We all know life can be unpredictable.
Things break, the roof starts leaking, or your computer gets a virus.
How much would you pay to know you are covered in situations like this? To be sure that you can get help fast, or that you can avoid it happening in the first place?
This is the concept around the Peace of Mind Subscription Model, it involves selling an insurance premium or some type of support, for something your customer hopes they never actually need.
This subscription model is number eight in our series on the 9 Models of Recurring Revenue. If you haven’t already done so, make sure to catch up on the previous models. You can find them here - The Network Model, The Subscription Box Model, The Content Subscription Model, The Private Club Model, The Front Of The Line Model, The Membership Website Model and The Simplifier Model.
Companies like MePACS and VitalCall, offer a personal alarm device that can be worn as a pendant or bracelet. The device is equipped with a button that you can press when assistance is needed. If the button is pressed, a response operator will be able to speak to the person wearing the unit. This brings much comfort to people that have elderly parents at home. Whilst you hope your loved one won’t actually need to use it, it’s peace of mind knowing that it’s there. The pricing involves the cost of the device and a monthly subscription/monitoring plan.
How about the peace of mind that your fur baby is safe and healthy? Whistle, a dog loving technology company, offers a solution to relieve dog owners who worry about losing their four-legged baby. Whistle GO, known as the ‘Fitbit for dogs”, allows you to track your pet for the purchase price of the device collar plus a monthly subscription $9.95/month. It alerts you when Lassie goes walk-a-bout beyond your predefined ‘safe space’ and locates her whereabouts for you. It tracks Lassie’s daily exercise and sleep patterns, and you can see exactly where Lassie has been clocking up those steps. The pet tracking industry is fast growing, in 2015 Whistle purchased Tagg, then in 2016 Whistle was snapped up by Mars Petcare for upwards of $100 million.
Businesses also pay for peace of mind. CrashPlan, is a company that provides cloud data backups, support and security options to smaller businesses. Their value proposition is strong: people know how important it is to perform data backups, but they simply don’t remember to do the manual backups on a regular basis. This is where CrashPlan steps in to ensure that your data is always safe.
Other companies like site24x7.com monitor your website and notify you if there’s a problem. The “online reputation monitoring and management” industry was pioneered by Radian6 before they were acquired by salesforce.com. The likes of Honda and Cisco use Radian6 to listen to the conversation about their brand on social networks and tell their side of a story if negative stories arise.
Don’t think that this type of subscription is for technology or monitoring companies alone. Knowing that ‘prevention is better than cure” there are a lot of applications for these types of subscriptions. Let’s say that you live in a bush fire risk area, if you knew that the coming summer was going to be a scorcher and the potential for bushfires could put your house at risk, you might be interested in paying a subscription to a home maintenance company to perform regular bush-fire maintenance over summer.
On the subject of home maintenance, anyone that has had to repair a damaged roof or flooded basement due to clogged gutters will know it’s a total nightmare. If your company does this kind of work, you could offer a monthly eave cleaning subscription. It’s a preventative measure that could save your client thousands of dollars. The upside is that it also makes your business easier to scale as this monthly task is something that an apprentice can easily be trained to do.
Delivering peace of mind to people is powerful, it relieves them of certain worries and enables them to free up that time for other things.
Now it’s time to think about your audience.
What are their fears and desires? What could help them on an ongoing basis to eliminate fear and bring peace of mind?
Perhaps it involves their business, loved ones, pets, health or security. Is this something that aligns with your business and could you offer it as a subscription service?
Helping to alleviate burden on people’s chests can be rewarding on many levels.
As mentioned, The Peace of Mind Model is the eighth subscription model in our series. Be sure to catch up on the previous models to get some great insights and inspiration, you might just find a subscription model that would work perfectly for your business.
As you learn about the different recurring income models, think about whether you could apply them to your business.
Perhaps just certain ‘elements’ can be introduced or borrowed – you don’t need to have a 100% subscription model to get benefits. Even a portion of recurring income will bring great advantages.
Subscription business models are now being introduced across many different types of businesses and are poised to grow. The next wave is being predicted to hit manufacturing and industrial companies.
Keep an eye out for our next article where we’ll dive into the ninth (and final) model of our recurring income series.
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CEO and Founder, Exit Advisory Group
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