If you can get 20/30% of customers coming back every month and making a purchase from your company, you should do pretty well.

2. When you sell a customer a subscription, that one sale can
create a long-term relationship thanks to the magic of
recurring revenue.
The 8 Subscription Business Models
1. MembershipSite Model- If youhave a specificexpertiseorpassion,nomatterhow obscure,
there maybe people willingtopayforaccess to whatyou know.The membershipsite
subscriptionmodelinvolvespublishingyourknow-how behindapaywall thatrequires
memberstobuyaccess to yoursecrets.The membershipsitemodel canworkforyour
businessif youhave accesstohighlyspecializedinformationthatkeepschangingovertime.
What do you know that nobodyelse does?
If you have developedaunique approachtorunningyourbusinessorhave beenable toachieve
above-average profitabilityinacompetitive industry,thenothercompaniesinyourindustrywantto
knowhowyou didit.The most financiallysuccessful membershipsitestendtofocusonhelping
businessownersmastera specificindustryorskill.While acustomercanbe lucrative ontheirown,
mostmembershipsite operatorsuse the subscriptionrelationshipasaplatformtocross-sell
additional things.
Whothe membershipsite model works bestfor.
Considerthe membershipsitemodel if youhave:
 A tightlydefinednichemarket,likeambitiousdance studioownersorwoodworking
enthusiasts.
 Accessto a steadyflowof unique knowledge,orexpertiseinsiderinformationthat
constantlychangingandthat subscribersneedtostayinthe know.
InsiderTips
 The most profitable membershipsitesare usuallythoseof business-to-businesscompanies
that solve areal problem,offering“musthave”informationandmaintainingconstantly
evolvingforumsthatrequire thatasubscriberstayloyal overthe longterm.
 Most successful operatorsproduce apiece of contentinmultipleformats(e.g.,video,
podcast,and writtentranscript) toaccommodate subscriberpreferencesforconsuming
informationandincrease the chancesthe site willbe foundbyGoogle’ssearchengine.
 It can be difficulttomake a goodlivingfromjustthe revenue yougetfromjustthe revenue
youget fromsubscribersalone,especiallywithaconsumer-orientedsite,sohavingother
waysto monetize yoursubscribersthroughadjacentproductsandservices(e.g.,

3. conferences,coaching,courses) isthe bestwaytobuilda significantbusinessarounda
membershipsite.
2. ContentBuffetModel – offersunlimitedaccesstoawarehouse of value.Like anylibrary,
you’ll neverconsume all of the informationavailable,butthe breadthof contentthatis
offeredpromisestoalwayshave somethingyoulike.The businessmodelissimple:the
provideraccumulatesawide selectionof content,andthe consumerrentsaccesstoit.
Acquiringyour library.
Giventhe challenge of creatingalarge libraryof contentbefore youhave a single paying
subscriber,youmaybe temptedtothinkthe ContentBuffetmodel isbestsuitedformedia
giantsand venture-capital-backedstart-ups.However,withsome creativityanda little cash,
anyone can assemble alibraryof contentandrentout access to it.The bestway to win
subscribersforyourlibrarymodel istoinvite themtoshare incontenttheycare aboutand then
ask themto subscribe formore.
Whothe ContentBuffet model works bestfor.
Considerthe ContentBuffetmodel if youhave:
 A libraryof “evergreen”content- orthe wherewithal toacquire one.
 A legionof existingfans(blogsubscribers,Youtube Followers,LinkedInconnections,etc.)
whoalreadyconsume yourfree content.
InsiderTips
 Successful ContentBuffetmodeloperatorssprinklejustenoughnew contentintothe
offeringtokeepsubscribersloyal whilerelyingonalarge libraryof “evergreen”contentas
the foundationof membership.
 To preventsubscribersfromcherry-pickingthe bestpartsof yourlibrary,itmay be
necessarytogive customersaultimatum:subscribe tothe entire libraryoryoucan’taccess
any of it.
