The global health crisis and 2020 brought businesses to their knees if they didn’t have a way to continue to make money and service clients during lockdowns. Entire revenue streams got cut off, even though overhead and expenses continued.
As a Business Strategist, I helped many clients set up revenue streams or adapt existing ones to be able to continue to support customers while maintaining or even growing revenue! If this is something you know your business needs feel free to reach out or take some of the pointers in the article below.
My recent article for Entrepreneur magazine is all about how entrepreneurs can set up recurring revenue programs and why now is the time to do so.
How you can borrow Apple‘s emerging business model to secure your success as an entrepreneur
If your business is facing increased competition for sales, here is a big lesson from one of the world’s most valuable companies.
Now more than ever, entrepreneurs are facing steep competition. Add to that an increasing customer base that’s able to shop prices across numerous options within seconds on their cell phones, and you have a recipe for rising advertising costs and tighter margins.
Today, companies large and small are navigating their way through these changes with obvious or subtle adjustments to their business models. One such example is Apple. When consumers think of Apple, what comes to mind is the iPhone. However, behind the scenes, Apple has been developing subscription products and even changing the way it sells its flagship iPhones to bolster the most important component for any business: cash flow.
Here are three principles that you can implement into your own business, and borrow from Apple’s success.
1. Offer a perpetual product or service to your existing clients.
For so many years we approached business through the lens of a transactional model — a series of exchanges between two parties, in other words the business and the customer. What Apple has been focused on, and how this can help your business, is to shift from that transactional model to a journey-based one that continually maps to the ongoing or anticipated needs of the client, and is steeped in brand trust.
This results in a relationship where the customer doesn’t just come to the business when they need a finite problem solved. Instead, they develop an ongoing partnership with the business as a resource to help them in a particular area of life.
Netflix has modeled this well by becoming the go-to entertainment resource for movies and television, and they have seen their small, simple subscription model skyrocket to a $30 billion success.
One way to look at this is to simplify your business model. Instead of offering a menu of different products and services that provide different solutions, you can bundle them into a subscription service that makes financial and emotional sense for your customers, who get peace of mind with round-the-clock access as well as money savings in the long run.
2. Upgrade offers
Offer access to your existing products or services in an “upgrade program” where customers are on a payment plan that renews when they gain access to iterations or updates to your products or services.
Apple did this when it made a significant move to offer Apple Card, a credit card with a 3% cashback option on purchases made on Apple products. Without discussing the potential value of having this purchase data on their customers, this offers users the ability to pay for products over time, reducing the barrier to entry and increasing the ease and feasibility of upgrading year after year.
Additionally, Apple introduced the iPhone upgrade program, where users still buy the iPhone, however they opt into a plan where it makes sense for them to continue to acquire the new phone every year. This psychological hook is extremely powerful and it’s something you can offer in your product or service business.
If you provide services such as massage therapy or personal training, you can offer your clients an automatic billing program where they get a certain number of sessions included that would exceed the value compared to paying a la carte. You can set these sessions to expire each month, giving an additional incentive for the customer to use them, boosting the perceived value of saving money.
What helps the relationship more is that this approach also adds value by helping with the very benefit you’re offering – getting them to look after their body and stay compliant.
3. Support services
Look at how you can add a new level of support as a bolt-on to your existing offerings. Apple does this with iCloud and Apple Music. You already use the product you purchased, so adding on these subscriptions improves your user experience. With iCloud, Apple promises that you will never run out of storage space at a time when a rare, never-again moment would occur and you might otherwise miss out on capturing a photo.
In your business, what would help your client get more efficient or effective use out of your product or service?
You could offer a subscription that gives access to technical support, such as the Geek Squad from BestBuy. You could also offer something that relieves the workload for your customer or something that accelerates the benefit of your core offering.
If you are finding it increasingly difficult to attract new customers month after month, consider adding a subscription offer to your strategy. This is one of the best things you can do to stabilize your bottom line while helping you grow your business.
Take the time to look into at least one of these models, as the return on your investment is making a single sale that continues to pay month after month, year after year.
Link to original article: https://www.entrepreneur.com/article/371113