How to Start an Online Subscription Business in 2022 |
Leigh Metcalf, the founder of the sewing studio in Atlanta, Topstitch, was looking for a method to establish a community of fellow stitchers. When the pandemic hit, the need for an alternative way of doing her business became ever more urgent.
The solution?
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 focus now!
There are a lot of people discussing various methods to create businesses online. There are discussions about putting an online class on Skillshare or dropshipping through Amazon and flipping products.
And while these each might be useful however, the model of online commerce which is gaining the most attention is an online subscription that has a hint of community! In this piece, we'll tell you the things you should learn if you're looking for ways to start your own online subscription company.
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This article...
1. What is an online subscription service?
2. Why start an online business for subscriptions?
2.1. Recurring revenue
2.2. Scale
2.3. Customer relationships that last for a long time
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
3.4. Deliver value
3.5. Assess and adapt
What is an online subscription business?
An online subscription business is an online service that provides a service or space that members have to pay for access to on a regular basis. Businesses that offer subscriptions online typically provide access to an online product or service for example, an online class or software, OR to a community of digital users.
The business of online subscriptions is part of the larger business of subscriptions that is booming. If you've ever signed-up for a monthly shave club, vegetable delivery, or wine subscription, you've used a subscription business.
A few companies are merging subscriptions on the internet with physical goods, such as ArtSnacks Mix , which sends regular art supplies via mail , and also allows access to an online community that provides artistic classes, ideas as well as other services.
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Why begin an online subscription company?
Recurring revenue
Absolutely one of the main benefits to an online business of subscriptions for solopreneurs as well as multimillion-dollar companies alike is the recurring revenue.
Perhaps you remember the days where you bought software such as Microsoft Office in a box at the local computer shop, and have access to that for the life of your personal computer. Now, Microsoft, like many other businesses, is shifting towards a subscription-based model. It means that it costs less upfront however they will earn greater from customers over their life time - due to their recurring revenues.
On a lesser scale some solopreneurs are benefiting by launching an online subscription company. We have 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 enormous scale as a business owner. It is possible to create something one time and have it reach thousands or even hundreds of thousands of users. If, for instance, you are creating content in an online community, it won't make much of a difference for you if there are five people who consume it , or hundreds.
The content is created the content once.
It's the same thing with any online class. You don't need to keep creating a course over and over repeatedly. Selling a course on an online subscription model involves incorporating recurring payment for access.
Relationships with customers over the long-term
Another major benefit of an online subscription business is that it puts the business in a position to build long-term relationship with your members and customers.
In contrast to a transactional, traditional company, an online subscription business means that you are building a lasting connection. For instance, this could happen through membership of an online community, or by sending periodic newsletters, or using social media.
The importance of a long-term customer or member relationship to a business is incalculable. It gives you a willing crowd to experiment with new products with, gather feedback from and even upsell to.
The network effect
The value that we see in community forums is what we like to refer to as the effect of networks. It is essentially, the network effect means that your contribution to the community member not one-directional.
Actually, when you create a community-based subscription business, members deliver benefits to one another well. They will talk to each other, help each other in need, and develop real relationships. The whole thing adds up to the value of your community, even without doing any additional tasks.
Predictable growth
Not the last, and certainly not the last, starting your own online subscription service will provide you with an easy and consistent growth. If your membership turnover isn't excessively high, you can be sure that any growth you accomplish in the next month will rest upon the foundation of what you've accomplished this month. In the end, you can even project where your subscription company will stand in a year's time.
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How to start an online business of subscriptions in five easy steps
Refine your niche
If you've got an idea of the areas you would like to apply your creativity, the first step in creating an online subscription company which actually succeeds is to clarify your niche.
In the case of building communities online, we offer an approach we call"Community Design(tm) to help in this process. The first step of the process of Community Design(tm) is to determine members who are ideal for your community. This is someone with an issue and you are able to help.
Usually, we recommend talking with potential customers to your subscription company for instance, which in our case is an online forum. These interviews can help discover the issues which members face, as well as clearly define areas where they'd want to have some help.
After you've completed these interviews, you can build what we call the Big Purpose Statement. The format is as follows:
Choose your monetization model & platform
The next step, once you've identified you want to be your ideal client and the issue they have then you need to pick an approach to business that will effectively help the person. The choice of the business model you select will depend a bit on the problem that they face. If you have teaching that is required in the future, then you must incorporate a course platform. If you've got an application that solves the problem, then you're most likely creating something entirely distinct.
Because we are passionate about online communities, the website that we built at is focused on subscriptions to community groups and offers various ways to make money. There is the option of adding paid subgroups, online classes as well as events and much more. Plus, you can combine all the above.
Select an monetization model that can help you serve your ideal client as you develop your company.
As you begin make sure you remember the KISS rule - that is, keep it simple... It's simple, right.
Find your customers
The next step will be to decide the best way to attract customers. There are many methods to accomplish this, therefore we will not speak about a single-size solution. You need to figure out which one is best with your desired group of members.
However, at minimum, you should return to those you interviewed and inform them that you are developing an online subscription company.
Utilize the tools that you have in your arsenal to search for others clients. These could include:
- Social media
- Email lists
- Custom invitations
- Webinars
- Ads
- Free trial
Deliver value
The process of bringing people into the room is just one half of the challenge. KEEPING them in is the other half. That's why, once you've got some paying customers of your subscription online business it is essential to begin offering the value.
The good news is when you've put in the research to find the ideal customer, you can just give that person what they need. This is that's why the Community Design(tm) process helps your company become more efficient, since you're not trying to offer the same value to diverse people that all have different needs.
Beware that volume is a good thing. Many people begin an online subscription service believing that their customers will be satisfied when they offer an abundance of content. Creators are exhausted trying to make it available.
Instead, you should focus on the process your customers want to undergo and provide them with the information they need to make that happen.
Assess and adapt
Also, ensure that you constantly take stock of your current strategies and make adjustments. It's in your best interest to remain lean as an entrepreneur in the subscription industry, and take the initiative to make those changes to assist you in serving your customers better.
Conclusion
After we've gone through the steps to begin an online subscription business all that's left is to get started! It's true it can be the hardest aspect. There are many who dream of it however, they suffer from an anxiety and analysis, causing them to think so much enough that they never take the first step.
Don't be that person. Just get started! If you don't have it perfectly figured out, you'll be learning as you go. This is the great thing about this adventure.
Do you have the right tools to launch your subscription business?