Biggest Mistakes Made by New Subscription Businesses
Launching any business, particularly a subscription business, can be an experience you’ll never forget for reasons that are both good and bad. If you can avoid certain mistakes there’s a good chance that your new business experience will be positive, but subscription services need a little extra thought too.
Offering Subscription Services Where There Isn’t a Need
This is a basic business requirement – that there will be a need for what you are offering. While it is great to innovate and step outside the box, if nobody wants to use your product or service, you’re unlikely to encounter success.
It takes a special sales team to sell ski lessons in a desert, so do your market research first. Subscription services are very popular, but just because you offer something as a subscription doesn’t mean it will work.
Underselling Your Subscription
If you have competitors, one way to get sales ahead of them is to offer low prices. Unfortunately, this can mean lowering your prices TOO far. If your subscription service is the lowest priced, you’ll probably gain customers – but your business will fail quickly as it won’t be making any money.
Instead, make yours the best value by offering upsells and great customer service.
Forgetting About Multiple Marketing Channels
To subscribe to your services or products, people need to know about them. Go where the people go, and market to them where they are – PPC, social media, email campaigns, and so on. Make sure you have analytics installed on your website, so you know how people got there, and then go and market to more people in the same place.
Making Subscriptions Complicated
Imagine this – you’ve set up a business offering a subscription to cans of paint. Every month, a different color. Unless… the customer wants it once a week. Or twice a month. Or a larger amount of paint.
Maybe there could be a premium option that comes with disposable gloves. Perhaps a hat for an added bonus. Confused customers don’t buy, so keep it as simple as possible!
Creating Payment and Subscription Management Software
Subscription management software already exists and works well – why try to reinvent the wheel?
A subscription as a service platform like Xion Global handles payments and automates recurring billing, as well as following up on late payments. To build your own platform to do this would not be cost effective and would take a lot of time and effort. One of the biggest factors in running a successful subscription service is getting the payments in regularly.
Using Xion makes sense and can ultimately make your business a success.