There are several business models to use when it comes to business and entrepreneurship. The most common one in Zimbabwe is the direct-to-consumer model. It directly sells products or services to customers, whether online or offline. In the global digital economy context, the subscription model is arguably the most common. However, I know the subscription model is still a turn-off for many in Zimbabwe. Anyways, the subscription model entails that for people to access products or services, they have to pay a subscription. Most of you are familiar with DSTv services – that is a good example. Today let us look into how you can grow a subscription-based business.
Examine The Current State Of Things – Your Starting Point
Before doing anything, the first thing is to take stock of the current state of things. With respect to our subject matter, there are key metrics to consider. You have customer acquisition rate (CAR), which is the total number of people who opt-in or sign-up during a marketing campaign divided by the total audience (expressed as a percentage). Then you have customer churn rate (CCR), which measures how much you are losing customers. In essence, the churn rate is the reciprocal of customer retention. This means customer retention will be lower if the churn rate is higher, and the converse is true.
There is also customer lifetime value (CLV) which is the total worth of a customer to a business over the course of their relationship. That means the higher the value, the better. You could alternatively look at it from the perspective of revenue per customer over a specified period. The other metric to look at it is the average customer acquisition cost (CAC). This is the cost of bringing in a new customer. By looking at all these metrics, you will better understand where you currently stand. You will then have a fuller picture of what needs to be done to grow. So, what must you do?
Refine Your Digital Marketing Approaches
To thrive as a subscription-based business, you must be adept at using digital marketing. Digital marketing is the promotion of products or services via the use of electronic or digital media. Examples of such media are the internet and social media, as well as digital billboards, digital TV or radio channels. There are several approaches, e.g. email marketing, content marketing, and influencer marketing. Use data analytics from your prior efforts to see what is working and what is not.
Your website is vital in all this, too, so make sure it is up-to-date and functions smoothly. People are generally lured by educational and entertaining (edutainment) content. This means figuring out ways to make your marketing activities more engaging. Desist from hard-selling as that tends to push prospects away. Make your marketing so subtle or indirect that people barely even notice it. Find ways to use psychological hacks as well. Overall, let your digital marketing approaches be evidence-based, not just random or generic.
Solidify Your Customer Relationship Management (CRM)
CRM is typically a digital system used to identify, target, acquire, and retain customers. Notice I said “typically a digital system,” – meaning it is usually some form of a computer-based system. However, it is quite possible to have a CRM that is not necessarily computerized. CRM is mainly concerned with profiling prospective and existing customers, intimately grasping their needs, catering for them, and developing and sustaining working relationships with them.
Solidifying CRM is mainly a function of streamlining your internal frameworks as a business. That can entail things like automating workflows. Putting together a comprehensive customer database helps too. Assigning clear responsibilities to staff and having structured reporting frameworks is paramount. It is also imperative to inculcate a collaborative internal communication system. You must also improve your engagement with customers by having a multiplatform, two-way communication regime.
Enhance Your Value Proposition
Ideally, your value proposition must be unique in order to lure prospects. There are a number of ways you can explore to make your brand unique and alluring. One key area is that of pricing; figure out how you can make your prices more competitive. Consider incorporating specials such as discounts or rolling out a customer loyalty rewards framework. You should try negotiating for cheaper prices or flexible payment terms if you have suppliers. That will give you room to review your pricing in a way that lures prospects. You also should analyse your customers’ preferred payment methods.
There can be something there that can show you a witty way to boost your value proposition. Providing a wide range of payment options can actually be a powerful value proposition. You could possibly allow instalment-based payment arrangements. Another important pool of information is customer queries and complaints. The assumption is you already solicit and encourage customer feedback. If you do, then look at all that feedback to note areas that need improvement. By doing so, you build customer loyalty and inject life into word-of-mouth marketing, plus referrals.
That is how you work towards growing your subscription-based business. One thing that you should keep noticing in our discussions is the importance of data. It should become your life principle not to make uninformed decisions. You also should notice that the importance of being customer-centric keeps popping up. That is the universal secret to your business, i.e. understanding your customers and seeking to satisfy them at all times.