A few years ago Robbie Bach spoke to my Rotary club and one of the questions he asked was, “How many subscription services do you have?” He went on to say he’d bet it’s 20 or more. It’s a good exercise to think about how many you actually have because I’ll bet it’s more than your first guess would be.
Everybody wants to be a SaaS business. Heck, QFC and Fred Meyer now have a program with an annual fee that gets subscribers faster delivery of groceries. Really? Amazon wants us to subscribe to any and everything, QuickBooks made their desktop version an annual license so it’s more expensive that their online version, and don’t even try to list all the TV streaming services.
One of the many buzzwords with business buyers, especially younger ones, is “recurring revenue.” What they really should emphasize is recurring customers, which recurring revenue is a subset of. You build recurring customers (or recurring referral sources) by doing great work and providing value your customer feels exceeds what they pay you.
You don’t need a subscription if you make your business indispensable to your customers. You can grow with customers this way. You can’t get someone to subscribe twice. A client told me while we were on a call last week two of his clients sent him messages saying they wanted to get going on new projects.
Both models work and can work well, and can work together if, and only if, you provide the necessary value.
“When the gods wish to punish us, they answer our prayers.” Oscar Wilde
“Nothing travels faster than the speed of light – with the possible exception of bad news.” Douglas Adams