Most of the money I’ve made as a copywriter, I’ve made because I understand how to sell subscriptions…
Way back in 2005, when I started in marketing, I got a gig with an IT training publisher that had started by selling individual training series that matched up with one career certification exam.
That business grew to around $1 million per year, doing that, with an average customer value somewhere around $200.
Then, the guy before me added packages. Rather than selling one training series, for one exam, they started bundling all the videos for an entire certification program together, and selling that all at once.
Packaging grew the business to about $3 million, with an average customer value that was approaching $600.
Then, shortly after I got there, we launched subscription access to ALL our training content.
That changed everything.
Suddenly we had customers paying $1,200 per year, instead of $600 over their entire life with the business.
The business grew to $6 million within a couple years, simply by focusing on selling subscriptions.
Since then, that business has continued to focus on subscriptions, and I understand it’s doing about $30 million per year. And that’s ALL subscription revenue — they’ve dropped individual product access in favor of using the subscription to serve everybody.
And since their content is great, retention is incredibly high.
My guess is today the average subscriber is worth well in excess of $2,000, as they continue to renew their subscriptions.
It’s not hard to see why those early experiences in marketing turned me on to the profit-generating power of subscriptions and memberships.
You sell once, and you make money for months, years, or even decades into the future. Continue to deliver the value the customer signed up for, and if their need or desire for the product is sustained, you’ll keep making money from each customer indefinitely.
And as you grow your subscriber base, your total revenue just goes up and up and up and up.
Since then, I’ve continued to sell subscriptions — a whole lot of them! Many of my clients are in the financial publishing industry. We sell regular investment newsletters, as well as up-to-the-minute trading alert services. All of it paid on an ongoing basis, for services rendered through time — in other words, memberships and subscriptions!
Along the way, I’ve learned many of the most important secrets to selling subscriptions!
And I thought that since so many businesses and industries are moving toward a subscription, membership, SAAS, or other recurring payment model, it might help if I shared some of what I learned.
Sound good? I thought so!
Where should we start? Oh I know…
Roy’s Rules for Selling Subscriptions…
- People buy because of what they can get NOW.
- People don’t like commitment or ongoing obligation.
- People do like convenience, and will accept ongoing payments if the benefit justifies it.
People buy because of what they can get NOW…
This is, first and foremost, the biggest rule of selling subscriptions. People want instant gratification. And if you offer it as part of your subscription offer, you’ll get a lot more customers.
Let me use the IT training as an example, before moving on to others.
Let’s say you’re an IT professional, working on a network featuring Cisco hardware. The entry-level certification for that is CCNA. So you go out looking for CCNA training. You look at options, and you compare different training companies.
Then, you stumble on a company selling a complete IT training solution. The price looks great, and it looks like there’s a ton of training you’ll eventually use.
But why would you sign up today?
If you guessed, “Because you want the CCNA training,” you’re right!
You may have stumbled on this IT training solution because you were looking for products in the category, but you don’t want a whole category of products right now. Right now you’re looking for the CCNA certification training that will help you do well at work, prove your skills with the certification, and get a promotion, raise, or new job offer.
You don’t buy because you have access to ALL the training, you buy because you want CCNA now.
On the marketing side of that, the training catalog becomes a secondary benefit. You will do best reaching out to prospective customers based on the certification that they’re most likely to want next, and pointing them to that training as part of the catalog. The way they get it is through the subscription, but that’s really a secondary detail in making the initial sale.
Once they have the subscription, they will make the decision to renew or continue based on the other value. But your ability to sell to them is directly tied to meeting their current need.
Likewise, when I’m selling an investment newsletter, the newsletter itself most often becomes the afterthought.
Instead, we determine what the most valuable piece of information is that we can provide the prospect today — such as a current stock pick, or short list of related investments around the core selling theme.
We build our entire selling narrative around that initial bonus, and make it the first deliverable when we present the offer.
The newsletter or membership then becomes a way to continue getting follow-up on that pick, as well as more from the same analyst, over the life of the subscription.