 The acquisitionof yourlibraryisa chicken-or-eggconundrum.Unlessyouhave atruckload
of money,lookforcreative waystopartner(e.g.,licensing,revenue-sharingagreements)
withcontentownerstobuilda librarythat’slarge enoughtoimpresssubscribers.
3. VIP ClubModel- The VIPClubmodel offerssubscriberson-goingaccess tosomethingrare.
While itismost commonlyassociatedwithexclusive sportsclubs- thinkgolf,tennis,skiing,
yachting- itisalso usedbybusinessessellingtootherbusinesses.A large partof the value of
the VIPClubModel isnot onlyaccessingthatwhichis rare but alsothe chance to meetwith
a networkof otherpeople who-likeyou-made the cut.
Who,Rather than What

4. Exclusivityiswhatmakesthe VIPmodel soappealing. Whenthereismore demandthan
supply,everyone wantstobuy.One of the thingsthat make the VIPClubmodel workisthe
privacyitself.Forsome achievement-orientedpeople,the higheryoumake the barrierto
enter,the more theywantto climboverit.
Subscribingfor Status.
In some ways,the VIPClubmodel sellssocial status-thinkof itas social climbingon
subscription.The subscribeforstatusideaisnotlimitedtoattractingconsumerstoyour
subscription;itworksinB2B as well,whenbusinesseswanttoportray an image thatallows
themto punchabove theirweightclass.
Couldit work in your industry?
As withall the subscriptionmodels,I’mpresentingtoyou,Iencourage younot to say“that
wouldneverworkinmyindustry,”butto keepaskingthe questions“How couldthismodel
applyto myindustry?’and“What part of thismodel couldIborrow for mycompany?”
Whothe VIP Clubmodel works best for.
Considerthe VIPClubmodel if youhave:
 Somethingthat’sinlimitedsupply- almostalwaysaservice oran
experience-andinhighdemandamongaffluentconsumers.
 A marketof achievement-oriented“strivers,”whoare alwaysattractedto
the greenergrasson the otherside.
InsiderTips
 The secretto makingthe VIPClubmodel workisnot offeringalacarte access.Force
customerstomake a decision:if theywantaccesstosomethingtrulyrare,the only
waytheycan have itis byenteringintoalong-termrelationship.
 The greateststrengthof the VIPClubmodel isalsoitsbiggestweakness.By
definition,whatyou’re sellingisinlimitedsupply.
4. Priority Service Model- Involvessellingpriorityaccesstoagroup of your customers.The
model waspopularizedbythe software industrybutcanbe usedby anycompanywith
customerswillingtopayto jumpthe service queue.Whenyouadoptthe PriorityService
model,youare publiclydeclaringthatall of yourcustomersare nottreatedequally.That
may soundwrong,butprioritizingsome customersoverothersissomethingmostof usdo
unconsciouslyeveryday.Thinkbacktothe lasttime yourlargestcustomercalledto
complainaboutan issue.Didyouprioritizehercall overthatof a small customer?Most
people understandthatbusinessprioritize theircustomersandwill understandaslongas

5. youexplainhowyouprioritize.Withthe PriorityService Model you’rebeingtransparent
aboutwho getsservedfirst,whichinsome waysisfairerthandeprioritizingsome customers
withouttellingthemwhy.Couldyoucharge yourcustomersasmall monthlyfee forpeace of
mind,forknowingthatwhentheyhave anissue theywill be takencare of first?It mayseem
like aninconsequentialamountof money,butasmall fee paidbya large enoughgroupof
your customerscanadd a steadystreamof recurringrevenue thatwill helpprovideabase
of saleseachmonth,boostcash flow,andmake yourcompanymore valuable whenitistime
to sell.
Whothe Priority Service Subscriptionmodel works for.
Considerthe PriorityService Subscriptionmodel if youhave:
 A relativelycomplex productor service.
 Customerswhoare not overlyprice sensitive.
 Customersforwhomwaitinginline canhave catastrophicconsequences.
InsiderTips
 The PriorityService Subscriptionmodel canbe usedinconjunctionwithothersubscription
modelstoadd an additional annuitystreamof recurringrevenue.
