Building Your Recurring Revenue Model
Think about how you are going to earn money from this concept. You have probably already chosen one of the three recurring revenue business models. The next step is for you to pinpoint who your ideal customer or general target audience is.
Not only do you need to understand the basic demographic information such as their age, gender, location, income level, etc., but you need to know more psychological and behavioral elements that tell you more about their pain points, preferences, and challenges.
Keep in mind that this is not a one time process for you. As a business owner, it's up to you to understand how your customers journey will evolve over time. Their needs will change, and you have to be able to deliver something that addresses that transformation.
When you are building your recurring revenue, you never want to over promise and under deliver. You have to be realistic about timelines and how often you can publish or develop features for something so that you are not disappointing them.
It's important that you maintain open communication with your customers and don't disappear on them like so many online entrepreneurs do when they start sliding in their responsibilities.
Think about how you are going to price your recurring revenue system. Typically, there will be some sort of value based pricing that allows people an entry level onboarding arrangement until they feel comfortable with the value you can provide to them.
That's why it helps to have tiered pricing, where you can cater to people who have elevated budgets and increased needs for core functionality or advanced features and support.
You have to think about what type of tools you will be using, such as a CRM (customer relationship management) tool that houses customer data and facilitates the management of their subscription.
In order to help you maintain good customer retention and continue delivering to their needs, you'll also want to have a good analytics system in place that can tell you more about customer behavior and what you can do to improve things such as your churn rate, cost of acquisition for each lead, etc.
Because you will have a system set up where people are subscribed, you'll want to have a solid security system in place that protects customer data. That means ensuring privacy and backing up your system regularly.
Make sure you are looking at any type of technology that can help you with running your recurring revenue system, and even automating it wherever applicable. This will make your system streamlined for success.
