5 More Subscription Models for Your Business

recurrring revenue value building Nov 12, 2019

In this episode, I cover five more subscription business models that might fit your business...


  • “Have you ever had those nights when you lie in bed, you’re tossing and turning, and it’s three o’clock in the morning, and you’re thinking to yourself — How am I going to make payroll?… A subscription business model can help you ”

  • In this episode, I explore the first of five more subscription models that you can adapt to fit your business, including:

    • The Surprise Box Model

    • The Peace of Mind Model

    • The Simplifier Model

    • The Consumables Model

    • The Network Model

  • To learn more about subscription business models, read John Warrillow: The Automatic Customer


[The following is the transcript of this video. Please note that this episode, like all posts, features Jean speaking unscripted and unedited — filmed in one take. The actual video may differ in content from the script. But you’ll still get loads of value!]

Hey everybody it's Jean Moncrieff. And welcome to this episode.

In the past couple of episodes, I’ve spoken a lot about subscription business models. And during the last episode, I covered four different subscription business models. We talked about the All-You-Can-Eat Library model. We talked about the Front-of-Line model, the Membership Website model, and the Private Club model.

Now before we get into the next five subscription models, I want to remind you why subscription business models are so important.

Have you ever had those nights when you lie in bed, you’re tossing and turning, and it’s three o’clock in the morning, and you’re thinking to yourself — How am I going to make payroll? How am I going to get through this month? I have to get on the phone tomorrow and chase those invoices. I’ve got to get money in the bank, got to make the payroll, can’t let people down –, and that weighs heavy on you.

When you embarked on your entrepreneurial journey, I bet your dreamt of the independence and freedom it would bring. Instead, you find yourself held captive in your business.

You’re not alone. Many owners find themselves in a position, chasing money month to month. You probably hate the beginning of the new month because all your sales dials reset and think to yourself: ‘How on earth am I going to make enough money to cover overheads in the month?’.

A subscription business model can help you change all that. And the reason is, it gives you a stream of annuity, recurring revenue.

So today we’ll go through another five models. My hope is you can identify one model from today or from the previous episode, or a combination of those models to fit your business. And that model may not match exactly. Perhaps it only fits a part of your business. You might need to mold it to your business a bit — but once in place, you can start building a stream of annuity income that throws off revenue and profit well into the future.

And what does that give you? Well, it gives you the freedom to take a break or go on a vacation. If your health takes a turn for the worse, to be able to take time off knowing that there’s an excellent stable stream of revenue to your business. If you decide to sell or if a buyer comes along, having that annuity income, having that subscription model in part of your business makes your business a lot more valuable.

So let’s get straight into it.

1. The Surprise Box Model

Number one, the surprise box model. The surprise box model involves shipping out a curated package of goodies, every single month or whatever the period is. Here’s an example. Did you ever join one of those wine clubs? They’d ship you over a box of wines; you chose white wine or red wine, and the wine is delivered to you every month. And when you open up the box, some of it's just not drinkable stuff. Other bottles are really good and maybe place an order for some extra bottles, which is the Trojan horse effect –you enjoy some of the samples and decide to buy more.

This model works really well where you have strong existing relationships with manufacturers and suppliers, and you can get good discounts.

Another two examples in the space — for all of the doggy parents out there is BarkBox. BarkBox charges $22 a month, and subscribers can choose a themed box of toys and treats that are shipped over to Fido every month.

Then there’s StitchFix who will connect you with a style consultant, talk to you about your fashion preferences, and for a few dollars a month, ship you a box of clothes. You can receive a box of fashion every two to three weeks or every two to three months. It all depends on how often you want to upgrade your style.

When you receive a box from StichFix, you open it up — what’ve I got today? Pull out jerseys, jean’s shoes, whatever comes in the box — and you compare them to what’s in your wardrobe, what fits, what doesn’t fit, decide what you want to keep, send back the rest, and pay for what you keep.

So those are all ideas around the surprise box model. I encourage you to think about that model and how it might apply in your business.

2. The Peace-of-Mind Model

So in the peace-of-mind model, you’re offering customers some form of insurance that if something goes wrong, you’re there to help out.

In this model, we’re talking about roofing contractors, dog monitors…

Take Whistle for example. monitors your pet’s health and location. So if something happens to your pet, they will jump in action, and help find your dog. Up until that point, they’re merely collecting subscription revenue. In this model, you only start consuming resources when something goes wrong, and you need to mobilize resources.

If you’re a roofing contractor, you have a database of customers, and you can estimate out how often your customers need to have roofing work done. Once you know that, you can start putting together a subscription model. And only when there is an incident, that is, something needs to be fixed, do you mobilize your repair team.

If you already have the assets and resources, and you’re only really picking up the cost of materials. So, for all you roofing contractors out there, how you might apply something like that to your business.

Another one that I use personally love is Thriva. They’re a company that monitors my health by doing blood work for me. Every three months they send me a kit, and I give a blood sample –– poke two fingers, squeeze some blood out. Then I zip up the samples in a bag and send them off to the lab. Within two days, my results are up online, and I have peace of mind that I’m not in line for any unpleasant health surprises. The results help me think about, ‘Is there something I need to look after? Is there something I can do about my energy levels? Can I be more energetic for these episodes with you? — so peace of mind for me around my health.

3. The Simplifier Model

So the simplifier model is simple.

