You have a burning hot business idea or product
Now what? We help entrepreneurs effectively take the crucial next
steps that turn profit-making dreams into reality. We can help
you monetize your good idea in an impressive business ready to
go to market & rapidly grow.
One of the very best ways to grow your business is by getting closer to your customers & prospects. They know what they want to buy. They know what they need. The trick is helping YOU better understand what they want & need.
Our collective brilliance model is the ultimate way to do this.
It can also unleash the innovations from your own team and leverage the brilliance at work at your competitors to help your business grow.
The app market gold rush continues. Are YOU selling to the rapidly-growing pool of ready buyers... now more than 450,000,000 strong?
Don't know how to program an app? No problem, we have some of the best app developers in the world. Don't know how to market an app? No problem, we have some of the finest mobile marketers in the world.
The mobile app market is a pool of global buyers who quickly open their wallets for quality offerings. Isn't it time your company took a bite out of that massive market?
If you lean on marketing alone to drive sales, you're missing out on the major lift of telesales. A quality telemarketing team can increase your close ratio by three to six times or more.
So that you can see the amazing revenue impact for yourself, BI can help you test your way into telesales using internal or outsource teams. What would 3 to 6 times more closes mean to your revenues this year? We have cream-of-the-crop telemarketing professionals in our best-in-class subcontractor network ready to show you the money.
DEVELOPING AND INSTALLING A NEW SUBSCRIPTION MODEL FROM SCRATCH
Our Subscription Business Expert Consultants Help You Do It All Right
Developing & installing a highly profitable subscription model is best accomplished by expertise equipped to help you do all of the relevant parts as right as possible. Doing it right means avoiding wasteful expenses of time & money while setting up many parts to work together toward maximizing revenues & profitability. Those parts include many details of ideal business structure, product development, website development, legal matters, marketing, sales, planning & execution, accounting, infrastructure and so on.
Our team has extraordinary strategic & nitty gritty experience in some of the best run subscription models in the world. For example, we are expert at helping you:
consult on best practices and insider innovations
to help you with all of the rest so you do it all right,
Etc. (there are many more)
Could you try to do all of this on your own? Yes. But the reason to hire talent
like ours is for the expertise to do it right which also means the
experience to help you avoid making costly mistakes from best-guess approaches.
In all new business thrusts you either hire "been there, done that" help
to maximize your chances of success or take best guesses and rely on hope that
it will work out to your satisfaction. With so many crucial variables in this
particular kind of strategic thrust you are best served by engaging experienced
talent rather than gambling too much on hope. We can help you both save lots
of money (by avoiding common mistakes) and make big money by doing it all right.
Crucial Subscription & Membership Business Model Metrics To Monitor
In creating a business model one should always identify a list of
crucial metrics to help manage the business. There are many vital
variables to be tracked by the subscription business entrepreneur.
Newly acquired subscribers: we
often simplify this to the term "newstarts" as it represents
how many brand new subscribers have been added (started a subscription)
in the latest subscription period. Many companies measure subscription
periods in monthly terms so this is often answering the question:
how many new subscribers have joined us in the last month?
Cost of acquisition: average
cost of acquiring each new subscriber across all mediums. Novices
almost always imagine this to be considerably less than reality.
Established enterprises often spend up to all of this to "buy" a
new subscriber, knowing the real money is in the second transaction
be that next year's renewal or additional product or service sales
made to new subscribers this year.
Revenue-per-subscriber: this is
average annual revenue realized from each subscriber which is the
key metric to help you think about how much each subscriber is
worth to your business in the short term.
Lifetime value: this is usually
an estimation of the total average revenue you can make from each
subscriber while they remain a subscriber though some companies
use this term as a calculation of total revenue made from each
subscriber to date. The former estimates value based on the future
while the latter works only from today backwards.
90, 60, 30 days to expiration:
these 3 numbers are primarily used to focus final efforts on renewal
campaigns as a good subscription model puts great effort into keeping as many customers as possible. Established enterprises know it
is cheaper to keep a customer than to replace them with a new one
so they give great focus toward renewing every single subscriber.
