How to Start with an Online Subscription Business in 2022 |
Leigh Metcalf, the founder of the Atlanta-based sewing company, Topstitch, was looking for ways to create the community of stitchers. As the flu pandemic swept through the country, the need to come up with a new method of doing her business became even more pressing.
The Answer?
An online community. She created an online stitching group for seamstresses who sew using , and today, her subscription service online is growing exponentially - so that it's her only attention right now!
There's an abundance of individuals discussing different strategies to establish businesses on the internet. Many talk about creating online courses on Skillshare, dropshipping with Amazon, or flipping merchandise.
While each of them may be useful in the business world, the one which is dominating the market is an online subscription that has a hint of community mixed in! In this post we'll discuss the things you should be aware of if you're thinking about how you can start your own online subscription company.
If you're in need of more assistance for building your community, come join OUR Mighty Community for free and meet other new and established community owners! We'd love to have you join us. Register to join for no cost!
In this piece...
1. What is an online subscription business?
2. Why start an online subscription company?
2.1. Recurring revenue
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. Examine and modify
What exactly is an online-based subscription company?
An online subscription company is an online product that provides a service or space for members to are charged for access to regularly. The majority of subscription companies online sell access to a digital item or service, for example, an online class or software, OR to a community of digital users.
The online subscription business is a subsection of the wider subscription economy, which is booming. If you've ever signed up to the monthly shave clubs, vegetable delivery, or wine box, you've used a subscription business.
Some businesses are even making a connection between online and physical goods, such as ArtSnacks Mix , which sends regular art supplies via mail but also offers the option of joining an online community offering workshops, art lessons as well as other services.
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Why start an online subscription business?
Recurring revenue
Without a doubt the most significant benefit of an online subscription service for solopreneurs and multimillion dollar businesses alike is the possibility of increasing revenue that comes from recurring subscriptions.
There was a time where you bought software like Microsoft Office in a box from the computer store, and then have access to it for the life of your laptop. Nowadays, Microsoft, like many other businesses, is shifting to a subscription model. It means that you pay less up front and they make more from a customer over their life time - due to the recurring revenue.
And at a smaller scale, many solopreneurs are also profiting from an online subscription business. There are many examples of these on our Stories of Awesome.
Scale
The second huge advantage to an online subscription business is the fact that it gives you enormous scale as an owner of a business. You can create something once and it can reach thousands or hundreds of thousands of people. In the case of, say, if you are creating content in an online community, it doesn't have much significance for you if there are five people consuming it , or hundreds.
It is still possible to create the content once.
Similar to an online course. You don't need to keep recreating a course again and again. The selling of a course using the basis of an online subscription requires a recurring fee to access.
Customer relationships that last for a long time
Another major benefit of subscriptions online is that it puts your company in the position of being able to build long-term relationship with your members and customers.
In contrast to a transactional, traditional company, an online subscription business implies that you're creating the foundation for a long-lasting relationship. It could be by joining in the online community, by sending out a regular newsletter, or using social media.
The benefit of having a long-lasting relationships with a member or customer to an organization is unimaginable. It provides you with a loyal crowd to experiment with the latest products, receive feedback from and even upsell to.
The network effect
The benefit we can see in online communities is what we call the network effect. The network effect implies that the value you provide to your community members is not a one-way exchange.
In fact, when you launch a subscription-based community business, members deliver benefits to one another well. They'll communicate with each others, assist each other out, and build real friendships. The whole thing adds up to the worth of your network, without you doing much more work.
Predictable growth
Not the last, and certainly not the least, starting your own online subscription service is a great way to ensure clear and predictable increase. In essence, as long as your membership churn isn't too significant, you're pretty certain that any growth you accomplish in the next month will rest on the shoulders of what you've achieved this month. This means that you can even project where your subscription business will be one 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 overall idea of how you'd like to use your creativity, the first step in creating an online subscription company that actually works is to clarify your niche.
If you are looking to build communities online, we offer an approach we call"Community Design(tm) to aid in this process. And the first step in the process of Community Design(tm) involves trying to determine an ideal member for your group. It is a person who has an issue that you can help with.
We generally suggest speaking to potential ideal members of your subscription service for instance, which in our case is an online community. These interviews can help determine the problems which members face, as well as 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. The format is as follows:
Choose your monetization model & platform
The next thing to do, after you know who the ideal customer is and the issue they are facing, is to choose a business model that will effectively help the person. The choice of the business model you select is going to rely somewhat on the issues that they have. If you have teaching that needs to be done and you want to incorporate a course platform. If you are able to offer an application that solves their challenge, you are probably building something altogether different.
We think extensively about online communities, the website that we created is centered on community subscriptions and offers many ways to earn money. It allows you to add paid subgroups, online classes or events. You can also bundle all of the above.
Select a model of monetization that can assist you in serving your ideal member when you start your own business.
When you begin, don't forget the KISS concept - which is, keep it simple... You know.
Find your clients
Next step is to figure out the best way get customers. There are many methods to accomplish this, and we'll not talk about a one-size-fits-all approach. It is important to determine what will work to best serve your group of members.
However, at most, you could return to those who you spoke to and let them know that you are building an online subscription business.
Then, use the tools you've got in your arsenal to search for other clients. These could include:
- Social media
- Email lists
- Custom invitations
- Webinars
- Ads
- Free trials
Deliver value
Getting people in is half the battle. Insuring they stay is the second half. This is why, when you have some paying customers for your online subscription business it is essential to begin providing value.
There's good news, if you did the research to find the ideal customer You can simply offer them the things they require. This is that's why the Community Design(tm) process helps your company become more efficient, since you're not trying to provide value to a bunch of diverse people with different desires.
Do not think of volume as value. Too many people start an online subscription company and think that customers will be satisfied when they offer an abundance of content. Creators become exhausted in trying to provide it.
Instead, concentrate on the process your customers want to undergo and give them only what they need to make that take place.
Evaluate and adjust
Make sure to regularly review the things that are working, and then adjust. It's in your best interest to be lean as a subscription business, and do not be afraid to implement those changes to help you serve your audience better.
Conclusion
Now that we've gone through how to start an online subscription company all that's left is to get started! It's true it can be the most difficult portion. A lot of people have dreams of doing, but suffer anxiety and analysis, causing them to think so much until they never take the initial step.
Don't be that person. Just get started! If you don't have all the answers, you'll learn as you go. It's part of the charm of the adventure.
Are you ready to start your own subscription-based business?