We all live very busy lives, in this model, you offer to take one or more recurring tasks off your customers’ to-do lists.

The software industry was quick to jump onto this one. You have things like Todoist and Toggl for recording your time and managing your to-do list, and you pay a fee… Some of them start for free, and then you start paying a monthly amount to use their service.

To some extent, password management tools fit the model too. Aside from giving me peace-of-mind when it comes to security, I don’t want to keep having to look for passwords. I really find it convenient that I can press a button, and my password is automatically entered, and I can just get on with what I’m doing.

Other opportunities for this model exist in numerous service businesses. Going back to our doggy parent example. Take the doggy grooming business — the van arrives, you take your dog to the folks at the van, and they trim and wash your dog, perhaps brush his or her teeth and hand Fido back to you. As the doggy parent, it means that you haven’t had to get into your car, drive down to the parlor. The parlor comes to you.

Bookkeeping, accounting firms also lend themselves to this model. If you know your customer's business, you know how much work goes into running their accounts books. You know, how much work is involved in doing tax returns and annual statements.

So instead of hitting them with a big bill at the end of the year or at specific periods, smooth out your income stream with a subscription model — perhaps a hundred dollars or a hundred pounds a month, depending on the volume of transactions.

You’ve helped them plan, and the amount is small enough that they tend not to think about the cost of your services. And they’ve got peace of mind that all the bookkeeping, everything’s done.

From pool maintenance to mosquitoes. The Simplifier Model makes people's lives more manageable. If you live in an area where you have a lot of mosquitoes, The Mosquito Squad will show up and spray year-round, making sure that there are no mosquitoes come summer. So when barbecue time comes, or you’re enjoying cocktails on the patio with friends, you aren’t being eaten alive by mosquitoes.

4. The Consumables Model

In this subscription model, you are offering a subscription to a product that the customer needs to replenish on a regular basis.

I’m thinking of grooming supplies. I have blades and shaving cream that come from a company called Harry’s — Harry’s grooming –, and they send me shaving stuff every three months. Another example, my dishwashing machine tablets. Every month I get a supply of tablets from Smol.

And you might say — well Jean, but Amazon will do that for somebody. I don’t want to compete with Amazon.

Sure they can.

But the reason I use Harry’s and Smol is their customer experience. Smol, the dishwashing tablet folks, care about the environment. And they throw in a quirky little story in the pack of dishwashing tablets I get. Also, I can change the volume of washes, and they’ll adjust my order. I relate to the company, to the brand, they reflect my values.

Similarly with Harry’s. I love the grooming experience, and I enjoy quirky tips on how to shave better, how to groom better. So there’s a kind of relationship between the brand and myself that I enjoy, and that’s the reason I use them over using Amazon.

 So think about your business. Think about whether you got that quirky brand, whether you could supply a product through a subscription model

5. The Network Model

This model goes back to 1878 — when one of the first network models sprang up in New Haven, Connecticut. Twenty-one people started paying $1.50 each for the service. And that service was the telephone. The first subscribers were likely the fire department, the police department, doctors, nurses, and some important folks like the mayor.

And then, because everybody thought the service was remarkable more people subscribed. Inviting people and getting them onto the service increases the usability for everybody. In the case of the telephone subscribers, numbers went from 21 to 50 in just three weeks.

A more recent example — WhatsApp. At one stage, I think WhatsApp was signing up a million new users every single day. One million users a day. That’s because we all had WhatsApp and it was like, $1 a year to use the service, and as I recall it was a more secure messaging platform. Originally WhatsApp was more secure, or all our communications were encrypted or something. There was certainly an advantage, or something remarkable about the WhatsApp service back then. Now it’s just ubiquitous. Everybody’s using it.

We quickly spread the word, telling all our friends about it — join WhatsApp, get onto WhatsApp, use WhatsApp — and quickly more users joined the platform. And now it’s one of the default communication tools we live with.

Another good example is Zipcar. When Zipcar started up, they pursued a density model. Starting in neighborhoods, they would put certain car types in certain areas. Environmentally friendly ones in one area and more upmarket models in another more affluent suburb. At the end of the day, the more people used the cars, the more cars were placed in an area. So as a user of the service, it was beneficial for me to go out and get my friends to join so there were more vehicles. And that still holds true today with companies like Zipcar — I’ve got a zip car around the corner. During the week, it’s always available. On the weekend, not so much. My partner tells me — you should call them and tell them they need to put more cars in our area. The reality is that we need to be telling more people to use the service. And that’s the way Zipcar grows their network model.

So those are the five models I wanted to cover today. I wanted to go through these models with you. I want you to think about how they might apply to your business. Again, the episode from last week, we’ll be getting a link up here, you can click the link, go to that episode, watch that episode.

Find the time. I realize making the change from old to subscription is difficult. But find the time to sit down and to think about how these models might work for your business, how you might apply them, either as they stand or combinations of them.

Remember, when you set out on your entrepreneurial journey, you likely dreamt of freedom. You thought about building a business where you could work to your own schedule. You work with the people you want to work with, and you could work with the clients you want to work with. A subscription model will help you move toward that freedom, helping you create a thriving business.

Looking for more strategies and tactics for building recurring revenue? Don't miss:

And be sure to subscribe to The Freedom Experience podcast for weekly insights into building a valuable business. 


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