This transcript was generated from the episode audio and may contain minor errors.
Should you switch your business to a subscription model? These days, subscriptions have become a hugely popular business model for everything from digital products to physical goods. It offers consistent income if you've got people paying once a month or even once a year and the potential for a long term customer loyalty. But is it the right move for every business? Well, I'll just say right out, it's probably not the right move for every business. But is it the right
move for your business or your side hustle idea? Should you have a subscription? Should you offer that? Should you just sell one off products? Is there some combination? We're going to hear
a question today from Megan in Denver. She is considering transitioning her digital template shop to a subscription model. Let's explore how you might evaluate this change. How do you minimize the risk that's involved and hopefully ensure that the shift would add value for both Megan and her customers. And perhaps you are listeners if you're thinking about your next side hustle or business idea. Should it be a subscription model? Pros, cons, strategies, all coming up in this short
action packed episode. Hi Chris, this is Megan. I've been running a small business selling digital templates for entrepreneurs and it's been going pretty well. Lately, I've been thinking about switching to a subscription model where customers, you know, like pay monthly for access to my entire library instead of just, you know, buying individual items. While the idea of a consistent income is really appealing, I'm like worried about alienating existing customers who prefer one-off purchases or worse, like losing money if subscriptions don't take off. How do you know if
a subscription model is right for my business and how can I transition without risking what I've already built? A subscription model can create steady revenue. A subscription model can be a wonderful thing, but it's also not without risks. So how do you evaluate if it's the right move for your business or your business idea and how do you make that transition smoothly? First of all, understand your audience and their buying habits. Not every customer base is ready or willing to
commit to subscriptions. You want to maybe identify some power users. Are there customers who frequently buy from you? Well, they're the most likely to embrace a subscription. So, you know, it could save them money in the long run and it could be good for you.
But if you can't identify at least, you know, a substantial group of those people, maybe a subscription is not best at this point. You could if, you know, if your audience is divided, you could consider offering both options like a subscription for frequent users and a one-off purchases for casual buyers. But the more complexity you add, the harder it is for people to make decisions. You don't want to overwhelm them with choice fatigue. So I think you want to be careful and cautious. Next point, which relates directly to that is to start small and
test the waters. Maybe you can pilot it with a segment of your products or audience, offer a time limited trial to see how many customers are willing to opt in and stick with it rather than going all in position subscriptions as added value, not a restriction. So it's like, hey, we're not taking something away. We're actually giving you something. We're making it better for you somehow. So you really want to emphasize the benefits. Get unlimited access to the entire
library for just X dollars per month. For example, that's just some messaging you could potentially use. And if you're going to keep one-off purchases, then explain that the subscription is designed for convenience and savings, but is not mandatory. Be clear about what subscribers get. One of the biggest reasons subscription models fail is a lack of perceived value over time. So to keep those subscribers engaged,
you want to make sure you are regularly updating the library in this case with new high quality templates. Maybe you're offering bonuses like tutorials, live Q&A sessions, access to a private community. You just want to kind of keep things fresh so that you reduce your churn rate, which is often a big issue with subscriptions. Last but not least, have a backup plan. If subscriptions don't take off as expected, make sure you can pivot back to your original model or some kind of hybrid version. Just communicate openly with customers so that nobody is blindsided.
It's good for them to feel included. Megan, it sounds like you're asking all the right questions. So I'm wishing you well for the next steps and listeners wishing you well as well. If you've got a question, sidehustleschool.com/questions, continue to feature them throughout the year, along with updates from other listeners as they launch and grow their projects. Hey, thanks so much for being out there. I really appreciate you. My name is Chris Guillebeau. This
is Side Hustle School. From the Onward Project.
