How to Start with an Online Subscription Business in 2022 |
Leigh Metcalf, the founder of an Atlanta-based sewing studio, Topstitch, was looking for a method to establish a community of fellow stitchers. As the flu pandemic swept through the country, the need to find a different way to conduct business ever more urgent.
The answer?
An online community. She created an online stitching group for seamstresses who sew using technology, and her subscription service online is growing exponentially - so that it's her only focus now!
There's a lot of individuals discussing different methods to create businesses online. There are discussions about putting online courses on Skillshare or dropshipping through Amazon and flipping products.
And while these each might serve a purpose, the online business model which is gaining the most attention is an online subscription and a bit of community! In this post, we'll tell you the things you should learn if you're looking for ways you can start your own online subscription company.
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This post...
1. What is an online business that offers subscriptions?
2. Why start an online subscription business?
2.2. Scale
2.3. Customer relationships that last for a long time
2.4. The effect of the network
2.5. Predictable growth
3. How to start an online subscription business in 5 steps
3.1. Refine your niche
3.2. Choose your monetization model & platform
3.4. Deliver value
3.5. Examine and modify
What exactly is an online subscription business?
A subscription-based online business is an online service, service, or space for members to pay for regular access to. Businesses that offer subscriptions online typically sell access to a digital product or service like an online course or software, OR to a digital community.
The subscriptions on the internet are an aspect of the overall subscription economy, which is flourishing. If you've ever signed up to the monthly shave clubs and vegetable delivery or wine box, you've probably used a subscription service.
A few companies are merging online subscription with physical items, such as ArtSnacks Mix which delivers regular art supplies by mail but also offers access to an online community, which offers workshops, art lessons, etc.
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How do I start an online subscription business?
Recurring revenue
Undoubtedly, the biggest draw to an online subscription service for solopreneurs and multimillion dollar companies alike is the increasing revenue that comes from recurring subscriptions.
Perhaps you remember the days when you would buy software like Microsoft Office in a box at the computer store and then have access to it for the life of your computer. Today, Microsoft, like many other corporations, has shifted towards a subscription-based model. It means that you pay less up front however they will earn more from a customer over their lifetime - all thanks to recurring revenue.
On a lesser scale, many solopreneurs are also benefiting from an online subscription business. There are many the examples we have on the Stories of Awesome.
Scale
The second huge advantage to an online subscription company is the fact that it gives you tremendous scale as the business's owner. The content you create can be shared once and it can reach hundreds or thousands of people. In the case of, say, if you are creating content in an online community, it won't have much significance to you if five people consuming it , or hundreds.
The content is created the content once.
The same applies to any online class. You don't need to keep recreating a course again and repeatedly. The selling of a course using an online subscription model requires a recurring fee to access.
Long-term customer relationships
Another major benefit of an online subscription service is the fact that it places you in a position to have long-term relations with members or customers.
Unlike a traditional, transactional company having an online subscription is one that creates the foundation for a long-lasting relationship. This might be through membership to an online community, sending out a regular newsletter, or even by contacting them via social media.
The benefit of having a long-lasting client or member relationship for an organization is unimaginable. It gives you a willing audience to test new products on, get feedback from, and then upsell to.
The effect of the network
What we find valuable in community forums is what we refer to as the network effect. The network effect implies that the value you deliver to your community members is not one-directional.
Actually, when you establish a community-based subscription company, the members provide value to each other as well. They will talk to each and help one another in need, and develop real relationships. All this adds to the value of your group, without you doing much extra effort.
Predictable growth
Last, but definitely not least, starting your own online subscription service is a great way to ensure clear and predictable growth. If your membership turnover isn't excessively large, you'll be pretty certain that any increase you make the following month will be built on the shoulders of what you have done this month. This means that you can also predict what your subscription business will be a year from now.
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How to start an online subscription business in 5 steps
Refine your niche
If you've got an idea of the areas you'd like to use your imagination, the first step in creating an online subscription company that is actually successful is to define your target market.
If you are looking to build online communities, we teach an approach we call the process of Community Design(tm) to assist you do this. And the first step in Community Design(tm) involves trying to determine the ideal person to join your community. This is someone with an issue that you can help with.
In general, we suggest talking with potential customers of your subscription service, in our case an online community. Utilize these conversations to discover the issues for members, and clear areas where they would want to get some assistance.
After you've completed these interview, you will be able to create what is known as a Large Purpose Statement. It looks like this:
Choose your monetization model & platform
The next thing to do, after you know who the ideal customer is and the issue they face and the issue they face, is to select an approach to business that will effectively help the person. Partly, the business model that you choose is going to rely a bit on the problem that they face. If there is teaching needs to be done, you need to include a course platform. If you are able to offer an application that solves their challenge, you are probably building something altogether unique.
Because we are passionate about communities online, the system which we designed has been designed around community subscriptions however, it also offers different ways to monetize. It allows you to add online courses, paid subgroups as well as events and much more. Plus, you can bundle all of the above.
Pick a model for monetization which will allow you to serve the ideal customer as you develop your company.
As you are beginning make sure you remember the KISS principle - that is, keep it simple... You know.
Find your customers
The next step will be to determine how you are going get clients. There are a bunch of options to achieve this, therefore we will not discuss a universal approach. You need to figure out what will work to best serve your participants.
At the most, you could contact the individuals whom you talked to and tell them that you are creating an online subscription service.
Utilize the tools that you have available to locate other clients. These could include:
- Social media
- Email list
- Custom invitations
- Webinars
- Ads
- Free trial
Deliver value
Inviting people to join is only part of the struggle. KEEPING them in is the other half. That's why, once you have some paying customers of your subscription online business, you have to start delivering the value.
It's a good thing that if you've done the research to find your ideal client You can simply give that person what they need. That's why the Community Design(tm) procedure makes your business more efficient because you're not trying to offer value to a bunch of different kinds of people who all want different things.
Do not think about the value of quantity. Many people begin an online subscription service believing that their customers will be happy when they offer an abundance of content. Creators get burnt out trying to deliver it.
Instead, focus on the transformation your members are trying to go through and provide them with the information they require to help make it occur.
Evaluate and adjust
Make sure to always assess your current strategies and make adjustments. It is in your best interests to stay lean in an entrepreneur in the subscription industry, and take the initiative to make adjustments that help you serve your audience better.
Conclusion
Now that we've gone through the steps to begin an online subscription business The only remaining thing is to start! Believe it or not it can be the most difficult portion. Many people dream of trying however, they suffer from an analysis paralysis, overthinking to the point that they never take the first step.
Don't be that person. Just get started! If you don't have everything figured out you'll be learning as you go. This is the great thing about this trip.
Ready to launch your own subscription-based business?