The 9 Subscription Models
These 9 subscription (recurring revenue) models come from The Automatic Customer by best-selling author John Warrillow. The best fit for you business depends on several factors such as: product or service, availability of valuable content, degree it runs out regularly, limited supply, speed of required problem resolution, local or national competition, degree of regular maintenance, network effects, and purchase repeatability.
The Network Model
The value of the subscription goes up as more people subscribe. Examples: Phone, Social media accounts.
The Surprise Box Model
This subscription model involves shipping a curated package of goodies to your subscribers each month. Examples: Ma’o Farms, Stitch Fix
The All-You-Can-Eat Library Model
This subscription model involves offering a buffet of content to subscribers. Movie-sharing services like Netflix and Amazon Instant Video along with music-sharing services like Spotify are large, famous examples of this model.
The Private Club Model
This subscription model involves offering access to something of limited supply on a membership or subscription basis. This model is usually associated with private sports clubs. e.g. golf, tennis, but can also be applied for business-to-business companies.
The Front-of-the-Line Model
This subscription model involves selling priority access to a group of your customers. For example, at Salesforce.com all customers get basic level support where someone will provide you with a response over email within two business days. However, if you want a faster response, you can subscribe to a monthly service plan. The “premiere” package offers a one-hour turnaround time on what Salesforce.com deems “mission critical” problems. If a few minutes of downtime equates to lost revenue for your business, you can buy the “mission critical success” package, which gives you a response within 15 minutes.
The Membership Website Model
This subscription model involves publishing your know-how behind a pay wall where subscribers get access to unique content including articles, videos, webinars and forum discussions. Example: StarAdvertiser.com
The Simplifier Model
This subscription model involves taking a service you provide and establishing a contract with your customers to provide your service on an ongoing basis. If the customers know they are going to need your service regularly, offering to establish a service contract simplifies their life by eliminating the need to remember to call you to perform the service. Example: Sandwich Isles Pest Solutions.
The Consumables Model
This subscription model involves offering a subscription to a product that the customer needs to replenish on a regular basis. The value proposition is simple: life is too short to worry about mundane tasks like remembering to pick up diapers or razor blades; subscribe and you’ll never run out. The model works best when there is no inherent enjoyment in shopping for what you sell. Consumables subscription models have been set up for products as varied as razor blades, diapers, dog food and toner cartridges.
The Peace of Mind Model
This subscription model involves selling an insurance premium to something your customer hopes they will never have to call upon. Example: Apple Care.