Wednesday, March 11, 2015

Automatic Customer Book Review - FOUR STARS : BUY & STUDY premier into the emerging Subsription economy

Synopsis: If you are in a service biz or work with technology – BUY THE BOOK to learn the new language and math of business! This would have been an even more powerful book had the author walked you through the process of selecting the right models for your industry in a step by step way. However given its an emerging model, its a survey course on possible models, and anyone with a lil discipline will be able to put together some interesting pricing and subscription models.

Synopsis: Subscription Biz models are here to stay in everything from software, to content to household consumables.

The author has listed 9 specific models/approaches to take:

  1. Membership Website Model: Works best in a tightly defined niche with specialized knowledge is needed
  2. All you can eat library model: Evergreen content is an example. Think netflix – even the most addicted watcher could not go through it all
  3. Private Club Model: Limited supply being sold to an affluent clientele. High prices, low numbers
  4. Front of the line model: Different prices for different levels of service/support. works best on complex products/services.Think’s model for how your complaints are dealt with
  5. The Consumables Model: Selling products that naturally run out as a service, where ordering things can be a chore. Food, blades, vitamins e
  6. Surprise Box Model: when you have a network that is willing to buy deeply discounted consumables from manufacturers at deep discount. The idea being some of the consumers will then order a subscription service at regular prices.
  7. Simplifier Model: Its a complex word, simply the buying process and choice. Works best with an affluent consumer needing a service on an ongoing basis
  8. Network Model: fixed price, and value of service grows as number of subscribers grow. Think phones
  9. Peace of Mind Model: this is the insurance sale , where you pay for a peace of mind in the event you may need the service.

He closes the book out with the new math of the subscription game with concents such as Customer acquisition cost, Monthly renewal rate, Life time Value of customer, Margins and Churn.

The book is a good way to think about what models will work best in your industry / Excellent premier.

If you are in a service biz or work with technology – BUY THE BOOK to learn the new language and math of business!

Mahipal Lunia

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