How to Begin with an Online Subscription Business in 2022 |
Leigh Metcalf, the founder of the Atlanta-based sewing company, Topstitch, was looking for a way to build the community of stitchers. As the flu pandemic swept through the country her, the necessity to find a different way to conduct business even more pressing.
The answer?
An online community. She started an online sewing group for garment sewers using , and today, her online subscription company is growing exponentially - to the point that it's her sole current focus!
There's an abundance of people discussing various methods to create businesses online. Many talk about creating an online class 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 the online subscription, with a touch of community mixed in! In this post we'll discuss what you need to be aware of if you're thinking about how to begin an online business for subscriptions.
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In this piece...
1. What is an online subscription business?
2. Why start an online subscription business?
2.2. Scale
2.3. Long-term customer relationships
2.4. The network effect
2.5. Predictable growth
3. How to start an online subscription company in 5 steps
3.1. Refine your niche
3.2. Choose your monetization model & platform
3.3. Find your clients
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 for members to have to pay for access to on a regular basis. The majority of subscription companies online provide access to an online product or service, for example, an online class or software OR to a digital community.
The online subscription business is an aspect of the overall subscription economy, which is growing. If you've ever signed-up for the monthly shave clubs, vegetable delivery, or wine subscription, you've probably used a subscription service.
A few companies are merging subscriptions on the internet with physical products, like ArtSnacks Mix which provides regular art materials via mail , and also allows membership in an online community offering workshops, art lessons as well as other services.
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Why start an online subscription business?
Recurring revenue
Undoubtedly, the biggest draw to an online subscription service for both solopreneurs and multimillion-dollar firms alike is the potential for recurring revenue.
You might remember a time that you could purchase programs like Microsoft Office in a box at the computer store with access for the life of your personal computer. Today, Microsoft, like many other businesses, is shifting 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 revenue.
On a lesser scale, many solopreneurs are also profiting by launching an online subscription company. There are many examples of these within our Stories of Awesome.
Scale
The second huge advantage to the online subscription model is the fact that it gives you tremendous scale as a business owner. It is possible to create something one time and have it reach hundreds or thousands of individuals. In the case of, say, if you are creating content in an online forum, it will not matter much to you whether there are five people consuming the content or hundreds.
It is still possible to create the content once.
Similar to the online courses. You don't need to keep making a new course repeatedly. Offering a course through an online subscription model simply involves incorporating recurring payment for access.
Long-term customer relationships
Another huge benefit to an online subscription business is the fact that it places your company in the position of being able to build long-term relationships with customers or members.
Contrary to traditional transactional company online business implies that you're creating a lasting connection. This might be through membership of an online community, or by sending out a regular newsletter, or using social media.
The importance of a long-term client or member relationship for a business is incalculable. It provides you with a loyal crowd to experiment with new products with, gather feedback from, and then upsell to.
The network effect
The benefit we can see in online communities is what we refer to as the network effect. It is essentially, the network effect is the value you provide to a community member is not a one-way exchange.
Actually, when you establish a community-based subscription company, the members provide value to each other as well. They'll talk to one other, help each other in need, and develop lasting friendships. All this adds to the worth of your community, even without doing any extra effort.
Predictable growth
The last but certainly not last, starting an online subscription company can give you clear and predictable increase. In essence, as long as your membership churn isn't too high, you can be pretty certain that any increase you make next month will build upon the foundation of what you have done this month. This means that you could even predict where your subscription business will be in a year's time.
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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 would like to apply your creative power first step towards developing an online subscription service that is actually successful is to identify your market.
When it comes to building online communities, we teach a process that we call Community Design(tm) to help to build this. One of the initial steps in the process of Community Design(tm) involves trying to identify members who are ideal for your community. Someone who has problems that you can help with.
Usually, we recommend talking to potential ideal members to your subscription company for instance, which in our case is an online group. Use these interviews to help discover the issues that members have, and clear areas where they would be willing to pay to get some assistance.
When you've finished the interviews, you are able to create what is known as A Big Purpose Statement. This is what it looks like:
Choose your monetization model & platform
Next step, when you've identified your ideal member is and the issue they have, is to choose an approach to business that will actually help them. In part, the choice of the business model you select is going to rely a bit on the problem you're trying to solve. If you have teaching that you need to do, you need to include an online platform for courses. If you've got an application that solves their challenge, you are likely to be creating something completely unique.
Since we think a lot about online communities, the website that we built at has been designed around community subscriptions, but it gives you various ways to make money. You can add online courses, paid subgroups as well as events and much more. You can also combine all the above.
Pick a monetization model that will assist you in serving the ideal customer when you start your own business.
And, as you begin, don't forget the KISS principle - that isto keep it simple... You know.
Find your clients
The next thing to do is to determine how you are going to attract new customers. There are a bunch of methods to accomplish this, and we'll not speak about a single-size solution. The trick is to find out which one is best to best serve your group of members.
But at the very most, you could go back to the people who you spoke to and inform them that you are developing an online subscription company.
Then, use the tools that you have in your arsenal to search for other customers. This could include things like:
- Social media
- Email lists
- Custom-designed invitations
- Webinars
- Ads
- Free trials
Deliver value
Getting people in is one half of the challenge. Insuring they stay is the other half. So, once you've got some customers paying to your subscription service online, you have to start providing worth.
The good news is, if you did the effort to determine your ideal client it's easy to give that person what they want. This is the reason what this Community Design(tm) procedure can make your business more effective, since you're not trying to provide worth to various kinds of customers with different desires.
Beware about the value of quantity. A lot of people launch an online subscription service believing that their customers will be satisfied if they have an avalanche of content. Creators get burnt out trying to provide it.
Instead, you should focus on the process your customers are trying to go through and give them only what they need to make that happen.
Assess and adapt
Also, ensure that you regularly review the things that are working, and then adjust. It is in your best interests to be lean as your subscription company, so take the initiative to make those changes to help you serve your audience better.
Conclusion
After we've gone through how to start an online business that offers subscriptions The only remaining thing is to get started! And believe it or not this is the most difficult portion. Many people dream of trying and fail, only to suffer from anxiety and analysis, causing them to think so much to the point that they fail to take that first step.
Be a better person than that. Just get started! Even if you don't have all the answers, you'll learn as you go. This is the great thing about this trip.
Ready to launch your subscription business?