According to statistics, most small businesses today are service providers. They may be financial advisors, lawyers, personal trainers, accountants, dentists, pool cleaners, consultants, engineers or in similar occupations. Essentially businesses like these sell time, not a product.
Time is a finite resource. We each only have so many hours in a day.
That means it is harder to scale a service business where you sell your time. Typically you have to hire more employees or outsource certain activities. And labor, especially for knowledge workers, is expensive.
So the question remains: How do you grow when you’ve started and run a service business?
That’s where the power of your knowledge and today’s trend of content marketing work to your advantage.
Evolving to a Subscription Based Business Model
According to Greg Head, Chief Marketing Officer of Infusionsoft, a marketing automation software provider, one of the ways to scale a service-based business is to turn your knowledge into a subscription-based model. “With a subscription-based model, you can automate educational services online — and even the services you provide through in-person interactions,” he noted. By incorporating self-service access to their expertise, small businesses can expand and transform their operating models beyond in-person engagements, he added.
Infusionsoft and research firm Audience Audit teamed up on a study earlier this year of more than 1,100 small businesses that showed a growing interest in subscription-based delivery models. Those small business owners focused on growth spent more of their time and budget on marketing and sales, and they also used technology to gain a competitive advantage. All the businesses in the study had annual revenues of more than $250,000. Head told us:
In the new education economy, knowledge is becoming a prized and valuable tool to get attention and attract new customers.
Small businesses that embrace online content marketing typically attract and convert new leads through educational materials such as blogs, ebooks, videos and tutorials. Once they start using knowledge for their marketing, they convert their followers’ interest into recurring revenue streams through a membership site. Head added:
An increasing number recognize that they have a revenue-generating opportunity once the demand for their content is established. They start giving away less free content and move their premium educational services to subscription-based membership sites.
Membership sites are websites that provide gated, permission-based access to educational content, including ebooks, videos, tutorials, articles and more. They allow subscribers to access services on demand or participate in online communities with other members. The membership site’s owner controls access to the content, which might entail a one-time, monthly or annual membership fee and free content.
Monetize Your Knowledge Using a Membership Site
With that in mind, we asked Head for his advice when it comes to membership site best practices. He recommends these six essential elements of a successful membership site:
1. Monthly Recurring Income
Small businesses with special expertise can generate recurring revenue by charging a monthly or annual subscription fee for access to valuable educational content. Simply load the information chosen to be shared with members, set the membership level pricing structure, and update the site according to the content model.
Billing occurs at the frequency that’s been defined, which helps in predicting future cash flow. As long as the content is valuable to customers, they’ll continue to pay for their subscription.
2. Lead Capture
Provide free access to some content behind the registration wall captures contact information that can be used in subsequent marketing.
3. Prospect Nurture
Once the prospect’s contact information is captured, nurturing can continue on the membership site by sending the individual more content and previews of premium content that encourages an upgrade in membership.
4. Customer Service
Updates and training can be provided as new products and services are released. This allows customers to gain access to common customer service questions without having to contact the company directly.
5. Product Introductions and Upsells
Increasing average revenue per customer is critical to business growth, and current customers are the best targets for additional sales. A membership site simplifies the introduction of new products and services and provides a low effort, low friction opportunity to recommend complementary offerings.
6. Modernizing Your Small Businesses
Jermaine Griggs, founder of Hear & Play Music, an online music learning center, uses membership sites to deliver training and tutorials to his growing community of music students. Using a membership site has allowed him to not only build a loyal fan base, but it has resulted in repeat sales increasing by 90 percent. His lifetime customer value also went from $90 to $375 and he reduced his work week by 60 percent.
“He’s a prime example of someone that’s succeeding in this new education economy by using membership sites,” Infusionsoft’s Head told us.
A Matter of Successful Growth
Small business success has always been a matter of making the most out of limited time and resources. With an online membership site and other Web based tools, small businesses with educational based products and services can elevate their unique value propositions and transform their operations.
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