How to Leverage 9 Recurring Revenue Business Models

Do you have the peace of mind from owning a recurring revenue business model that brings you a minimum amount of money each month with a subscription product?

If you’re like most of my clients when they come to me, the answer is no.

Cash flow is a major dilemma in a service based business. We have good months and bad months which makes budgeting and predicting our income is extremely challenging.

You have recurring expenses each month, so why not add recurring revenue too?

If you’re a business owner who is marketing online, you’re most likely paying for many, if not all, of the services below:

  • Internet
  • Cell Phone
  • Email Service Providers
  • Online Scheduler
  • Website Hosting
  • Domain Name Renewals
  • Website Maintenance & Security
  • Photographs & Marketing Materials
  • Computer Software
  • Cloud Storage
  • Mileage
  • Office Supplies
  • Postage
  • And maybe even Advertising Costs, Rent, Shipping, Packaging Supplies, Product Fulfillment, Insurance, etc.

Bills come in every month, steadily like the waves in the ocean without an end in sight. Sometimes the waves are small, sometimes they’re bigger. But the one thing you can count on, is that if you keep using the service, the payments will keep needing to be made.

Knowing that you’re financially in the hole each month and need to earn $ X  amount to just break even can be frightening. Plus many business owners don’t know where their next client (paycheck) is coming from because they lack a highly converting lead generation funnel and solid marketing strategy.

Not having predictable recurring income is the perfect recipe for stress & sleepless nights.

I’ve been there. This past summer, in fact.

For the first year in my business, I focused 100% on creating websites for coaches & consultants. I’d market, get a few clients, fill my calendar, and get busy and stop marketing. Then I’d finish the work and freak out because I didn’t have more work lined up. I wasn’t marketing consistently and every content delay that delayed my paycheck threw me into a financial tailspin. Plus I started every month with a big fat ZERO in my income column even though I had a big fat scary number in the expenses column of my balance sheet.

TheAutomaticCustomerThat’s when I read The Automatic Customer by John Warrillow. The book teaches readers how to create a steady flow of repeat customers (automatic customers) who pay month after month.

Creating My Own Monthly Recurring Revenue (MRR) System:

I began offering website maintenance & security as an option to every website proposal I sent out. I didn’t see it as a necessity before because it was something I could easily do for myself, but after building a new site for a client who came to me because her site was hacked I realized it was a major point of friction for business owners.

Adding this subscription website maintenance service created a perfect win/win for my clients and myself. My clients have the peace of mind and ability to focus on their business knowing that I’ve got their back when it comes to their website technicalities. I get the peace of mind knowing that I have a certain amount of income coming in each month, regardless of any new clients who may come in.

What a difference a year makes! Creating a recurring revenue business model has completely changed my business. I am now choosing the projects that sound most fun to me, serving my clients on a much higher level, and I’ve eliminated the cash flow ups and downs.

How to Leverage the 9 Subscription Business Models for Online Businesses:

In The Automatic Customer, John Warrillow talks about the 9 Subscription Models. (You can download his printable here.) I’ve summarized them below and given you suggestions for recurring revenue business ideas to help you implement them in your business.

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1. The Network Model

(Cable TV, Internet, Cell Phone)

This type of subscription model works best for businesses where the service/product improves with the number of subscribers who join. As the business grows the members also benefit.

This is perfect for businesses like…

  • Social networking communities
  • Co-ops
  • Businesses leveraging crowd funding

Surprise-Box2. The Surprise Box Model

(Examples: Tinker Crate & BirchBox)

This model works great for anyone who sells a physical product. It also works well for home-based business owners who are building a direct sales or network marketing business! Parties & presentations aren’t the only way to grow your biz – think outside the box!

  • Skin care subscriptions
  • Jewelry designs of the month
  • Candles of the month club
  • Makeup product of the month
  • Gifts for a year (Birthday, Valentine’s Day, Easter, Mothers/Father’s Day, Christmas)
  • Nutrition products auto ship
  • “I ♥ You” Care packages for students away at school or out of town grandchildren

All-You-Can-Eat3. The All You Can Eat Library Model

(Netflix & Amazon Prime Video)

Are you a master at creating content? Create a library of content behind a login screen and build a membership that allows people to access it. This would be perfect for…

  • Photographers who provide stock photos for use in blogs & social content
  • Graphic designers who create pretty quote images for Instagram
  • Health coaches who own a large library of recipes
  • Personal trainers who have built a library of workout videos
  • Financial planners who have a library of spreadsheet templates and worksheets
  • Energy healers who offer guided meditation recordings

Private-Club4. Private Club Model

(Gym Membership & Country Club)

Have you been thinking about creating a private Facebook or Linked In group? How about a private membership community on your website? If you vet your community well, your members will add as much value as you do. This is a great add-on to a training program as well!

