Recurring Revenue is King - Memberships, Subscriptions, Retainers
** MONTHLY RECURRING REVENUE: Memberships, Retainers, Subscription Boxes **
Obvious Fact: Recurring revenue brings predictable income without having to make new sales every month.
Yet few entrepreneurs and businesses have recurring revenue as part of their sales stream.
Retainers are more common in the professional services field. Lawyers for example, offer a range of services for a fixed amount each month; you pay the amount whether not you use their services.
The idea is that the professional receives this fixed amount in exchange for giving you great value (big discount), knowing that you won’t actually use that amount of services each month.
The retainer also guarantees that the professional will be available to you when needed, and when you do need services, the retainer is much less than having to pay for the services à la cart.
Medical doctors are even getting in on this in the United States.
Some have discovered that it’s better to charge a small fee per month to be on standby and then offer complicated procedures for discounted fees. They figure only 35% of patients need care each month. But for the member patient, the fees work out to be much less when services are needed.
Retainers can be looked at as a type of insurance.
The charge, say, $59/mo might include:
— one consultation either in-office. or via conferencing software
— one telephone consultation
— steeply discounted fees for more-involved procedures
One doctor or P.A., 600 patients paying $59/mo = $35,400/mo. (Example)
Many people are helping others achieve success with membership sites, from $7to $197 a month or more.
Great value for both parties. The membership site gets a fixed amount as a minimum base each month, and members get access to a much larger amount of information and discounts on additional products.
Such a fantastic way to lock in a base monthly income and of course, those who sign up are members of your ‘raving fan club’ who will buy other things you create.
Retail stores such as PriceSmart, Sam’s Club and others have proven this membership model works great; members get access to discounted prices.
Either relatively new, started in 2010 by BirchBox.
Many of them have become breakaway successes having been successful in raising large amounts of capital and creating huge subscribers bases.
— BirchBox beauty products $10/mo more than 1M subscribers
— BarkBox: dog toys, treats; 2M subs pay $20/mo
There are more than 600 subscription box offerings of United States, ranging from clothes, shoes, beauty products, wine and many more categories.
Their success is creating a niche, and ability to target market that niche. Niche marketing has become much easier using social media marketing and advertising and platforms such as Facebook and Instagram.
What’s in it for you?
I find there is better than 50% chance that every business has an opportunity to increase revenue, and create study recurring revenue by utilizing one of the above methods.
And most likely you can, too.