In this episode of the Insane Growth podcast, I’m going to talk about the one thing you absolutely must do to drastically increase your customer lifetime value, explode your profit margins and watch your business really take off.
It’s not some super-secret strategy, either. And it doesn’t involve selling unicorns or pots of gold, or anything like that.
Actually, it’s a rather common practice by today’s standards. In fact, chances are, you probably patronize at least one company that implements the strategy – and makes a killing in the process.
(I’ll give you a hint: Think Netflix, Birchbox, and Dollar Shave Club.)
Got it yet?
The path to insane growth for your business begins by shifting from a traditional one-time payment model to a subscription-based one.
I say this not just because I’ve seen it work wonders for hundreds of entrepreneurs, but also because the decision to switch to a subscription-based business model is the reason BigCommerce (which I co-founded in 2009 and ran until 2015) became the e-commerce powerhouse it is today.
When I co-founded Interspire back in 2003, the company operated under the more traditional business model, offering products to customers in exchange for a one-time fee.
While Interspire did offer a variety of products (along with various pricing tiers for each), our team quickly realized we had a major problem: essentially all of our revenue was coming from one-time customers.
It makes sense, really — since we gave our customers lifetime access to our software, they literally had no reason to make any additional purchases in the future.
The “Aha!” moment came when we revamped two popular Interspire products – Email Marketer and Shopping Cart – and began offering them to customers for a monthly fee instead of a one-time payment.
Within two years, we’d experienced so much success that we decided to focus entirely on these two products. While we continued to experience moderate success with our email marketing software, the massive success we experienced with BigCommerce is what truly proved the power of a subscription-based model to our team.
In this episode, I’ll dive a bit deeper into the the decision to switch from a one-time payment model to a subscription-based business.
I also discuss:
- The many other (perhaps not-so-obvious) benefits of shifting to a subscription-based model
- The potential challenges you may face when making the shift
- The transformation you must undergo to successfully make the shift (no matter what niche your company operates in)
If you’ve already proven that your company offers high-quality products or services that are always in demand – but you aren’t quite seeing the results you know you could be seeing – you definitely need to tune in.
- For Entrepreneurs: A blog by serial entrepreneur David Skok that provides a ton of resources for first-time and experienced founders.
- Kajabi: An all-in-one platform for creating an online business, complete with tools for creating websites, online courses, quizzes, and more.
- InsaneGrowth.com (formerly MitchellHarper.me): My own website and blog, where I provide a ton of actionable advice, tips, and strategies to help you grow your business to the nine-figure mark.
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In this FREE preview of Insane Growth founder Mitchell Harper's upcoming book Accelerant, you're going to learn:
- How to architect your ideal life in crystal-clear detail, so you know exactly what you want
- The mindset secrets that will 10x your business while you work 80% fewer hours
- Strategies to maximize profits and dramatically increase the value of your business