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Wednesday, April 24, 2024
Financial Intelligence

The Top 3 Surprising Benefits Of Being Paid From A Subscription

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Ever get the feeling that your cashflow structure could run a whole lot better and more streamlined?

Yes, that’s right – your profits and your losses could be fixed with one simple trick – and that simple trick is called:

The Subscription Method!

Creating a regular income that works automatically.

And we don’t mean to describe this approach to cashflow as the-one fix all, as much as we want to share the surprising psychological benefits you give yourself (and your customers) when they pay you on a subscription…

1. Creating The “Membership” Boosts Purchases

Amazon pretty much pioneered this concept with Amazon Prime.

For roughly $99 a year, you can get free shipping across the board for anything you order through the massive online shopping site.

Shoes, furniture, video games, appliances and clothes – and so much more – you can have delivered to your door – no questions asked.

Why does this work for Amazon? Well, aside from the 142.5 million members paying this $99 a year (2020) – it also happens to instill one singular thought in the happy Amazon Prime Member’s Mind:

They think, every time they log onto Amazon:

“I must get value for my money.”

John Warrillow, author of The Automatic Customer explores this, describing this concept: “The idea of sinking money into a subscription pushes customers to try to get their money’s value.”

If you can create a membership system in your business – you make it an automatic thought that your customers should make-good on that subscription they’ve invested in!

2. Subscriptions Help With Planning

Knowing your numbers can help a ton. Especially when you’re planning to sell something that expires.

Example: take the flower shop in your area.

Each month, these flower shops start from scratch, taking each month into review, looking at all the Mothers’ Days, Fathers’ Days, all the holidays in between…

From there they get to work.

Using adverts, promotions, and posters to spur you to use their flowers to celebrate the occasion!

… But there’s a catch to this.

Getting it wrong means, they won’t sell the inventory that expires in 7 days (or less.) If you’re a trying to stress a whole lot less running your flower shop – you’ll need to find a way to do this better !

And that’s what the company H.Bloom did.

H.Bloom provides luxury flower-delivery services. Except they don’t do it normally. They do it subscription-style.

Using scheduled weekly, biweekly or monthly deliveries…

Hotels, guesthouses, restaurants and spas all get the benefit of having fresh flowers all the time, while H.Bloom needs only buy prepare their flowers according to their successful debit order runs.

Instead of needing to spend money to advertise and get people excited month-on-month – you can practically guarantee your own profits by the “x” amount of customers who pay you on a monthly basis.

3. Subscriptions Keep Customers Close, Building Relationships…

Instead of each sale being a once-off purchase-and-go…

You now get the benefit of chatting with customers, month-on-month and getting to discover what they really want.

You can ask questions about your service, or products, and find out what it is they prefer…

One example can be… if you sold bakkie canopies, and now had worked in a payment-plan to help the client pay off their canopy over 6 months, as opposed to an immediate once-off payment…

Could you, over the course of this 6 months, introduced scheduled calls to involve the client in the “build-your-canopy” process? Showing them:

– Pictures of the build?
– Suggestions for foam-inserts?
– Options for upgrades in the later months?

If you connect with your customer on a regular basis, you’ll get a better feel for what they want, and potentially discover new ways to increase the value of the overall sale.

Concluding subscriptions, debit orders and scheduled payments…

These are not just words that describe how money comes into your business – these are different buying behaviors from your customers.

Engage with them in new and different ways and you might find that while your current billing method may have been hurting your business – the subscription method could have been the missing piece, for better payment stability and less stress.