Business in 8 Steps
Source: How to Get Started With a Subscription Business in 8 Steps
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<a rel="nofollow" href="https://www.activecampaign.com/blog/get-started-subscription-business">How to Get Started With a Subscription Business in 8 Steps</a></p>
<p>The subscription <a href="https://www.activecampaign.com/blog/what-is-ecommerce" target="_blank" rel="noreferrer noopener">e-commerce</a> market has gone through tremendous growth for businesses of all sizes over the last decade. </p>
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<p class="has-ac-blue-200-background-color has-background"><strong>According to a 2018 McKinsey survey, 15% of online shoppers have embraced subscription-based businesses, opting for the convenience, personalization, and often cost-effective nature of receiving subscription products at regular intervals, frequently through monthly boxes. </strong></p>
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<p>As the subscription economy continues to flourish, now is an opportune time to explore how to capitalize on this burgeoning market by launching your subscription business to generate recurring revenue and drive customer lifetime value. However, like any venture, success requires careful planning and execution. In this article, we’ll walk you through the eight steps to get started with your subscription business model.</p>
<h2 class="wp-block-heading has-type-2-font-size">1. Identify your niche and audience</h2>
<p>The first step in launching a subscription business is identifying your niche and target audience. Consider what problem your subscription service will solve or what unique value proposition it offers. Conduct market research to understand your audience’s needs, preferences, and pain points. This insight will help you tailor your offering to meet specific demands effectively.</p>
<h2 class="wp-block-heading has-type-2-font-size">2. Choose the right subscription model</h2>
<p>There are various subscription models to choose from, including product-based, service-based, membership models, and subscription box businesses. Select the model that aligns best with your business idea and target audience. Determine your competitive pricing strategy, billing cycles, and subscription tiers based on your market research and financial projections.</p>
<h2 class="wp-block-heading has-type-2-font-size">3. Develop a compelling value proposition</h2>
<p>A compelling value proposition is essential for attracting and retaining subscribers in a competitive landscape. Clearly communicate the benefits of your subscription service, emphasizing how it solves your audience’s problems or improves their lives. Highlight unique features, exclusive content, or <a href="https://www.activecampaign.com/glossary/personalize" target="_blank" rel="noreferrer noopener">personalized</a> experiences that set your subscription offering apart from competitors.</p>
<h2 class="wp-block-heading has-type-2-font-size">4. Build a seamless payment process</h2>
<p>A seamless and frictionless payment process to handle subscription fees is crucial for the success of your subscription business. According to PYMNTS Intelligence, <a href="https://www.pymnts.com/subscriptions/2023/failed-payments-are-costing-companies-their-best-subscribers-and-9-of-revenue/#:~:text=As%20a%20result%2C%20subscription%20companies,the%20most%20profitable%20customer%20groups." target="_blank" rel="noreferrer noopener">27% of users</a> are likely to cancel their subscriptions if they experience any service interruption due to failed payments. As a result, subscription companies see an average decrease of 9% in revenue due to this factor. </p>
<p>Invest in a recurring payment system to make processing and managing accounts easier. Connect that to <a href="https://www.activecampaign.com/blog/best-email-automation-software" target="_blank" rel="noreferrer noopener">email automation software</a> to ensure customers receive timely notifications about upcoming payments, payment confirmations, and billing-related updates. By integrating your recurring payments system with your email automation software, you can proactively address payment issues, offer convenient payment options, and minimize involuntary churn.</p>
<h2 class="wp-block-heading has-type-2-font-size">5. Aim to deliver a great customer experience</h2>
<p>Central to the success of any subscription business model is the delivery of an exceptional customer experience. From the moment a potential subscriber lands on your website to their ongoing interaction with your brand, every touchpoint should be seamless and delightful. Invest in an email marketing automation software like ActiveCampaign that allows you to personalize communications and segment your audience effectively, ensuring timely and relevant interactions with your customer base throughout their subscription lifecycle.</p>
<h2 class="wp-block-heading has-type-2-font-size">6. Implement effective marketing strategies</h2>
<p>Develop a comprehensive marketing strategy to raise awareness and drive subscriptions for your business. To reach your target audience effectively, use a mix of digital marketing channels, including social media, email marketing, <a href="https://www.activecampaign.com/blog/content-marketing-quotes" target="_blank" rel="noreferrer noopener">content marketing</a>, and search engine optimization (SEO). </p>
<h2 class="wp-block-heading has-type-2-font-size">7. Monitor metrics and iterate</h2>
<p>Continuously monitor subscriber growth rate, churn rate, customer lifetime value (CLV), and customer satisfaction metrics. Use these insights to identify areas for improvement and iterate your strategies accordingly. </p>
<h2 class="wp-block-heading has-type-2-font-size">8. Focus on customer retention rates and long-term relationships</h2>
<p>While acquiring new subscribers is important, retaining existing customers is equally crucial for sustainable growth. Implement retention strategies such as a customer loyalty program, personalized recommendations, and exclusive discounts or coupons to foster long-term customer relationships. </p>
<p>Launching a successful subscription business requires dedication, strategic planning, and continuous innovation. By following these steps and staying focused on delivering value to your subscribers via customer experiences, you can set a strong foundation for your subscription business. </p>
<p><strong><a href="https://www.activecampaign.com/ecommerce/recurring-payments">Learn more about recurring payments here.</a></strong></p>
<p>This post <a rel="nofollow" href="https://www.activecampaign.com/blog/get-started-subscription-business">How to Get Started With a Subscription Business in 8 Steps</a> first appeared on <a rel="nofollow" href="https://www.activecampaign.com">ActiveCampaign</a> and is written by <a rel="nofollow" href="https://www.activecampaign.com/author/jcollier">Jeremy Collier</a></p>Source: How to Get Started With a Subscription Business in 8 Steps