 To use thissubscriptionmodel,it’simportantthatyoualreadyhave agood reputationfor
baseline service.If yourcustomershave beensatisfiedwithyourbasicservice,theycan
reasonablyassume thatpayingforthe nexttierupwill wow them.
 Leverage technologyandsystems(e.g.,Zendeskora dedicatedphone numberstaffedby
experiencedsupportstaff) sothatyoudon’tlumpyour standardcustomersinwiththose
whoare payingfora special tierof service.
 The PriorityService subscriptionmodel canworkdoublywell whenyourcustomersare small
and midsize businessesthatlacktheirownin-house resourcestogettheirquestions
answered.
5. Consumable Product Model- Thismodel offersaproductrather thana service ona
subscriptionbasis.Itinvolvesofferingasubscriptiontoaproduct thatthe customerneedsto
replenishonaregularbasis.The value propositionissimple:life istooshortto worryabout
mundane taskslike rememberingtopickupdiapersor razor blades.Subscribe andyou’ll
neverrunout.
Your bestdefense:Branding
There are likelyathousandsubscriptionbusinessesthatfail todifferentiate whattheirbusiness
has to offerandinsteadrelyonprice to try to compete.Isitpossible forasmall businessto
succeedwiththe consumable productmodel?Yes,providedyou buildbrandequityandguard
your supplychain.The companieswhoare goingtobe around intenyearsare not justhawking
otherpeople’sproducts.The companiesthatwill survive have twothingsincommon:theycare

6. deeplyaboutthe product,andtheyare focusedonbuildingabrand.Buildingaunique brand
requiresthatyourpositioningmeettwocriteria:itneedstobe importanttocustomersand
make youunique.Whenitcomesto consumables,if you’renotgoingtobuildabrand, the best
customerexperience isinvisible.It’snotlike buyingacar, where yougetto slide intoabeautiful
leatherseatandinhale the new-carsmell.You’re buyingacommodity,andif you’re notgoingto
offera brandedexperience,thenthe fastest,leastpainful optionalways wins.Fora
consumablessubscriptionmodel toworkinthe longterm, youneedsomethingotherthanprice
and selectiontocompete againstthe bigplayers.
Whothe Consumable Product model works best for.
Considerthe consumable productmodelif youhave:
 Somethingtosell consumersthatnaturallyrunsout.
 Somethingtoofferthatisannoyingtoreplenish.
InsiderTips
 To compete withthe bigplayers,youneedtobrandwhatyou sell asyour own.
Name the product yourself,evenif you’rebuyingitfromasupplier.
 Invite customerstofall inlove withyourbrandthroughthe experience youprovide.
 Make sure youhave a steadyflow of supply.Eithertake control of the
manufacturingprocesstoensure youcan findenoughsupplywhenyouneedit.
 Don’tunderestimate the logistical challengesinvolvedinfulfillingordersfora
physical productor inprovidingservice forthousandsof subscribers.
6. BoxedGoods Model- Thismodel involvesshippingacuratedpackage of goodsto your
subscriberseachmonth.Partof the funfor the customerisdiscoveringanew setof
productseach month.Some boxedsubscriptioncompaniesgiveyouvarioussamplesof
productseach monthfora small price,buttheirbiggergoal,disguisedbythe subscription,is
to actuallyto create a robuste-commerce site fortheirproducts.
Whothe boxedmodel works best for.
Considerthe boxedmodelif youhave:
 A passionate,clearlydefinedmarketof consumers.
 A large and variednetworkof manufacturersthatare willingtogive youa deepdiscountfor
a onetime orderandhave the capacityto fulfil it.
 The abilitytohandle the logisticsof shippingaphysical product.
 A desire touse subscriptionstoestablish,alarge e-commerce site.

7. InsiderTips.
 A bigpart of the reasonpeople subscribeisthe joyof findingsomethingnew.Considerhow
you’ll keepsurprisingsubscriberswithnew products,monthaftermonth.
