3 Things When Considering a Subscription Pricing Model

Joseph Stafford Business, Cash Flow, Expenses, MRR, Pricing Model, Products, Selling, Subscription Pricing Leave a Comment

Subscription models are all the rage. You can get almost anything delivered to your home or business now for a monthly charge. I previously wrote about the Dollar Shave Club and how it upended an industry and ultimately sold for a cool $1 billion. Here are 3 reasons to consider a subscription model. 1. Loyalty-Customers that purchase items on a subscription basis tend to be more loyal if they are locked into a subscription. They will be less likely to jump ship for a cheaper offer, especially if they are offered special offers throughout the subscription. 2. Cash Flow-Let's not forget about this. Customers are often willing to pay in advance for subscriptions which greatly improves the cash flow of a business. 3. Valuation-Businesses that adopt a subscription model sell for more (possibly a multiple of revenue rather than earnings) than their competitors that do not have a similar offering. There are many ways to convert your existing products to a subscription model. Be creative and repackage your product offering. Customers may end up purchasing more!

About the Author

Joseph Stafford

Mr. Stafford is a founder at Trinity Business Advisors and is responsible for product and practice development as well as sales and marketing activities for the firm. He is a graduate of California State University Fullerton with degrees in accounting and economics and a Certified Public Accountant in the state of California. He is an Expert in Residence at The Cove at UCI and at Connect/Springboard and is a Certified Mergers and Acquisition Adviser.

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