By: Elena Grace Flores
Innovabiz’s InnovaBuzz podcast of John Warrillow, who is the creator and president of The Value Builder System, author of Built to Sell and The Automatic Customer, talks to us about recurring revenue or subscription business models and how they can give certainty in both cash flow, inventory and staff management to any business. Listen to the podcast to get the details here: http://innovabiz.com.au/podcasts/episode-23-john-warrillow-of-the-value-builder-system/
The biggest benefit of running a subscription based business model is that it increases the value of your business. Another huge benefit of a subscription or recurring revenue model is that you have a steady cash flow, can plan for stock inventory and staffing levels. The most important thing to pay attention to in a subscription business model, is to minimize cancellations. Critical to minimizing cancellations is to teach people to get the best value out of the products or service you are offering – the on-boarding process is vital to get right, and that on-boarding window is in the first 60-90 days of the subscription. That’s the window where you can actually get the customers to change their behavior to adopt whatever it is you sell. To scale a business, it’s people need process, they need systems. It is important to find the right balance between documenting enough and not over complicating the business.Finding the balance between having enough and too many people is really difficult if you sell on a transactional model but if you sell in subscription, you know how many customers you have in 3 or 6 months from now, so you can staff accordingly.
Sell less to more people. Selling fewer things allows you to focus on getting it right with just a couple of things.