How to Begin an Online Subscription Business in 2022 |
Leigh Metcalf, the founder of the sewing studio in Atlanta, Topstitch, was looking for a way to build the community of stitchers. As the flu pandemic swept through the country, the need for an alternative way to run her business was much more important.
The answer?
An online community. She started an online sewing group specifically for sewers of garments the internet, and now, her subscription service online has been growing rapidly - so much so that it's her only attention right now!
There's an abundance of people talking about different methods to create businesses online. There are discussions about putting online courses on Skillshare or dropshipping through Amazon and flipping products.
Although each may be useful, the online business model which is gaining the most attention is the online subscription, and a bit of community! In this post we'll explain everything you need to be aware of if you're thinking about how to begin your own online subscription company.
If you want more support in building your online community Join OUR Mighty Community for free and get to know other newly well-established community owners! We'd love to meet you. Register at no cost!
This article...
1. What is an online business that offers subscriptions?
2. Why start an online business for subscriptions?
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 company in 5 steps
3.1. Refine your niche
3.2. Choose your monetization model & platform
3.3. Locate your clients
3.4. Deliver value
3.5. Evaluate and adjust
What exactly is an online-based subscription company?
A subscription-based online business is a product, service, or space for members to pay for regular access to. Online subscription businesses usually either sell access to a digital product or service, for example, an online class or software, OR to a digital community.
The subscriptions on the internet are part of the larger subscription economy, which is growing. If you've ever signed up for an annual shave-club as well as a vegetable delivery service, or wine subscription, you've been a part of a subscription company.
A few companies are merging online subscription with physical items, such as ArtSnacks Mix that delivers regular art supplies by post, but it also provides access to an online community, which offers artistic classes, ideas as well as other services.
Start your free Trial No credit card is required.
Why you should start an online business for subscriptions?
Reccurring income
Without a doubt the most significant benefit of an online subscription service for solopreneurs and multimillion dollar businesses alike is the possibility of recurring revenue.
There was a time where you bought software like Microsoft Office in a box at the local computer shop, with access for the life of your computer. Today, Microsoft, like many other businesses, is shifting to a subscription model. This means it costs less upfront, but they earn way higher from each customer throughout their lifetime - all thanks to the recurring revenue.
On a lesser scale, many solopreneurs are also benefiting from an online subscription business. We have examples of these on our Stories of Awesome.
Scale
The second huge advantage to an online subscription company is that it provides enormous scale as an owner of a business. The content you create can be shared once and have it reach thousands or even hundreds of thousands of people. In the case of, say, if you create content for an online forum, it will not have much significance to you whether there are five people consuming it , or hundreds.
You still only create your content once.
The same applies to an online course. You don't need to keep creating a course over and over again. Offering a course through an online subscription model means adding recurring payments for access.
Long-term customer relationships
Another major benefit of an online subscription service is that it puts 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 the foundation for a long-lasting relationship. It could be by joining of an online community, or by sending periodic newsletters, or by reaching them with social media.
The benefit of having a long-lasting relationships with a member or customer to the business can't be overestimated. It gives you a willing audience to test the latest products, receive feedback from and even upsell to.
The effect of the network
The value that we see in community forums is what we like to describe as the effect of networks. In essence, the network effect implies that your contribution to a community member is not only one-way.
Actually, when you establish a community-based subscription company, the members provide value to each other as well. They'll communicate with each others, assist each other to help each other, and create lasting relationships. This all adds to the worth of your group, without doing any extra tasks.
Predictable growth
Not the last, and certainly not the last, launching an online subscription company will provide you with clear and predictable expansion. In essence, as long as the churn of your members isn't overly large, you'll be confident that whatever increase you make in the next month will rest on the shoulders of what you've achieved this month. As a result, you can also predict what your subscription business will be one year from now.
Start your free Trial Credit card not needed.
How to begin an online subscription company in just 5 easy steps
Refine your niche
If you've got a general sense of where you would like to apply your creativity first step towards creating an online subscription company that actually works is to identify your market.
When it comes to building online communities, we teach a process that we call the process of Community Design(tm) to assist to build this. The first step of the process of Community Design(tm) is to identify members who are ideal for your community. It is a person who has a problem to solve which you could help.
Usually, we recommend talking to potential ideal members of your subscription service for instance, which in our case is an online community. These interviews can help discover the issues which members face, as well as clearly define areas where they'd want to get some assistance.
When you've finished the interviews, you are able to create what is known as A Large Purpose Statement. The format is as follows:
Choose your monetization model & platform
The next thing to do, after you know who your ideal member is and the problem that they are facing, is to choose the business model that can assist them. Partly, the business model that you choose is going to rely upon the issue that they face. If there is teaching needs to be done, you need to include an online platform for courses. If you've got the software to solve your problem, you're probably building something altogether different.
We think extensively about communities online, the system that we built at is centered on community subscriptions and offers various ways to make money. It allows you to add paid subgroups, online classes or events. Additionally, you can bundle all of the above.
Choose the model for monetization that can allow you to serve the ideal customer while you build your business.
As you start make sure you remember the KISS concept - which is, keep it simple... You know.
Find your customers
The next step will be to determine the best way to acquire new customers. There are many options to achieve this, and we'll not talk about a one-size-fits-all approach. It is important to determine the best approach to best serve your members.
However, at most, you could go back to the people whom you talked to and let them know that you are creating an online subscription service.
Then, use the tools you've got in your arsenal to search for potential customers. This could include things like:
- Social media
- Email Lists
- Invitations that are custom-made
- Webinars
- Ads
- Free trial
Deliver value
Getting people in is one half of the challenge. Insuring they stay is the other half. That's why, once you have some paying customers for your online subscription business You must begin delivering value.
The good news is when you've put in the effort to determine the ideal customer it's easy to provide them with the things they require. That's why using the Community Design(tm) method helps your company become more efficient because you're not trying to deliver value to a bunch of various kinds of customers that all have different needs.
Resist the urge to think about the value of quantity. Too many people start an online subscription service thinking that clients will be satisfied if they have an avalanche of content. The creators get burnt out trying to make it available.
Instead, concentrate on the change your participants are trying to go through and provide them with the information they'll need to make that happen.
Assess and adapt
Also, ensure that you regularly review your current strategies and make adjustments. It's in your best interest to stay lean in an entrepreneur in the subscription industry, and do not be afraid to implement those changes to assist you in serving your customers more effectively.
Conclusion
Now that we've gone through the process of starting an online subscription business, the only thing left is getting started! Believe it or not this is the toughest portion. There are many who dream of it and fail, only to suffer from analysis paralysis, overthinking enough that they fail to take that first step.
Do not be the person you are. Just get started! If you don't have all the answers, it's going to be a learning experience as you progress. This is the great thing about this adventure.
Do you have the right tools to launch your own subscription-based business?