Is your business ripe for subscription income?

I’d love to say that when it came to technology or business predictions, this blog always got it right.

But that would be stretching the truth somewhat.

Like when I worked for a big telco and completely missed the significance of ‘devices’ — which happened to become the biggest thing since the internet itself, as companies like Apple would be keen to attest to.

But some predictions it does get right. Such as the rapid growth of the subscription business model, as enabled by the internet.

We’ve been banging on about the opportunities the subscription business model provides small business for many years now.

Subscribe to almost anything

And these days almost anything can be purchased as a subscription. Music, food, beverage, travel and even fashion have all experimented with the ‘rivers of gold’ that subscriptions revenues can provide.

They join the subscription mainstays of content, telecommunications, utilities and gymnasiums in tapping into the reliability and robustness of a business model that is small enough to be affordable but over time can build into significant earnings.

Even if you do offer one of these traditional subscription services, the cost of doing business in this way has reduced significantly.

The reason for the increase in the uptake of this often lucrative business model is yet again the enabling powers of the internet.

The internet provides three key attributes that were previously only within reach of large corporations: low cost activation, promotion and direct debit capabilities.

1. Activation

‘Activation’ is industry jargon for ‘signing up’. In the past, you needed call centres or processing teams to turn your application and cheque into a self-sustaining regular billing model.

These days you can get activation technology via an e-commerce website for less than $50 a month plus the setup of your creative and content. That’s a small price to pay to commence what could be a long lasting business relationship with your customer.

2. Promotion

In the past it was relatively expensive to promote your subscription offering, as it usually depended on high cost mass advertising to get it out to your target market.

Nowadays, ‘pay per click’ advertising, search engine optimisation, email marketing and social media can all be used to promote your subscription product at much lower entry levels than ever before.

3. Direct debit facilities

In the past you needed special arrangements with the bank and a considerable amount of processing to arrange automatic direct debit capabilities with customers.

These days, a free Paypal account can achieve the same result and even when processed manually, online banking smooths what in the past was a cumbersome process.

What will you offer?

Really the biggest impediment to running a subscription business model these days is coming up with a compelling package of benefits in what is becoming a competitive market for your subscription dollar.

Then it’s a matter of ensuring your offering is sustainable. There’s no point getting six months into your subscription only to find that you are running out of things to provide.

But when you do, you will join the thousands of businesses that enjoy the security and income that the regular and seamless direct debits provide.

The businesses that are best placed to tap into this model are those that already offer a fixed priced item that can be re-fashioned into regular, more bite-sized components.

Intellectual property based services like training, consulting, content and other services lend themselves particularly well to this approach.

Is your business ripe for subscription income?

Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on TwitterFacebookLinkedIn and Instagram.


Notify of
Inline Feedbacks
View all comments
SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Forgot your password?

Want some assistance?

Contact us on: or call the hotline: +61 (03) 8623 9900.