How to Start your own Online Subscription Business in 2022 |
Leigh Metcalf, the founder of the Atlanta-based sewing company, Topstitch, was looking for ways to create an online community of stitchers. When the pandemic hit and the demand to come up with a new method of doing her business became ever more urgent.
Her solution?
An online community. She created an online stitching group for garment sewers using the internet, and now, her subscription service online has been growing rapidly - so much to the point that it's her sole current focus!
There's a lot of individuals discussing different strategies to establish businesses on the internet. People talk about popping an online course up on Skillshare or dropshipping through Amazon as well as flipping items.
While each of them may have a place, the online business model which is dominating the market is online subscriptions, that has a hint of community thrown in! In this article we'll discuss the things you should learn if you're looking for ways to start an online subscription business.
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This post...
1. What is an online subscription service?
2. Why start an online subscription business?
2.1. Revenue recurring
2.2. Scale
2.3. Long-term customer relationships
2.4. The effect of the network
2.5. Predictable growth
3. How to start an online subscription company in just 5 easy steps
3.1. Refine your niche
3.2. Choose your monetization model & platform
3.4. Deliver value
3.5. Evaluate and adjust
What is an online-based subscription company?
An online subscription business is an online service, service, or space that members are charged for access to regularly. Businesses that offer subscriptions online typically provide access to an online product or service such as an online course or software OR to a community of digital users.
The online subscription business is part of the larger market for subscriptions, which is growing. If you've ever signed up for the monthly shave clubs and vegetable delivery or wine box, you've been a part of a subscription company.
A few companies are merging online subscription with physical items, such as ArtSnacks Mix that sends regular art supplies via mail , and also allows membership in an online community, which offers art classes, inspiration and more.
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What is the reason to start an online subscription business?
Reccurring income
Absolutely, the biggest draw to an online subscription service for solopreneurs and multimillion dollar companies alike is the increasing revenue that comes from recurring subscriptions.
You might remember a time that you could purchase 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 companies, has moved towards a subscription-based model. This means it costs less upfront and they make more from a customer over their entire life - thanks to the recurring income.
And at a smaller scale there are many solopreneurs thriving from an online subscription business. You can read some examples on the Stories of Awesome.
Scale
Another major benefit of the online subscription model is that it provides enormous scale as an owner of a business. The content you create can be shared once and it can reach thousands or hundreds of thousands of people. If, for instance, you are creating content in an online community, it won't matter much to you if five users who are using it , or hundreds.
The content is created the content one time.
Similar to any online class. You don't need to keep making a new course repeatedly. The selling of a course using an online subscription model involves incorporating recurring payment to access.
Long-term customer relationships
A further benefit of an online subscription business is that it puts the business in a position to have long-term relations with members or customers.
Contrary to traditional transactional business online business is one that creates the foundation for a long-lasting relationship. It could be by joining of an online community, or by sending out a regular newsletter, or even by contacting them via social media.
The value of a long-term customer or member relationship to an organization is unimaginable. It gives you a willing group of people to try new products with, gather feedback from, and upsell to.
The effect of the network
What we find valuable in community forums is what we like to refer to as the network effect. It is essentially, the network effect implies that your contribution to the community member not a one-way exchange.
In fact, when you launch a subscription-based community company, the members provide value to each other as well. They'll talk to one other, help each other out, and build genuine relationships. All this adds to the importance of your group, with no more work.
Predictable growth
The last but certainly not least, starting an online subscription company is a great way to ensure an easy and consistent increase. If your membership turnover isn't excessively large, you'll be pretty certain that any growth you accomplish the following month will be built upon the foundation of what you have done this month. As a result, you can even project where your subscription company will stand in a year's time.
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How do you start an online subscription company in five easy steps
Refine your niche
If you have 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 identify your market.
In the case of building online communities, we teach the process we refer to as the process of Community Design(tm) to aid in this process. And the first step in Community Design(tm) is to determine members who are ideal for your group. It is a person who has problems and you are able to help.
In general, we suggest talking with potential customers for your subscription business, in our case an online community. Utilize these conversations to discover the issues that members have, and clearly define areas where they'd want to have some help.
After you've completed the interviews, you are able to build what we call the Big Purpose Statement. The format is as follows:
Choose your monetization model & platform
The next step, once you have identified who your ideal member is and the issue they are facing, is to choose an approach to business that will actually help them. Partly, the type of business you pick will be based somewhat on the issues that they face. If you are in the business of teaching, which needs to be done in the future, then you must incorporate the course platform. If you have the software to solve your problem, you're most likely creating something entirely distinct.
We think extensively about online communities, the platform which we designed is centered on community subscriptions and offers different ways to monetize. You can add paid subgroups, online courses, events, and more. Additionally, you can bundle all of the above.
Choose the model of monetization which will allow you to serve the ideal customer as you develop your company.
As you begin, don't forget the KISS rule - that is, keep it simple... That's right.
Find your clients
The next step will be to figure out the best way get clients. There are lots of options to achieve this, and we'll not talk about a one-size-fits-all approach. You need to figure out the best approach with your desired members.
However, at minimum, you should go back to the people you interviewed and tell them that you are developing an online subscription company.
Utilize the tools that you have in your arsenal to search for others customers. These could include:
- Social media
- Email list
- Custom invitations
- Webinars
- Ads
- Trials for free
Deliver value
Getting people in is part of the struggle. KEEPING them in is the second half. So, once you have some paying customers of your subscription online business it is essential to begin providing the value.
There's good news that if you've done the research to find your ideal member You can simply provide them with the things they require. This is why the Community Design(tm) process can make your business more effective because you're not trying to provide value to a bunch of diverse people that all have different needs.
Resist the urge to think of volume as value. Too many people start an online subscription business believing that their customers will be happy when they offer an abundance of content. Creators are exhausted trying to make it available.
Instead, concentrate on the change your participants want to undergo and provide them with the information they need to make that take place.
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Also, ensure that you constantly take stock of the things that are working, and then adjust. It is in your best interests to remain lean as an entrepreneur in the subscription industry, and do not be afraid to implement adjustments that assist you in serving your customers better.
Conclusion
Now that we've gone through the steps to begin an online subscription company, the only thing left is to start! Believe it or not this is the hardest aspect. There are many who dream of it, but suffer analysis paralysis, overthinking enough that they never take the initial step.
Don't be that person. Just get started! Even if you don't think you have everything figured out it's going to be a learning experience as you progress. That's the beauty of this journey.
Are you ready to start your subscription company?