The holy grail of any business is to find recurring revenue ideas. Here are some tips for you. But first, let's just remind ourselves of…
The need for recurring revenue ideas
If you focus exclusively on one-off sales, you’ll need to constantly source new customers just to stay afloat. In addition to the sheer amount of time, money, and effort involved, relying on first-time customers can make it difficult to manage cash flow as sales wax and wane throughout the month.
When you move to a subscription-based business model, however, it’s possible to generate recurring sales from the same customers throughout the year. Because these people are already familiar with your products and services, they are much easier to convert. Plus, having consistent sales throughout the year can dramatically improve your cash flow.
How to set up your business with recurring revenue ideas
How best to position your business for recurring payments ultimately depends on your niche. For example, the service industry lends itself to subscription-based business models, whether this means:
- Charging a monthly retainer for your lawn care service
- Selling gold memberships to your most loyal restaurant diners
- Offering annual passes to your performance venue or theater
However, it’s still possible to generate recurring sales even if you sell physical products. Although someone might only buy a hammer from you once, you can generate subscriptions by offering some type of value – be it freebies, webinars, or exclusive content. For example, your hardware shop could offer premium DIY workshops for those who purchase a certain amount in a given time-frame.
Another approach involves partnering with relevant businesses in your niche that don’t directly compete with you. For example, many of your hardware store customers might also regularly patronize the local plant nursery. Offering joint loyalty points could generate a lot of recurring and first-time sales for both businesses.
Sticking with the hardware example, you could also find mastermind groups and trade associations in your area that attract your target customers. In addition to being fertile ground for sourcing new clients, these meetups could be a great place to pitch promotions and discounts that are exclusive to contractors, electricians, and plumbers in the region.
Regardless of niche, size, or clientele, it’s nearly always possible to add a recurring payment component to nearly any business. The trick lies in finding creative ways to offer tangible value that keep customers coming back for more.
For a longer list of simple and actionable ways to transform your growing business into a recurring payments engine, check out the accompanying resource.
Infographic created by Clover