Subscription websites have great potential to become a successful business venture. It’s all about building and nurturing a community with similar interests, focused on accomplishing the same goal, supporting each other, and benefiting from valuable content and digital products. You can make recurring revenue and turn your passion into a profitable online business by starting your own subscription website.
Have you ever wondered how to start a subscription business to create recurring revenue? No matter what type of content you want to host, there a probably a valid audience just waiting to be served.
Here’s a fun question for you: How many subscription services do you use a day? The chances are that the numbers are higher than you realize.
In this blog, we’ll share all the details you need to know about building a subscription business and running it successfully.
What is a subscription business?
A subscription business is a part of a broader cultural shift called the creator economy, where people are looking for “access” over “ownership”. You can think of your subscription business model as the one that brings in recurring revenue for offering exclusive content and content bundles to your members.
Before starting a subscription business, it’s important to address the requirements of your business and the considerations of your target audience.
- Who do you want to serve?
- How do you want to serve them?
Are you planning to serve businesses, individuals, or both? Is your target audience likely to respond to a traditional model that gives complete access for one price, or they would prefer custom offerings? Finding answers to these questions will help in creating a membership-based business.
Business models for your subscription business
Research shows that over 75% of companies selling to customers will offer subscription services by 2023. It is clear from this statistic that the subscription business model is here to stay for long.
When a business charges a recurring fee paid on a monthly or annual basis, it follows a subscription business model. But what makes the subscription model popular for businesses and customers alike? For customers, it is the personalization and the convenience they get, and for businesses, it’s the sustainability and predictability.
Let’s take a look into different types of subscription business models.
In this subscription model, you can integrate different subscription packages and allow members to select their level of involvement.
The following are the two main ways to build subscription tiers.
Value-based: Plan the levels of your subscription around different values where a high price equals more benefits for members. For example, the lowest level of your subscription tier might offer access to online forums and other basic perks. The next level can provide access to advanced programs and discounts.
Donation-based: If you are running a non-profit subscription website, create your subscription levels around different donation levels. Offer different perks and discounts based on each level.
Club subscription models are of two different types. The first are clubs that offer geography-bound communities that typically provide lessons, equipment, competition, and events to members of a community. Members of the club pay a subscription fee to access the facilities. The second type is interest clubs that are similar to photography clubs. These types of clubs offer networking opportunities and educational resources to members.
A value-based subscription business model allows creators to bundle services. Members can also select ala-carte services based on where they get the maximum value. This business model has a level of unpredictability when it comes to revenue earned due to different service levels.
This subscription club business model consists of single cost and all-access plans that offer the breadth of your services to any member who joins. The main advantage of this business model is that it creates predictable revenue streams for your business. However, they aren’t very appealing to members due to the lack of flexibility. The ability-to-pay model works great for businesses seeking more predictable revenue.
Finally, subscription businesses can combine value-based and ability-to-pay subscription business models. The former business model can be combined with a value-based component that brings flexibility to members and establishes a predictable revenue stream for your business.
This model offers members an option to upgrade from a base subscription level to a premium one that offers more perks to members for a higher price. Both basic and premium levels are priced based on the ability of the members to pay.
Now that you know about the different subscription-based business models, let’s discuss how to go about it.
To create a subscription business model, you must define your target audience and how you want to serve them. Without a detailed plan about exactly what you want to do, it isn’t easy to get a grasp on your business goals. It is crucial to the success and sustainability of your subscription business model.
By looking at the market on a deeper level, you will get a clear picture of how a subscription business model will work for your business.
Market desire is all about what your audience actually wants out of your subscription website. Are they looking for exclusive content? Does your audience want more discounts? Knowing all this will give you a clear idea of what your audience wants and why they would subscribe to your website.
Feasibility deals with whether it is possible to give your audience what they want with your offerings. Just because your audience desires something doesn’t mean it’s the right thing to do for your subscription business. You must always create short and long-term goals when looking at the feasibility of what your audience wants.
It is also important to calculate the level of risks when choosing a subscription business model. What happens if half of your members decide to unsubscribe from your subscription site? What happens if you lose your main source of funding?
These scenarios might seem extreme, but preparing for extremes is going to position you better to face the adversities. Assessing risks helps you to create a plan that can be beneficial when things don’t go as planned.
By analyzing your business goals, building an assessment of your requirements, and evaluating risk, you can set up your subscription business model for success and sustainability.
It takes careful analysis and planning to determine and implement the most successful subscription model for your business. The choice comes down to who your business services and what your brand’s unique business revenue goals are. When you choose the right business model and put in the work, your subscription website can generate recurring revenue and a supportive community of people who grow with your business.
If you need assistance in building a subscription platform with competitive features, get in touch with us. We are experts who works hard to turn your business idea to reality.