6 Repeat Business Strategies to Raise the Bar 2023 |
What do Netflix, Microsoft, your gas company, and the coffee shop in your neighborhood all have to share?
They are all recurring income businesses. Repeat businesses. As in, people continue to pay them every month.
Unlike the poor suckers who fight for customers and clients every month, repeat revenue businesses can often spend less energy and time on customer acquisition and focus on delivering value to the clients they already have. Repeating revenue provides steady income that allows you plan to the next year.
There's something awesome about the concept of repeat business. If you design something clients keep returning to, or are willing to pay for every month or year, you've got a recipe for profitability.
In this article we'll give you some recurring revenue business concepts. These ideas for recurring business will help you design an enterprise that will keep clients coming back month after month and can be extremely profitable!
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In this article...
What exactly is recurring revenue?
5. Service of subscription (product-led)
What is recurring income?
Recurring revenue is the time when your customers make payments to you repeatedly each month and years.
This could be a subscription business or membership company, which generally require regular monthly payments. You Netflix account is a source of Netflix every month regardless of whether you shared the password with your cousin from Idaho.
It could also be a sign that you've created a company that your customers continue to return to, such as Starbucks. This kind of repeat purchases also generate regular revenue. In addition, the more frequently customers return to the business and return, the greater the value of the business.
Benefits of recurring revenue
The recurring revenue model is at the heart of many of the top-performing firms around the globe. At the intro to this article, we talked about companies like Microsoft. At the time when you bought Microsoft Office in a box. Then you paid once and then installed the CD-ROM onto your personal computer (are you sinning here? ).
Now, you probably have it downloaded and paid a yearly fee. But unlike the $150 CD-ROM which you likely used only every five years, and then shared with your colleagues in turn, by turning their program into an ongoing revenue stream - where you pay $100 a year , Microsoft can make even more.
That's why increased revenue is one of the main benefits of running a business with recurring revenue. These are a few more:
- Lower CPA. Every business has to consider its CPA (cost per acquisition of a client. Recurring revenue businesses don't need to keep reacquiring the same customers.
- The ability to scale. Recurring revenue gives you the ultimate scalability. If you are able to keep your churn rate relatively low, you keep adding more customers to your customer base. It's growth for your business!
- freedom. A Recurring revenue business gives you a solid financial foundation that frees you up to deliver a great solution or product.
6 Business ideas to repeat
1. Community
At Mighty we assist people to build one of the greatest recurring revenue businesses out there: community .
Membership communities just work. At a human level it is because people all seek connection and sense of. When we join an online group, we are able to master something important to us as well as meet other people who we feel passionate about.
But the business side of community is quite awesome too.
Imagine that you have a business that you start for next to zero and then grow to 100,000 every month. It's happened.
Memberships to a community are an effective recurring revenue source.
To start a community You'll need to determine an Ideal Member as well as a purpose. Find a great community-building platform such as Mighty which will allow you to set up and run your own community. You can also add your personal brand and everything you need to sell. And you're going to race.
Through our study We've found that the communities that charge for membership do better. They have more engaged members and have higher success.
This is due to the fact that people value what they pay for.
Community examples that are recurring revenue companies:
2. Retainers plans
Another type of business that is recurring is one that relies on retainers. This is often seen with companies that advise on behalf of other businesses, and possibly more famously, working with lawyers.
A business that is based on a retainer means that a company will pay the business an amount every month to provide the services of a specific type. If it's services that continue to be provided, you've created an underlying source of revenue that is recurring.
Retainer businesses are often overlooked as viable business options however, they could be extremely profitable. If your business provides digital marketing solutions to 10 businesses, charging them each five thousand dollars per month, you have an agency making 50k a month!
You get to focus on what you do well and then build a company around it. A company gets the benefit from your expertise without the need to employ someone to perform that thing.
Examples of retainer-based recurring income businesses:
- Lawyers
- Bookkeeping
- The digital marketing
- Create content
- Financial advisor
3. SaaS
A single of the most attractive model of recurring revenue businesses is what's called SaaS which is software as a service.
