Did someone say subscription?

With the subscription revenue model easily incorporated into a growing number of industry verticals, this approach should be a key component of every business.

The health and fitness industry has been dominating the subscription economy for more than 20 years, with lessons learnt from membership management in health and fitness now forming essential elements of managing subscription based customers in other industry verticals.

At DFC, we’ve seen significant growth in the subscription revenue model being applied to multiple industries.  Many a millionaire has been borne by offering the right product at the right price point on subscription – and here are some of the common trends embraced along the way:

Look after them

Once you have a subscriber make sure you have a process in place to engage that customer and add value to their commitment.  Simply getting the signature is not enough – your organisation must consistently deliver value and communication to that subscriber.  This includes reminding them what they get (and others don’t get), making them feel part of your organisation by inviting them to member only events, and offering membership only deals.

Adjust commission models

Be willing to pay commission to your sales people when they acquire a subscriber or member!  Many potential success stories fail because a sales manager will only pay commission on paid-in-full sales, rather than a subscriber.  An ideal commission model in this space is structured so that a proportion of the recurring payment goes to the representative as a commission for the lifetime of that subscriber.  The result has a double benefit – you retain the employee longer and they continue to nurture that customer in the process.

Loss leaders work

A successful method of subscriber acquisition is offering good or services prior to the initial subscription payment taking place.  Many software companies offer free trials, product delivery companies send free product to try, and some cleaning companies will even clean your house for free to gain a recurring payment commitment.  Be prepared to take a small hit to allow your potential subscriber to dip their toe in the water.

Have options

Subscription models are not for every consumer so make sure you have pay-in-full options for those who prefer to pay that way.

Always full service payments

Always use a full service payment processor who will manage expired credit cards, missed payments,  cancellations,  and renewals – or you’ll very quickly find yourself running the business rather than growing it.

Remember that 25% of customers will have payment issues at some point and without a full service provider the business owner has to manage these issues.  And there’s nothing worse than losing a customer due to something as simple as an expired credit card.

Lower the barriers to entry

Whether it be a high price point, restrictive contractual terms or a lack of flexibility in the options, simple models are key.  Many small complexities add up and can make a subscription feel more like obtaining a mortgage, so the least amount of sign up friction the better and the more members you’ll get.



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