 Don’tunderestimate the challenge of logisticsandfulfilment.The more datayoucollect
fromyour subscribers,the more theywill expectyoutocustomize theirexperience by
sendingthemitemsbasedontheirreportedpreferences.Thisincreasesthe complexityof
fulfilmentexponentially.
7. SimplifierModel- The harddrive inourcollective brainisgettingdangerouslyclose to
overload.This hasgivenrise tothe subscriptionmodel Icall the simplifier.Withthe
simplifiermodel,youoffertotake one or more recurringtasksoff your customers’to-do
lists. Virtuallyanycompanyservingbusyconsumerscanbenefitfromofferingasimplifier
subscription- andthe richeryourcustomers,the more acute theirneedforsimplification.
Up-sellingandCross-sellingSubscribers
Like manysubscriptionmodels,the frequencyof customercontactinherentwithmonthlysimplifier
model subscriptionsisgreatforup-sellingandcross-sellingsubscribers.
Set it and forget it
The simplifiermodelpromisestwothings:notonlywill youtake to-doitemsoff yourlist,youwill
alsobe the one remindingthe customerthatthe taskneedsdoing.One partof whywe’re feeling
overwhelmedisthe lengthof ourto-dolists;the otherpartistryingto rememberall of ourtasks and
commitments.Rememberingtakesupspace onour mental harddrive,whichleadstoanxietyanda
sense of beingoverwhelmed.The simplifiermodel worksinmanyindustries.There isenormous
value inthe “setit and forgetit”value proposition.Yougetthe recurringrevenue andsteadywork,
and yourcustomergetsthe benefitof knowingit’sone lessthingtoremembertodo.
Considerthe simplifiermodel ifyou have.
 A service thatyourcustomersneedonan ongoingbasis.
 The abilitytosell torelativelyaffluentbusyconsumers.
 A personal service businesslikepetgrooming,massage,tutoring,window cleaning,carpet
cleaning,bookkeeping,etc.
InsiderTips.
 Discoveryoursimplifiermodel byinterviewingyourtargetcustomer.Have herdescribe a
typical dayand ask herto showyou herto-dolist.Askyourself whatyoucouldoffertotick
somethingoff thatlist.
 Part of the value propositionof the simplifiermodel isthatyouwill remembertodoa task
so yourcustomerdoesn’thave to.Therefore,make sure yousetupa regularschedule for
deliveringyourservice.If yousayyouare goingto be there the secondTuesdayof every

8. month,committo itso the part of your customer’sbrainthatwonderswhenyou’re coming
nextcan turn off andrelax.
 An ongoingservice contractisa platformforcross-sellingandupselling.Deliveringthe tasks
associatedwithyourservice contractoffersabuilt-inwaytosee whatelse youcouldprovide
your customer.Youdon’tneedtobundle all yourservicesintoacontact; justpickthe onesa
customerneedsregularly,andthose tasksshouldactas a platformto ensure you’re the first
persontheythinkof forotherjobs.
8. Rest Easy Model- It offersinsurance againstsomethingyourcustomershope they’ll never
need.Youare there tohelpyourcustomerswhentheyneedyourservice,butotherwiseyou
stay outof theirway.You make moneyfromchargingmore insubscriptionrevenue thanit
costs youto deliverthe servicewhencalledupon.Youcanalsojack up yourprofitsby
investingthe moneyyourcustomersgive youbefore theyneedyourservice.
Wouldit work in your industry?
If you sell somethingpeople care about,you can considerthe RestEasymodel foryoursubscription
business.One of the challengesof the resteasymodel isguessinghow frequentlyyourcustomers
will needyourservice.Underestimateandyouwill endupspendingmore thanyoucollectin
premiums.Overestimate significantlyandyouwill be susceptible tocompetitorsofferingtoinsure
your customersata lowerrate or havingyourcustomersoptto “self-insure,”whichmeanstheyopt
to bypassinsurance altogether.A little historycanhelpguide youin settingyourprice.If youlook
back overthe course of a year,how manytimesdoesa typical customercall you,andwhatdoesthat
service call costyou to deliver?Providedyoucharge more inpremiumsthanyouexpecttopayout in
servicesprovided,you willearnanunderwritingprofit- the amountof moneyyouearnfortakingthe
riskthat, if the customercallsmore frequentlythanyouexpected,youstill needtohonouryourend
of the bargain.