  • Create mastermind groups and group coaching packages
  • Build private communities on Facebook and Linked In

5. The Front of the Line Subscription Model

(Airline Credit Cards, Savers Cards at Local Grocery Stores)

This type of membership offers extra services, discounts, or priority to subscribers. An example would be the priority boarding on airplanes for frequent flyers or card holders. This could be used in any business for your best clients. Just be sure to make the offer exclusive to your VIPs to keep it enticing.

  • Offer exclusive services/products/features only to VIP subscribers
  • Give subscribers priority such as in scheduling, seating, early bird access, etc.
  • Allow more access to you personally for higher paying subscribers

membership-recurring-revenue6. Membership Website Model

(Udemy, Teachable, Skillshare)

If you’ve taken an online training course you’ve likely experienced the membership website model. The membership subscription model is similar but provides ongoing access to member information with a recurring fee. Some membership subscriptions “drip” content modules on a schedule so that subscribers are enticed to stay. This works excellent for Business to Business and Business to Consumer information and is perfect if you…

  • Teach a skill to your audience
  • Have an online training course with videos/written content/or audios
  • Create digital resources that you only share with subscribers
  • Offer 30-day challenges, etc.
  • Host recurring events, webinars, conference calls, etc.

Simplifier7. The Simplifier Model

(House Cleaning, Home Maintenance, Personal Shopper, Bookkeeping Services)

How can you make your client’s life and business easier? If you can simplify a process for them, or take something off their plate on a regular basis, you have a perfect simplifer subscription product. For example, I offer website maintenance packages that include time each month to clients who want help adding, scheduling, and optimizing blog posts for the search engines, as well as making minor changes to their website. That way they can focus on their clients.

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Peace-of-Mind8. The Peace of Mind Model

(Website Maintenance & Security,  Home Security Systems, Cloud Backup)

The peace of mind subscription model is perfect to keep your clients from having to “worry” about things that could cause them stress or loss.

If I could pay for peace of mind to know that my daughters will return home safely when they take the car for the evening or my son won’t get hurt trying whatever new stunt he’s dreamed up, I’d be the first in line to subscribe.

The peace of mind subscription model would work great for a business that…

Consumable-Product9. Consumable Product Model

Do you offer a service or product that gets used up on a regular basis? There are several that work well with this type of subscription…

  • Photographers offering stylized stock photos (seasonal photos are perfect for this)
  • Marketing coaches who create seasonal marketing campaigns
  • Content creators who can provide ongoing content like blog posts and social media updates
  • Chefs/cooks who can plan weekly menus and shopping lists

What if you don’t have an online business or your business model is mostly local?

You can still create monthly recurring revenue by offering subscription packages to your clients. It will make their life easier as they won’t have to stop and pay every time they see you. They’ll get a better deal with your package price instead of paying a la carte. You’ll likely be able to help them get better results if you work with them ongoing. And you’ll deepen relationships with your clients and stay top of mind for referrals.

Some types of local businesses who could thrive with monthly subscription packages:

  • Rental property
  • Dry cleaners
  • House cleaners
  • Massage therapists
  • Personal trainers
  • Aquarium maintenance
  • Music teachers
  • Tutors
  • Car wash
  • Hair stylists
  • Energy healers
  • Chiropractors
  • Day care providers
  • Exterminators
  • Landscapers
  • Tree trimmers
  • Pet clean up
  • Pet Sitters
  • Dog walkers
  • Restaurant (take & bake weeknight meals)

I’m convinced there are ways to create recurring revenue for ANY business, especially service based businesses.

Has this given you an idea for a recurring revenue model you can add to your business?

Want help with the technical side of setting it up? There are lots of options for creating recurring income with a membership site, learning management system, or subscription shopping cart. Let’s talk about your subscription idea and see what it would take to make it happen!

Schedule a Free Strategy Session Here!

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