---

What Is A 'Subscription'?

Subscription offers provide tangible or intangible benefits on an ongoing basis in exchange for a recurring fee.

The attractiveness of subscription models is its predictability. This form of value ensures a certain revenue in every billing period.

The key is to keep customer attrition as low as possible by keeping your subscribers happy and constantly attracting new customers.

Josh Kaufman Explains 'Subscriptions'

A Subscription program provides predefined benefits on an ongoing basis in exchange for a recurring fee. The actual benefits provided can be tangible or intangible—the key differences are:

• the expectation of additional value to be provided in the future, and…
• that fees will be collected until the subscription is canceled.

In order to create a successful subscription, you must:

1. Provide significant value to each subscriber on a regular basis.
2. Build a subscriber base, and continually attract new subscribers to compensate for attrition.
3. Bill customers on a recurring basis.
4. Retain each subscriber as long as possible.

Cable or satellite television service is a great example of a subscription. After signing up, the company will continue to provide television service as long as you make the payments. You don’t have to call up the company every month to buy another thirty days’ worth—the service continues as long as the invoice is paid.

Subscriptions are an attractive form of value because they provides more predictable revenue. Instead of having to resell to your existing customers every day, subscriptions allow you to build a steady base off loyal customers over time. This model ensures a certain level of revenue coming in each billing period.

The key to subscription offers is doing everything you can to keep customer attrition as low as possible. As long as you continue to make your customers happy, only a small percentage of your customer base will cancel each period, giving you the ability to plan your finances with more certainty.

Any subscriber attrition you experience can be overcome by signing up more customers.

Questions About 'Subscriptions'

• Does delivering value as a subscription / continuity program make sense for your business idea?
• If so, what do you need to plan for to make it successful?

---

"Please accept my resignation. I don't want to belong to any club that will accept me as a member."

Groucho Marx, comedian

---

---

Share this concept:

https://personalmba.com/subscription/

---

---

---

---