Episode 001 - What is a subscription business model?
What, exactly is recurring revenue?
In this first episode of the brand NEW Wham! Bam! Business Plan! podcast, we’re going to be talking all about what having a subscription business model IS and how this type of revenue can move your business into the new age of an online business.
So before we begin, just a quick reminder. This show is brought to you by the Wham! Bam! Business Plan! membership site for subscription revenue, a success path and community that will help you go from a one-time payment system to a monthly dependable subscription business model without the tech headaches.
So guys, since this is the very first episode, I just wanted to go over a little bit of the basics. So if you guys are listening to me in your car, on your treadmill, on your walk, whatever you’re doing, then welcome to the podcast. If you are watching this on the blog, YouTube, or even reading along…WOOT!!! I’m SO stoked for our new adventure together!!
I’ve been listening to podcasts for years. I’ve been participating in podcasts for years (I was recently featured on the Membership Guy’s podcast “Behind the Membership”…definitely check it out after we are done here!), but I have never hosted my own. Soooo this is a little bit of a dream come true. If you guys are more into video, we are also uploading the video of each podcast into YouTube and also into the show notes area.
So, at the end of this episode, I will be providing you guys with the show notes where you guys can grab the audio downloads, the videos, the freebies, all of that good stuff. All SORTSA fun stuff which is gonna be available for every single episode. So without further ado, and with that all being said, let’s jump into the actual episode.
If you guys are unfamiliar with Uncork Your Dork, I primarily teach on subscription revenue. When you go to the blog or you go to the website, you will find a lot of information on just basic business upkeep and creation. But for the most part, I try to teach primarily on the subscription business model.
So, how does recurring revenue impact your life (and business) right now?
Well, first off, I can guarantee right now that you probably have a lot of subscription revenue in your life. Subscription revenue could be anything from, Netflix, heat for your home…or it could be a membership site that you’re a part of!
**Raise your hand if you are a box addict**
I dare you to go through your entire credit card bill and you take a look at your statements. Know what you’ll see?? You’ll see AT LEAST, bare minimum, that 25% of what you paid to people is going to be some sort of recurring revenue.
A revenue that automatically happens for those businesses every single month. Now I want you to think about what that means. What that would mean for YOUR business.
Generally speaking, most people in my field, who I talk to daily and who I can relate to, are those people who are trying to launch courses and ebooks or one time events.
So what happens, is they are spending one to three months building up this huge launch. They spend one to three months really focusing on Facebook ads and marketing and getting as many people on their email list as possible.
After ALL of that work, when it comes time to launch, there’s STILL a 50/50 chance the launch with fall flat on it’s face! (A failed launch for a big time blogger can ge JUST as detrimental as one for a new blogger…sometimes WORSE!)
For example, if you have a big wig who has successful launch after successful launch, and then they have an email glitch or they have a button that was coded incorrectly, they can lose out on thousands of dollars in sales.
That’s thousands of dollars that won’t be going back into their business and into their marketing! So even the professionals, even the guys that have been launching successfully for years have terrible launches.
So what does this mean for the average Joe or Jane? That means that for most of us who are not those big wig launchers, we can launch something and it’s either going to be amazing or it’s going to flop completely. There is no gray area. I’m not going to lie…a few years ago I was getting sick of this.
So…quick story. About a year and a half ago, I actually got an eviction notice on my door because I was having one of those months where I just couldn’t make any income. I think I’d made like $600 that month. (BTW, my rent was like $2,500 because we are still living in the same apartment that we had been living in when we had 9-5 jobs. LORD, it’s been a long few years.)
So the day finally came where I got that eviction notice on my door. And by the way, my apartment loves me. I’ve been here for six years. I generally pay on time or early. So, the fact that they were having to give me this eviction notice really, REALLY sucked. But I got an eviction notice. I panicked. I went grey. They said you have…I think it was like 10 days to pay.
I honestly spent the first day just kind rocking back and forth. I generally try to be an upstanding person, but this sucked soooooooo hard. I basically spent the first day kind of wasting time, kind of panicking. Finally, like rallying people DO… I thought, okay, well I can’t sit here in my depression soup. I need to be doing something. I need to take some sort of a step forward.
SO my next step forward was to pour through all of my accounts and just kill anything that was going to surprise me over the next couple of days. I didn’t want to, on top of having to figure out this eviction notice thing, start getting pinged saying that this tool just charged me 50 bucks or 100 bucks.
i was poor as hell and every penny counted!
As I was killing accounts, I realized that pretty much 75% of everything that was on there was a recurring charge. It was something that I could pause or something that I knew was going to be back again next month. I was killing things like other membership sites, tools social media, like Iconosquare and MeetEdgar. Some of these things were easy to delete, and some of them were, I was pretty sure I needed in my business IF my business was going to continue on.
As I was killing everything, I started thinking “these guys are getting my money and they know they’re going to get my money every single month”.
“These, these guys are getting recurring charges every single month.”
“Why can’t I create something like that?”
And so I started thinking, “Okay…if I can have a launch and get 15 people to sign up for my $20 membership, then I MIGHT be close to being okay.”
There’s a saying in small business. You’ll take as much time as you give yourself.
Launching a membership site CAN be really time intensive, but because I didn’t HAVE that time…I made a plan to launch my membership in just a few days. Usually, when I get these frenzied ideas, I find out down the line that they don’t quite work out the way I thought they would. But in this case…it did. It did to the extent that my life AND my business was changed.
