These days it seems like you can get anything on a subscription basis, from razor blades to entertainment. This is the popular business model choice for Netflix, Amazon, and even Microsoft. So I decided to read up on it to see how this would fit with my current company.
I am currently reading “The Automatic Customer: Creating a Subscription Business in Any Industry” by John Warrillow. Warrillow is the author of “Built to Sell” and also owns his own subscription company, SellabilityScore.com.
So what is a Subscription Business? Instead of selling multiple items each at one time for a single cost you sell a monthly or yearly subscription where the customer can access the multiple items numerous times.
What makes this better for the business? It creates a recurring customer base and a steadier recurring revenue. It also allows insight into your customer and needs that you wouldn’t normally get.
In the Automatic Customer Warrillow lists nine subscription models that you can incorporate into any business type. He gives examples of companies that currently use those models and how they can be used in various businesses.
Overall I found the book to be very helpful. It not only tells you how to set up a subscription business but how to calculate the cost of it if you are transitioning your business. It gives equations you can use to calculate the Lifetime Value, Consumer Acquisition Cost, and the Monthly Recurring Revenue.
The book gives you that basics on running a subscription business but if you are looking as to how you can acquire subscribers, set up a subscription company, or acquire a mass library like Netflix you’ll have to seek that information elsewhere.
Which is why my next book review will be “Netfilxed: The Epic Battle for America’s Eyeballs”. I’ll let you know how that goes.