Whenever I speak, audience members invariably ask the most questions about how to build recurring revenue.
Here are the best things you can do if you want to build the kind of loyalty and engagement that results in predictable revenue streams.
Let me know if you have questions!
1. Start with a philosophy of membership (subscription is a tactic, not a philosophy)
Every employee in the company must value access over ownership, relationships over transactions and transparency over slickness. This starts with the CEO. It means that if the product no longer meets customer needs, you are willing to dump it and build something better. It means that you get to know your members and learn from their ongoing behavior.
2. Make sure you have mission/market alignment
Do you know what your mission is? Do you understand how that mission benefits your target audience? Are you confident that if you engaged a new client today, they'd stay with you longer than tomorrow? If not, you don't have that alignment that is the foundation of everything else.
3. Optimize for a forever transaction
You are thinking about the long term. What is the need your customers have that will not go away? How can you solve their ongoing problem? Selling a book doesn't solve the bigger problem of "having relevant content to continue learning/being entertained" but a subscription to KindleUnlimited might.
4. Develop no more than 3 tiers of subscription, and pricing that is justified by the value offered (not just pegged to competition)
Don't make it hard for your buyers to buy! You might think your customers want unlimited choice so they can customize, but really they want you to curate the combination of services that will best serve their needs.
5. Consider whether or not “free” fits in your model
There are only 3 reasons for free or freemium: either your offering is so unique that it requires a taste to understand or believe the value promise ( New York Times Online), OR your nonpaying members recruit in paying members (SurveyMonkey), OR the value of your offering increases with the addition of each new member–a Network effect (LinkedIn). Otherwise, there is no reason for free.
6. Find your superusers and build a superusers factory
Superusers are people who go beyond just being great customers, and actually invest their own time and resources in increasing the value of your offering for others. These are your advocates, the mentors, and the focus group feedback providers. Engage them immediately and reward them with recognition and appreciation.
7. Make retention the sexiest metric in your company
Everyone says retention is the most important thing, but most organizations still promote and celebrate new logos more than loyalty.
8. Design an on-boarding experience that makes your product a habit
The transaction is the starting line, not the finish line. How do you make sure that your new subscribers engage? Too many organizations mistake inertia for loyalty and are surprised when the renewal doesn't happen.
9. Reward community engagement by giving them status within your community, not with prizes
Just as with children–you don't want to bribe good behavior–you want to augment and highlight the natural benefits. People who help others should be recognized for their help.
10.Prioritize continuous improvement to your offering over massive product revisions—this is no place for jazz hands and the big “ta da”
If you have an ongoing relationship with your customers, a big part of what they value is the smooth experience. Major change can be jarring, even if it's good. And if you miss the mark, your customers might not forgive you!