Active subscriber base: this represents
your total number of active (currently paid) subscribers. This
is sometimes more formally called "active paid subscriber
distinguish it from lists of names you may have in your database
who haven't actually purchased anything (who are often called leads).
Cancels: the pool of people who purchased something but have since canceled their subscription.
Expires: the pool of people who have been subscribers but have let their subscription lapse. Expireds didn't cancel- they chose not to renew.
Lead database: the number of unique
people in your database who haven't actually purchased anything.
For example, a website might encourage visitors to register for
something(s) in hopes of being able to promote those people in
other ways to convert them into paying subscribers. These are better
than unknown prospects (unique website visitors) because you have
some contact information (and thus a better chance at selling them
Etc. (the above is a good sampling of important
subscription business metrics but there are a number of others
we can also share with you)
These kinds of metrics are the numbers that gauge the relative health of your subscription
business. They quickly answer questions about whether it is trending in the
right direction at any point in time. Growth in metrics like newstart quantities,
average revenue-per-subscriber and active subscriber base will objectively
reveal such answers at-a-glance. If the trends are moving in the wrong direction
metrics like these can flag a problem early giving you maximum time to dig
in and correct any weaknesses to turn things around.
Applications of Membership & Subscription Business Metrics
In applying the above metrics, the subscription model entrepreneur should be concerned
about all facets of the relationship with their customers. You'll
observe fairly steady growth in newstarts as they
are both current revenues as well as your best upsell and cross-selling
targets. They are also next year's very lucrative renewals (without
a repeat of the typically heavy cost to acquire them). You have
to do whatever you can to stay close to your subscribers so that
you can maintain an intimate understanding of their ever-evolving
wants & needs. A good
mechanism for objectively gauging their experience with your
company can help you intelligently grow your business. A documented
model that lays out exactly what happens to each newstart is essential
in a professionally-run subscription business. It should clearly
present 2 things: how you motivate subscribers to 1) stick with you, and 2) buy other offerings from you.
work diligently to grow average revenue-per-subscriber ideally
to several times your cost of acquisition to make each new subscriber
very profitable in their first year. This will often involve making
smart decisions about new
product development and ongoing
marketing creative so that you have a steady stream of new
things to offer them as well as fresh, new ways to motivate them
to give you additional revenues. So much of subscription model
success is about the subsequent transactions you win from
subscribers AFTER the first one. We are generally able
to help companies achieve 3-6+ times their initial cost of acquisition
with smart upsell & cross-selling solutions.
One (lone) product models are often capped (upside revenue) models.
Similarly, models that try to use the same old, tired marketing over
and over are boring to a high opportunity cost fault. Good, fast
growth models have new products and new messaging steadily developed
to both woo prospects to become new subscribers and motivate a higher
quality of customer as measured by revenue-per-subscriber.
make every effort to keep as many subscribers as possible. A common metaphor used in this business model is the leaky bucket. Some companies get overly focused on pouring new customers into the top of the bucket and ignore the growing holes in the bottom. There always comes a point when even the biggest marketing budget cannot pour enough new buyers into the top to compensate for the volume of subscribers being leaked away.
Efforts to save every sale is of paramount importance as it is much
cheaper to keep a subscriber than replace them. Some holes cannot
be plugged (for instance, when a subscriber dies there is nothing
you can do to motivate them to remain a subscriber). However, many
leaky buckets have holes you can close or significantly shrink by
simply choosing to do so (though it is always surprising how often even very successful subscription business entrepreneurs
don't maximize this particular opportunity).
Key is doing the work to understand what motivates cancels & expires. Is it product quality? Is it an expectation gap between what the marketing promised and what they actually get? Is it a competition-driven issue? Packaging? Pricing? Delivery? Etc. Great, ongoing market research- like our collective brilliance model- can help you do this exceptionally well.
establish a marketing model that consistently casts new lines in fresh ponds in search of new sources of profitable buyers. Each of those lines should be baited with some fresh creative being tested against established (proven) "control" creative. The biggest finds will only be realized if most of this work is considered a failed test. What???