The same with many other subscriptions.
If you’re selling software, it’s about the impact it can make in the first month. If you’re selling training, it’s about the initial package of training they get right away, that’s a precursor to ongoing content.
Others have been quite successful bundling a subscription product as an add-on to some other package. For example, a live event will come with a discounted 1-year subscription to a marketing membership site, or an online training package will come with a 1-month trial.
There are many ways to make it work. The big thing is that it’s all about what’s going to show up on their doorstep (literal or digital) as a direct and immediate result of signing up today.
People don’t like commitment or ongoing obligation.
This is the hurdle you must overcome. This is the biggest mental block to selling a subscription.
We all have ongoing obligations. And we don’t want to add to them. The idea of adding yet another monthly bill to our credit card statement is an aversive idea.
Which means that YOU, the marketer, need to deal with this objection.
The best way I know of doing this is to turn the yes into a maybe, the commitment into a trial.
I never sell anything these days without some kind of guarantee, trial, or other risk-reversal device built into the offer.
If there’s a 60-day guarantee, that allows me to make that the “trial” period. As the customer, you are under no obligation when you say “yes” today — and in fact, your “yes” is a “maybe.” Because you can try the service for 60 full days and if you decide at any time that you’re not fully satisfied, you get a prompt and courteous full refund. In that way, even though you’re making payment today, it’s not final until you decide it is.
Alternately, a true trial is a very effective tool for selling subscriptions. It’s often much easier to get someone to sign up for a trial than it is to get them to commit to even their first month’s payment.
There are a lot of factors in deciding how to structure your trial. It can be free. It can be reduced-price. It can be short. It can be a full month (assuming a monthly subscription). It can be partial-access. It can be full access.
However you do it, realize you’re making two sales. The first is the trial sale. For this sale, it’s about making it as easy as possible for them to try, without obligation. Then, once they’re in the trial, you must use a combination of persuasive communication and actually fulfilling on your product or service’s promises to make sure they stick as a subscriber.
All these little details are beyond the scope of this article, but if you are doing trials, just make sure you’re focusing on making BOTH sales for maximum success.
Finally, let’s talk risk-reversal. No matter how you structure your subscription, you will have the most success selling if you make it as easy as possible for your customers to stop their subscription, and emphasize that up front.
Don’t be that marketer who makes money by making it impossible for them to get out once they sign up. That’s just inviting unwanted trouble.
Instead, make it as easy and appealing as possible for them to start the subscription, and deliver so much value they’d be crazy to stop it. Deliver on all your marketing promises and then some, so they’ll want to tell their friends about the value you provide.
When you do that, you can be confident making a bold offer and telling prospects they get to try it at zero risk and obligation. Because they will stick, because you offer them such compelling value.
People do like convenience, and will accept ongoing payments if the benefit justifies it.
Finally, once someone is a subscription, it’s usually very hard for them to make the mental decision to get out.
Once we are getting a certain product, or having value regularly delivered to us, we grow accustomed to it.
This is the flip side of the barrier that prevents people from signing up in the first place. Unless they grow cash-strapped, your subscribers will learn to ignore the monthly charge on their credit card statement, as they sell themselves on staying in.
When I sold the local newspaper, they took advantage of customers based on this fact. New subscribers would get discounted introductory offers, and get bumped up to full price on the first renewal. It was abusive, but it led to a ton of full-price subscriptions.
I always hated that, and would never recommend you do that. Instead, raise the price across the board, if your value proposition justifies it. And make sure you’re delivering a ton of value up front, in the form of those initial bonuses.
These customers will eventually become your cash cow. Because a new subscriber costs a lot to get in the first place. But a previous subscriber usually costs a pittance to maintain. Make sure you’re staying connected and still delivering a ton of value, and you’ll keep them happy for a very long time.
This will cause your subscriber base to continue to grow and grow and grow, and your profits with it.
Yours for bigger breakthroughs,