7 Steps to Recurring Revenue
A Proven Path to Freedom, Fun, and Finances
Recurring revenue is all the rage today, but when I launched the Indie Business Network in January 2000, the term didn’t really exist. Up until then, no one had ever led an online business with a recurring revenue model. I actually think I am the first one to do so.
I had no road map. While I didn’t know exactly how I was going to make things happen, I did know exactly what I wanted to make happen. I wanted to make a real difference in the world, and I wanted to be a Lifestyle CEO. When I put those two things together, it was obvious to me that a recurring revenue business model was the way to go.
From these simple intentions, I invoked my passion to help women by offering services that they might pay for on a recurring basis.
While I didn’t know it at the time, I was blazing a new trail. In January 2000, IBN became what I believe is the first online business with a recurring revenue subscription model.In January 2000, IBN became what I believe is the first online business with a recurring revenue business model. #lifestyleceo Click To Tweet
Looking back, the steps I took toward entrepreneurial success based on a recurring revenue business model are crystal clear, and I’m sharing a high level overview of them in this post. I have included personal applications for each step, so you can glimpse where my head was at any given time.
7 Steps to Recurring Revenue
1. Identify your assets, strengths and skill sets
The first thing you’ll need to know is who you are and what you have to offer personally. What are your key strengths? What things come easily to you that are more difficult for others? What are your areas of special expertise? What are people always asking you to help them to do or achieve? Have you authored a book? Do you sell a product that people buy regularly? Are you a mindfulness or fitness expert? What have you learned by way of career, experience, entrepreneurship, or education that you can pass along to others?
Write down answers to these and similar questions. Dissect your talents, strengths, gifts, assets, and areas of expertise. Isolate those that lend themselves to products and/or services that people will purchase on a recurring subscription basis.
My Personal Story
I never wrote anything down when I started, but I did thoroughly assess what I brought to the table. I looked for ways to pinpoint my strengths and downplay my weaknesses.
Among other things, I had published a book. I had owned a cosmetics business and a retail store. I knew how to make cosmetics. I had been a practicing attorney for a Fortune 500 company. I geeked out over new technology. While somewhat of an introvert, I like being around people.
Other cosmetics makers had asked me how to market their products, and I had begun to help them do that. All of these things combined gave me the information I needed to narrow down a target market, a product, and a business model.
I strongly suggest that you write things down. You have far more opportunities than I did twenty years ago. If you don’t record your thoughts, they will probably become a jumbled mess in your head.
2. Identify what people might purchase on a recurring basis
Once I knew what I was good (and not good) at, I was ready to sort though what people might purchase on a recurring basis.
Most business ideas die a slow (and painful and expensive) death because the person behind them gets stuck figuring out the how before they figure out the what.
Don’t let this happen to you. Figure out the what first. Focusing on exactly what you are going to do will help you identify where the best opportunities are. It will also help you find your unique voice.
If you don’t have a unique voice, you won’t have a unique message. Without a unique message, you will be tossing spaghetti against the wall and hoping it will stick.Without a unique voice, you have no unique message. Without a unique message, you are tossing spaghetti against the wall and hoping it will stick. That is not a success strategy. #lifestyleceo Click To Tweet
Address what problem you will solve on a recurring basis first, and the how falls into place more easily. Assess the best possible options, then pick the one thing you want to do.
My Personal Story
One. One. One. One. One. One. One. One. One. One. One. One. One. One. One.
As the author of a book about how to make cosmetics, I could have opened a training program to teach others how to make cosmetics. As an attorney, I could have offered a legal services package for a recurring dollar figure each month. As an aromatherapist, I could have offered courses on how to use essential oils or how to become an expert aromatherapist. (Each one of these is a real recurring revenue business today!)
I had many options, but I decided that I wanted to combine my legal and business background with my love for making cosmetics to create an entrepreneurial training organization to serve cosmetics makers.
I knew the importance of doing one thing, and doing it well.