You can't get big returns without taking some bigger risks. No one
finds massive pools of new business without suffering through some
failures along the way. If you demand failure-free prospecting
in your business you are unlikely to find any major new sources
of subscribers (those in charge of your prospecting won't be able
to take the necessary chances). Had Edison insisted a lone try
at the light bulb succeed you might be reading this on a piece
of parchment via candle light. Too many entrepreneurs make the mistake
of expecting every marketing test to be a winner; even world class
marketers with relatively endless resources and deeper pockets than your company (like P&G and Apple) roll out flops some of the time. Reward requires risk. Big rewards requires bigger risks.
You want to keep up with trends and many other
factors that can affect your prospect pool. Your lead streams are
tomorrow's paying subscribers- the better you can understand them,
the easier it becomes to motivate some of them to become newstarts.
All subscription models must evolve with the times, changing trends
and the overall market. Too many models get locked into old ways
of doing things which always limits their full potential to how
well something that worked 5, 10 or 20+ years ago can still yield
today. An eager willingness to change with the times is crucial
to growing- instead of just trying to maintain- this kind of business.
When Netflix launched it was a DVD subscription business; now an
ever-increasing amount of its revenue is attributed to digital
streaming. Eventually, the DVD rental business will decline away
to generating next to nothing in subscriber revenues. If Netflix
clung to what worked back at its beginning, it would eventually
work its way right out of business. Regularly evolve and you can
prosper. Clinging to the old ways- even if they were once THE ways-
leads to stagnation & decline. If you think you may have been clinging, we can help you step back out front.
Etc. (there are many more than this small sampling)
First Year Subscription Business Pains Give Way to Second Year Wow Growth
In general, the first year of a new startup is the hardest. Why?
You have no upsell or renewal revenues from existing customers (because you have no existing customers yet).
You have an unoptimized business model (because
it's brand new) so typical industry costs will probably be a bit
higher and typical industry ROIs will probably be a bit lower in
year one. Only time and measured testing through quality marketing execution gets any new model optimized
to industry norms.
Your website is not indexed or ranked for a chunk
of the year. It's almost (search engine) invisible to global prospects
that would be interested in your offerings. Imagine opening a retail
store in the middle of nowhere and not telling anyone how to find
it. That's a good analogy of how it is until the majors index your
site. There are ways to accelerate this visibility; otherwise, it can sometimes take several months before even some of the majors index your website.
Etc. (there are many more)
Things evolve for the (much) better by year 2+...
All the business establishment stuff is history;
you don't have to create the business fundamentals again in year
You should have a building database(s) of leads
and (paid) subscribers which can be leveraged to reduce list rental
expenses. More simply, you can do some list swaps instead of having
to pay all cash for good lead sources. You can even make surprisingly
good money by discreetly renting your list.
You should have producing upsell and renewal models...
both of which involve much less expense than new acquisition marketing.
They yield very high-margin cash (some of which you might use to further ramp up new acquisition).
After testing and measuring through several campaigns
and developing a good marketing rhythm, your marketing model should
be considerably more optimized than where it started. By this point,
you should also have a fairly strong base of more proven promotional creative
and be well aware of a great selection of lists to promote again. All this really adds to your profit potential: optimization expands your margins.
Your well-established website should be fully indexed
and ranked on all of the major search engines providing a no-cost
flow of interested prospects and customers.
Basically, many very lucrative business lifts begin to show up later in year one. Many of these continue to improve throughout year two+ as your knowledge grows and the various models are further refined toward optimal performance.
Again, Big Innovations principals are deeply experienced in all facets of subscription business models at both the strategic and nitty gritty levels. We doubt you could find any other subscription model consulting help with a richer base of knowledge on how to structure a new subscription business startup in the best possible way. Contact us for a free consultation.