SaaS businesses provide their customers with software that makes their life easier. The customer is charged a monthly fee to use that software.
The example was discussed in the context of Microsoft Office above. Technically, that part of Microsoft operates on an SaaS model. Imagine companies like QuickBooks, Adobe, Evernote, Zoom, and Dropbox. These are all companies that provide software as a service.
Actually, even is a SaaS company. We give businesses and creators the tools to create communities, courses, content, as well as commerce. In the return, we pay our users the monthly cost in one lump sum.
It used to be you'd have to know how to program to start the SaaS business. With the amount of no codes and white-label alternatives that are available, it's doable to get the SaaS firm in operation - on a bootstrap budget
Illustrations of SaaS business models that generate recurring revenue:
- Dropbox
- Microsoft
- Evernote
- QuickBooks
- Adobe
- Mighty
4. Local business
The transition from SaaS businesses that span the globe, let's chat about the local version of one of our idea business models: a local membership business.
If you take a look around your town there are all sorts of local businesses that offer membership. Most obvious is the gym where it costs you monthly for access to their equipment.
It is possible that you have been bumped against businesses that recur such as dance studios, yoga classes, children's sports or music lessons. These businesses offer products or services which you typically pay regular fees.
Take a look at the local cafe, masseuse, or hairdresser to see if they have businesses that offer repeat purchases. These businesses don't operate on the basis of a membership however, customers come returning time and time often.
If you'd like to begin a local repeat business, take stock of what people within your community pay for. What's missing? And how can you create a business that people will keep coming back to again and repeatedly?
Local repeat businesses:
- Gym
- Yoga studio
- Bouldering cave
- Play Cafe
- Hair salon
- Café shop
5. Services for subscription (product-led)
Subscription services are another idea to come up with recurring revenue business concepts. There are a variety of premium subscription services. take a look at Netflix as well as Disney +.
There are lots of subscription businesses doing well in a lesser scale. The rise of Substack brought an increase in subscription-based newsletters. The mailer Convertkit joined the bandwagon as well.
Perhaps an online subscription that is based on a product? If you've ever paid for the wine-of-the month club, then you've probably tried one of these. From razors to whiskey to food to books to underwear, there are lots of choices
A few examples of subscription-based business revenue:
- Wine club
- Artsnacks mix
- book of the Month
- Hello Fresh
6. Licensing model
Licensing is another one of those business concepts that aren't as well known. Through a licensing company, you own some type of patent or intellectual property. Your customers then pay recurring income to access that.
The year before in the year that Taylor Swift famously re-recorded her earlier album, she was doing so to get around one simple problem: someone had the right to her music. Her label owned the licensing rights to her music and was making profits on the entire album.
Franchising is not identical to licensing, but they are very closely linked. If you decide to purchase the rights to a McDonald's restaurant, you're paying to have the name. As a result, the headquarters will tell the restaurant how to decorate it and which cups to use.
But you get a proven brand name that has a track record of success, and instant name recognition as eager customers drive through.
McDonald's The head office, not your neighborhood restaurant - operates on an arrangement for licensing.
If you want to start a licensing business it is necessary to have any kind of intellectual property or brand. Once you do, you can get others to buy your rights to use the.
Are you ready to get started?
Whatever model for recurring revenue you're working on We hope that this post helped. There's a wealth of repeat-based business concepts out on the market, along with a plethora of profitable models. Make sure you are playing the right cards and you could be the next!
If you're in the process of building a membership or subscription business make sure you build using Mighty! Our powerful cultural software platform lets you mix the world of community, content, course as well as commerce. In addition, with our flexible Spaces allows you to incorporate live streaming and live events, discussions forums, profiles of members, chat and messaging, and more!
The app allows you to make payments in various currencies, or even monetize by token-gating. There's a fantastic app that works on every device or you can even choose to create your own white label app.
Entrepreneurs and entrepreneurs of all stripes have used our powerful program to develop awesome recurring revenue businesses such as Adriene Mishler - YouTube's best-known yoga instructor Marisa Peer and Sadie Robertson Huff.
If you'd like to test how you can create Try it yourself! Try it free for 14 days. No credit card needed.