Don’t get suckered into thinking that doing one thing is limiting. It’s not. Focusing actually delivers freedom.
IBN’s longevity is due more to what I didn’t focus on, than to what I did focus on.The 20-year success of @IndieBusiness is due more to what I didn't focus on than to what I did focus on. #lifestyleceo Click To Tweet
3. Choose reliable platforms
Now that you know your strengths and skill sets, and what you want to do, you can choose the technological platforms you will use to serve your people. How will you deliver your products and services?
Whether you are selling a physical product or a service, this generally involves selecting the tools you will use to process recurring payments, how you will package and ship physical products, where you will host events or a store or shop, and/or how you will deliver virtual content like webinars, audio files, etc.
It also involves deciding how you will connect meaningfully with your community online. Options include a Facebook group, Slack, vBulletin, Simple Press, Ning, and Mighty Networks. I have used all of these tools throughout my career, and can now help you figure out which one will work best for you.
My Personal Story
I started IBN before any of of today’s technologies existed, so I processed recurring payments manually. Yep. With a telephone, an email message, and manual data entry of a credit card number into my merchant account website. Back then, it took nearly 7 days for a payment to process into IBN’s bank account. (I am cringing as I am remembering those days!)
When blogging became an option, I added that. I added a podcast next, then waves upon waves of social media followed. (My first was Twitter.) Eventually, a slew of online platforms suitable for community hosting came along. It’s a big decision, and it can be dizzying. You will probably need help making some decisions and setting up some things. (You can work with me here.)
I had the benefit of adding things on slowly over time. Today, you have a whole boatload of options right off the bat. That’s a good thing, but it can also be overwhelming, and it gets a lot of people stuck. (I can help you get unstuck.)
Start slowly and avoid getting stuck on how to do things perfectly. Start doing things reasonably well (and, maybe manually) for a small number of people, for a short period of time, and then add the technology on top of that once you know what your needs are.
4. Implement systems
One of my personal business practices is never to do anything that I do not plan to systematize and repeat to achieve specific results over time.Never do anything in your business once that you cannot systematize and repeat to achieve specific results over time. #lifestyleceo Click To Tweet
With this in mind, deciding when you will serve people is all about setting up your business operations in a way that is repeatable, so that it is easy for you to do without wasting time thinking, or so it’s easy for you to train someone else to do for you. It also means making sure you properly secure people’s personal credit card information. Don’t skimp on that!
Other things to consider: how often will you process a recurring credit card payment, and on what day of the month? How often will you ship physical products? When will you deliver any online content, videos, MP3 files, CDs? Monthy? Weekly? Daily?
My Personal Story
As you might imagine, in nearly 20 years, IBN has delivered a variety of different types of content on a systematized basis. For example, each month, I host a live Master Class like this one, usually on the third Thursday of the month at 1pm ET. Once a week, IBN’s amazing Subject Matter Experts share tips in their areas of expertise in our private entrepreneurial community.
I also host the Maker Mastermind Circles Business Accelerator. It’s quarterly and it runs using the same basic format every time.
Another powerful example: I have hosted Indie Cruise every January since 2011. There is no end to the number of activities that can be repeated to support continued success.
To achieve success with recurring revenue, you need recurring systems. Whether it’s a physical or virtual product, a service, or an event, the success is always in the system.To achieve success with recurring revenue, you need recurring systems. Whether it's a physical or a virtual product, the success is in the system. #lifestyleceo Click To Tweet
5. Be present
People often ask me about how much time it takes to manage a business with a recurring revenue model, particularly a membership like IBN. These people tell me they are afraid of how much time it will take.
It’s wise not to start something you don’t think you have enough time to actually execute. On the other hand, what better way to invest your time than with the people who pay you on a recurring basis?
My personal experience is that it is critical that you be present personally if you have a membership business model that relies on recurring revenues. Even if you sell products only on a subscription basis, unless you are using Amazon or some other anonymous type of platform, your members will consider their level of access to you personally as a reason to continue or not continue their subscription.