There are learning moments in life…and one thing that I learned in THIS instance, was that memberships and community are something that I can easily do. I also learned (in retrospect) that I ended up doing this the hard way. Lucky for everyone else…I’ve since learned that there’s an easier way to create recurring revenue! THAT is what I teach inside of the membership and on the blog. That’s what I’ll be teaching on the Podcast.
But more than both of those things…I learned that JUST DOING IT makes ALL the difference. Good on ya, Nike. Whether you’re dragging your feet on a project you’ve been stewing over…or you’re in a timed predicament like I was, making excuses or panicking will do NOTHING for you. Pinpoint your problem…and start working towards your solution.
The membership site I created, in the beginning, looks worlds different now. In 48 hours, I had put together every course, and video I’d ever created. Since then, we’ve added in a success path, events, and courses to help folks do EXACTLY what I did two years ago.
I didn’t quite know what the membership site was going to be about.
I didn’t know how things needed to connect.
I didn’t know how people were going to navigate the site.
I was just like, “RIGHT, I need to make rent. How am I going to do this?”
I DID know, however, that I wanted to keep it going in the future. I knew that this wasn’t just a one-time thing to help me try to get a surge of income. That was never the goal.
The goal has always been to start it, pay my rent, and then figure out how to make it better and make it grow. Goal status…success.
"More than anything...I learned that "just doing it" makes all the difference. Good on ya, Nike."
so basically, what is a subscription business model?
A subscription business model is simply offering somebody a product that they subscribe monthly, quarterly or yearly to. They can pause, they can cancel it anytime. No contracts. No promises. (Unless they buy a year access at time…totes legit.) . Each month, the subscription renews and the payment is automatically made.
This is NOT a system that you pay off like a course. For example, maybe you’ve joined one or two courses…and instead of paying that $2,000 for a one-time payment, you decided to pay in monthly increments. You pay $200 a month or $100 a month until that full cost is fully paid off.
Yes…that payment happens every month, but that is not a recurring revenue, primarily because that has an end date.
Recurring revenue is revenue that happens every single month without an end date. I know a lot of people tend to think that recurring revenue is a membership site. They would be correct. Recurring revenue CAN BE a membership site, but a membership site is just one type of recurring revenue.
Another type of recurring revenue might be creating a mastermind group, or it might be creating a paid newsletter, or a digital stock pack that’s automatically delivered every single month. It can be as simple as you want or it can be as complex as you want.
simple vs. complex revenue
Speaking of that, I wanted to talk a little bit about simple versus complex revenue. There are two kinds of recurring revenue streams. A simple recurring revenue stream is something along the lines of, paid newsletters, maybe a paid community stock packs, automatic coaching, swipe files. I’m simple snail mail or monthly events.
You can LITERALLY launch these simple recurring revenue streams with very little planning. For example, with a stock pack, if you’re a photographer or an artist, all you need to get started is an online delivery system (think WordPress or even Gumroad!), a sales page, and your first 5-10 images/png’s!
Yes…it WILL take work, but not the intense planning a complex subscription business model might take!
A complex stream is going to be something that actually takes the planning and time. (Although keep in mind, I launched my membership in just a few days!)
A complex stream is going to be something a bit more planned. So mastermind groups, membership sites, box subscriptions, software as a service, magazines, etc. These are all things that you will have to create and plan out. You’ll spend time planning content, launches, and monthly events. In addition, a more complex subscription business model TENDS to center around some kind of community. So there will be a certain type of upkeep.
I actually LOVE both of these types of recurring revenue, so I’m not saying that I like a simple stream over a complex stream more. It just depends on how you run your business and what you need for growth! (I love having a membership…since I HATE launching courses! I can simply keep putting my courses and content in the membership and focus on promoting one product in my business.)
One more thing to understand about complex subscriptions is that they will PROBABLY become central to your business. It might not be the most expensive (right now, the membership is only $39 a month!) but chances are it will be your primary source of income and promotion.
Before you jump into your recurring revenue, you need to sit down and take a look at your business. You need to figure out how much time you want to devote to this product. I personally recommend setting aside a large chunk, even if you’re going to be launching a simple stream. Even if it’s just a paid newsletter, automatic coaching, or a monthly event, you should put aside a good chunk of your marketing for it.
I’m telling you now, you’re going to find really quickly that recurring revenue is what keeps your business afloat. Once you have figured out that bottom line and you can just GROW that bottom line, you’re going to want to put all of your energy into the thing you can grow…instead of start fresh with every month.
If you focus on a recurring revenue, that means you’re going to be able to spend more time doing what you love. You’re gonna be able to spend more time focusing and creating those courses and marketing plans.
If you’re going to create any kind of a subscription product, you need to automatically put your mind in the mindset that this is going to be a NEW focus. This is going to be the focus for what you do.
Having these recurring revenue streams in place means you can focus GROWTH…not simply starting over from scratch every single month.
PS…I did not get evicted by the way. I’m still living in the same apartment and they still love me. We’ve worked HARD over the last two years, and we now have over 200 members. I went from making $1,000 maybe in a month to generating (automatically) over $9,000 with my membership site monthly. So it is definitely, definitely doable and it does pick up speed if you do it the right way
This is going to sound counterintuitive to what I was saying a bit ago, DON’T DO IT FOR THE MONEY! If you do it for your members and the organization and sanity of your business…then creating a subscription product and community will serve you well.
Thank you SO much for joining me guys!!! I can’t wait to see you in next week’s podcast!!! We’ll be chatting all about “Marketing Tactics for Attracting Subscription Customers.” If you’re on the blog, be sure to check the links below for the full transcript, Membership info and more!
Also, if you LOVE what you’re hearing on the Podcast, be sure to hit that subscribe button and leave a review on iTunes!