What is the best way to start an Online Subscription Business in 2022 |
Leigh Metcalf, the founder of the Atlanta-based sewing company, Topstitch, was looking for a way to build a community of fellow stitchers. As the flu pandemic swept through the country and the demand to find a different way of doing her business became ever more urgent.
What is her answer?
An online community. She built an online stitching group specifically for sewers of garments technology, and her subscription service online is booming - so much to the point that it's her sole focus now!
There are a lot of people discussing various strategies to establish businesses on the internet. Many talk about creating an online class on Skillshare and dropshipping on Amazon as well as flipping items.
Although each may be useful in the business world, the one which is gaining the most attention is online subscriptions, that has a hint of community thrown in! In this article, we'll tell you the things you should know if you're wondering how to start an online business for subscriptions.
If you're looking for more help to build your community online Join OUR Mighty Community for free as well as meet fellow new and established community owners! We'd love to have you join us. Join to join for no cost!
In this post...
1. What is an online business that offers subscriptions?
2. Why start an online subscription company?
2.1. Revenue recurring
2.2. Scale
2.3. Relationships with customers over the long-term
2.4. The network effect
2.5. Predictable growth
3. How to start an online subscription business in just 5 easy steps
3.1. Refine your niche
3.2. Choose your monetization model & platform
3.3. Find your customers
3.4. Deliver value
3.5. Assess and adapt
What exactly is an online business that is a subscription service?
A subscription-based online business is an online product, service, or space where members pay for regular access to. Online subscription businesses usually either offer access to a digital product or service such as an online course or software, OR to a community of digital users.
The online subscription business is an aspect of the overall subscription economy, which is growing. If you've ever signed-up for a monthly shave club, vegetable delivery, or wine box, you've used a subscription business.
Some businesses are even making a connection between online and physical products, like ArtSnacks Mix , which provides regular art materials via post, but it also provides access to an online community, which offers art classes, inspiration and more.
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How do I you should start an online business for subscriptions?
Recurring revenue
Undoubtedly one of the main benefits to an online business of subscriptions for both solopreneurs and multimillion-dollar firms alike is the potential for regular revenue.
Perhaps you remember the days that you could purchase software such as Microsoft Office in a box at the local computer shop, and have access to that all the time you owned your laptop. Nowadays, Microsoft, like many other companies, has moved to a subscription model. This means you'll pay less at the beginning however they will earn more from a customer over their lifetime - all thanks to recurring revenues.
And at a smaller scale there are many solopreneurs benefiting by launching an online subscription company. We have examples of these within the Stories of Awesome.
Scale
Another benefit to an online subscription company is that it offers you enormous scale as the business's owner. It is possible to create something one time and it can reach thousands or hundreds of thousands of individuals. For example, if you're creating content on an online community, it doesn't make much of a difference to you if five people who consume it or hundreds.
It is still possible to create the content once.
Similar to the online courses. There is no need for making a new course again. Selling a course on an online subscription model involves incorporating recurring payment to access.
Relationships with customers over the long-term
A further benefit of subscriptions online is that it puts the business in a position to have long-term relationships with customers or members.
In contrast to a transactional, traditional business online business is one that creates a lasting connection. It could be by joining of the online community, 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 the business can't be overestimated. This gives you an enthusiastic group of people to try new products on, get feedback from and even upsell to.
The network effect
The value that we see in communities online is what we refer to as the effect of networks. The network effect is the value you provide to the community member not one-directional.
Actually, when you establish a community-based subscription business, members deliver benefits to one another also. They'll communicate with each other, help each other out, and build lasting friendships. This all adds to the value of your community, even with no extra work.
Predictable growth
Not the last, and certainly not the least, starting your own online subscription service can give you clear and predictable expansion. If the churn of your members isn't overly large, you'll be pretty certain that any increase you make in the next month will rest off of the work you have done this month. As a result, you can even project where the subscription service will be one year from now.
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How do you start an online subscription business in just 5 easy steps
Refine your niche
If you have an idea of the areas you would like to apply your imagination, the first step in creating an online subscription company which actually succeeds is to define your target market.
If you are looking to build communities on the internet, we provide the process we refer to as the process of Community Design(tm) to help in this process. One of the initial steps in the process of Community Design(tm) is to determine the ideal person to join your community. Someone who has problems which you could help.
In general, we suggest talking to potential ideal members to your subscription company which is in this case, an online community. Utilize these conversations to determine the problems for members, and identify areas in which they'd prefer to have some help.
Once you have done these interviews, you can make what we refer to as A Big Purpose Statement. This is what it looks like:
Choose your monetization model & platform
Next step, when you know who your ideal member is and the problem that they have then you need to pick an approach to business that will actually help them. Partly, the business model that you choose is going to rely somewhat on the issues you're trying to solve. If there is teaching needs to be done in the future, then you must incorporate the course platform. If you have a software solution to your problem, you're likely to be creating something completely different.
Because we are passionate about online communities, the website that we created is focused on subscriptions to community groups, but it gives you various ways to make money. It allows you to add paid subgroups, online classes, events, and more. You can also bundle all of the above.
Select the model for monetization that can assist you in serving the ideal customer as you develop your company.
When you are beginning do not forget the KISS concept - which means, be simple... That's right.
Find your customers
The next step will be to determine what you can do to attract new customers. There are many options to achieve this, and we'll not speak about a single-size solution. You need to figure out the best approach for your ideal group of members.
At the most, you could return to those who you spoke to and inform them that you're building an online subscription business.
Then, use your tools in your arsenal to search for others customers. This could include things like:
- Social media
- Email list
- Custom invitations
- Webinars
- Ads
- Trials for free
Deliver value
Inviting people to join is only one half of the challenge. Insuring they stay is the second half. That's why, once you've got some paying customers to your subscription service online it is essential to begin offering worth.
The good news is, if you did the work to identify the ideal customer You can simply give that person the things they require. This is what the Community Design(tm) process makes your business more efficient, since you're not trying to deliver the same value to diverse people who all want different things.
Do not think of volume as value. Many people begin an online subscription company believing that their customers will be satisfied if they have an avalanche of content. Creators become exhausted in trying to deliver it.
Instead, focus on the process your customers are trying to go through and offer them the only resources they need to make that take place.
Assess and adapt
Make sure to regularly review what is working and adapt. It's best to remain lean as a subscription business, and do not be afraid to implement the changes that will help you serve your audience more effectively.
Conclusion
Now that we've gone through how to start an online business that offers subscriptions all that's left is getting started! It's true this is the most difficult portion. There are many who dream of it and fail, only to suffer from analysis paralysis, overthinking to the point that they fail to take that first step.
Do not be the person you are. Just get started! If you don't have it perfectly figured out, you'll learn as you go. This is the great thing about this adventure.
Ready to launch your subscription business?