Over time, you can groom people to be present in your place, but at the beginning, it has to be you.
The more present you are, especially at the beginning of your business, the more money you will make and the more of an impact you and your business will have.The more present you are, especially at the beginning of your business, the more money you will make and the more of an impact you and your business will have. #lifestyleceo Click To Tweet
My Personal Story
While I have always been very present in IBN, I maintain systems that allow me to be present based on certain personal criteria that work for me. For example, I am present through my podcast and my blog. I am present through our private entrepreneurial community and via webinars and other presentations. I am present in the form of physical and virtual events as well.
In addition, I collaborate with other people who work with me to maintain and nurture a thriving community.
I have tried a lot of things over the years. Some have worked better than others. It is not a static process. It changes based on seasons and the ebb and flow of life and, importantly, technology.
I am constantly redefining what works best for my community. It is a never-ending tweaking process.
6. Invite and influence
No matter what you offer, you must market it or it will not sell. With a recurring revenue business model, you must market on the front end with things like a front-facing blog and social media. You also must market on the back end, to retain subscribers. (More on this in Step 7.)
Don’t confuse attracting new members via strategic marketing tactics with cutting and pasting promotional pitches and clever Instagram-worthy pictures of yourself everywhere, cluttering up people’s Facebook feed and turning an otherwise useful YouTube video into an advertising nightmare.
Don’t be the person who does that.
Talk directly to your target customer about things that matter specifically to them. Engage with them. Take time with them. Care about them. Love and nurture them within the construct of the product and/or service you offer. Use a blog and newsletter chiefly, and maybe a podcast and/or Youtube channel to amplify your message throughout the Internet.
Tell the truth, and don’t produce a cookie-cutter version of what someone else is doing.
My personal story
I discovered early on that in a recurring revenue business model, you have two naturally powerful ways to invite people to check you out — the product and the subscription. Every time you talk about one, you talk about the other by default. It’s a very compelling combination.
For example, by default, a podcast interviewing one of my IBN members features not just the member but also the membership. You can see an example here where my guest talked about how much she loves her membership in IBN.
This also works when you offer a tangible product. For example, let’s say you sell deodorant on a monthly subscription basis. You publish a blog post about a subscriber who loves the new fragrance of deodorant you offer because it smells good and it’s delivered to them every month so they don’t have to buy it at the store.
That blog post markets both the tangible product and the subscription. This kind of natural leverage is not only compelling in terms of influence, but it’s fairly easy to repeat and maintain.
In other words, the product or service people will buy on a recurring basis leads to an experience. The experience leads to the feeling of belonging … the membership, the community. The community leads to the decision to purchase or renew the subscription, and that leads back to the product or service you offer. This is a business cycle that is recurring, predictable and fairly easy to maintain.
Speaking of which …
7. Retain and maintain
It costs a lot more money to attract and earn a new subscriber than it does to maintain an existing one. For this reason, you must make sure you have strategies in place to retain subscriptions for as long as you possibly can.
There are lots of ways to do this, including delivering newer and more valuable products and services as you grow, building community around your brand, and offering grandfathered pricing.
My personal story
Through 20 years of experience, I have learned that what attracts people to a subscription is most often not what influences them to renew that same subscription. You must continuously keep people engaged. This is no different from what all entrepreneurs must do.
In a recurring revenue business model, people usually come for the subscription, but they stay for the community. I absolutely know this to be true.
Therefore, your buyers are not customers. They are members. This is a simple but very powerful shift in how you see the people who buy your products.In a recurring revenue business model, people usually come for the subscription, but they stay for the community. Therefore, your buyers are not customers. They are members. #lifestyleceo Click To Tweet
So there you have the 7 steps to recurring revenue:
- Identify your assets, strengths, and skill sets
- Know exactly what you want to do
- Choose reliable platforms
- Implement systems
- Be present
- Invite and influence
- Retain and maintain
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I invite you to continue the discussion by leaving a comment or question below. I look forward to coming back to see what you have to say!