Businessesalsobuy peace of mind.
It’snot justconsumers whobuypeace of mind.Businessesalsobuymonitoringandinsurance
protectiontheyhope theywillneverneed.Like all insurance,the resteasymodelforsubscriptionsis
sellingthe serenityof knowingthat,inthe eventof acatastrophe,you’re covered. Thiscanwork
whenyou’re sellingtobothconsumersandbusinesses,buttoapplyitinyourindustry,it’shelpfulto
understandhowinsurance companiesmake money.
The magic of float
Most people thinkinsurersprofitsimplybychargingmore forpremiums thantheyactuallypayout
inclaims.While thisunderwritingprofitisimportant,the real moneyismade fromsomethingcalled
float.Underwritingprofitisthe difference betweenpremiumsgeneratedandclaimspaid,while float
isthe moneyyoumake investingthe cashpeople payininsurance premiumsbefore theymake a
claim.Calculatingyourriskisthe primarychallenge of runningaresteasymodel company.Big
insurance companiesemployanarmyof actuarieswhouse statistical modelstopredictthe
likelihoodof aclaimbeingmade.Youdon’tneedtobe quite soscientific.Instead,startbylooking
back at last 20 servicesyouprovidedwithaguarantee andfigure outhow manyservice callsyou

9. neededtomake.Thatwill give youaprettygood ideaof the possible riskof offeringarest-easy
model subscription.
Assumingyouare not an actuary andyou didn’tgetyourdoctorate inmath, it’sprobablya wise idea
to go slowinleveragingthe rest-easysubscriptionmodel.Youcanlimityourriskina numberof
ways:
 Offerthe rest-easysubscriptiononlytoa handful of customerssoyoucan get a sense of
howoftenclaimsare made.
 Limityourcustomeroffer.Youcouldofferto coverup to a certainamount,fora limited
numberof reasons.
 Reinsure the riskby buyinganinsurance policyof yourownthat coversyoufor an
unexpectedvolumeof claims.
Whothe rest-easymodel works best for.
Considerthe rest-easymodel if youhave:
 Somethingthatisdifficult,expensive,orimpossible toreplace.
 A businessthatallowsyoutoabsorbthe cost of a claimby leveragingyourexistingassets
rather thanpayingout cash.
 A historyof customerservice callsthathelpsyoupredictthe likelihoodandfrequencyof
claims.
InsiderTips.
 Limityourrisk.Premiumsmaylooklike free money,butyouneedtoensure youhave the
resourcesandinfrastructure tohonouryourcommitmentincase yourcustomercalls.
 In the rest-easymodel,you’re offeringaninsurance tohelponlyif yourcustomerneedsit.
My listof eightsubscription modelsisdefinitelyincomplete.Youcouldargue thatthere are entire
modelsI’ve missedthatdeserve tobe mentioned.Also,astime goeson,I’msure we’ll see new
modelsemerge thathaven’tyetbeencontemplated.
My hope,however,isthatbyseeingthe range of subscriptionmodelsthatare out there,you’ll be
able to jotdowna fewpossibilitiesforlaunchingyourownsubscriptionbusinessorcomplementing
your existingbusinesswithsomerecurringrevenue.
I hope youagree that while cloud-basedsoftware companiesandmediatitanshave pioneeredthe
subscriptionbusiness,itisa model thatyoutoo can leverage,whetheryouowna law practice,a
coffee shop,ora day-care centre.
If you wouldlike myhelpinchoosingthe bestmodel foryourbusinessandthe beststrategyto
implementit,pleasegotomy site; www.ladieswithhighheelshighgoals.com andclickonthe “work
withLumka1-1” button.