SUBSCRIBING TO A WIDER MOAT: Five reasons subscriptions can help stabilize your business and client relationships.

Author:Mortier, Scott
 
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The subscription business model used to be primarily gyms and media (newspapers, TV and magazines), however, more products and services have been adapting to today's consumer who wants quick and easy access at their fingertips. According to Zuora's Subscription Economy Index, subscription-based businesses are growing revenue nine times faster than the S&P 500 Index.

Now, the subscription trend has started to catch fire in the B2B sector as well, with more companies looking at how to gain loyal customers or clients by increasing the ease and efficiency of what they offer. This works especially well in a franchise system, as the customer or client will frequently have access to the service nationwide. At Dental Fix Rx, a dental equipment repair franchise, we introduced a subscription service and within the first 90 days the program amassed more than 100 clients signed on, and a passionate franchise fan base.

Every B2B franchise brand should introduce a subscription membership option, and here's why:

  1. Monthly Revenue

    Consistent revenue coming in can be the number one challenge for franchise owners providing a product or service to other businesses, but recurring revenue from a subscription-based membership program generates guaranteed cash flow each month. It creates a regularity and stability your franchisees can rely on, while taking away any question about where next month's revenue is coming from.

    Franchise owners utilizing a subscription business model are better able to forecast monthly revenue, and in turn, are more suited to budget out business expenses accurately.

  2. Resells

    Not only does a B2B subscription model benefit a franchise owners' ability to predict their monthly cash flow, it also increases the value of their business and increases appeal to potential buyers. If a franchisee in your system is looking to retire or sell their franchise for any reason, it behooves them to have the cash flow from a subscription offering. With the fixed revenue stream, owners can sell the business for twice as much as it would have been without a continuous revenue stream.

  3. Client Retention

    When potential clients are researching and trying different products or merchants, it can become overwhelming, time consuming and can even disrupt his or her business. Subscriptions are such a success in the B2C arena because they solved these issues.

    Consumers want to have easy access to a product or service at a high quality and with maximum efficiency...

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