Making your way to this article where I discussed the subscription business model in Nigeria is a clear sign that you’re a wealth creator. Or you have an idea on how to build long-lasting wealth.
Let’s dig deep into what the subscription business model is, for the benefit of all.
What is Subscription Business Model?
In a simple term, it’s a business that is structured for customers to be paying periodically. In other words, it is called a recurring business model or membership business model
Mostly, it’s a service-based business. Though, some products can be marketed this way. The subscription periods could be daily, weekly, monthly, quarterly, semi-annual, and annually.
The duration of a subscription largely depends on how you want it, as long as people are ready to subscribe.
There are two-phase to this business model. The first is that you pay attention to acquiring customers from the beginning, while the second phase is that you must pay more than usual attention in retaining the customers.
Customer retention is paramount when it comes to running a subscription business model in Nigeria.
Examples of Subscription Business Model
Let’s start with your living room. Do you have a DSV, star times, or GOTv decoder? If yes, then you are subscribed to their monthly service of providing you with channels of your choice.
Still in your house, do you have a phone with MTN, GLO, 9mobile, or Airtel SIM? If yes, you’re subscribed to their services of providing you airtime to make calls or date for browsing
Are you a registered member of any GYM around you? If yes, you subscribed to their monthly, quarterly, or yearly service of providing you with the right equipment and training.
Are you taking any online course that requires you to pay monthly to continue learning? If yes, then you are a subscribed member to the owner.
There are endless examples of this type of business model. The reality is that you can do this type of business on any type of product or service once you know how to retain your clients over a long period.
How to Start Subscription Business Model
Never think of starting or innovating anything new to acquire recurring paying customers. However, if you have an innovative spirit, you can go ahead.
But the best way to start a membership business model is by tapping into an existing one. The giant companies that are into this model of business have an opening for individuals that are ready to tap into it.
For instance, you can get licensed from DSTV, GOTV, or Star times to render their services in your locality.
This means that you can help them service their customers while making your money regularly. Think of having an outlet where people will come and renew their television subscription monthly.
Also, the telecommunication companies such as MTN, GLO, and others allow individuals to transact business on their behalf, not in their behalf. This means you can start a rechargeable business in your locality where people will subscribe to your services.
The Steps on How to Start Proper
You must start by having an in-depth knowledge of the business. And to do that, you must be trained or mentored by someone who is successful in the business. No matter how simple a business may look, never go into it without the right training or mentorship from a successful person in that field.
Do feasibility study. Take your time to analyze the population of the people in the area you want to situate the business. Also, ask people around if they will be willing to patronize anyone with such business around them.
Register your business either as a limited liability company or as an enterprise. This is a prerequisite for starting this type of business and any serious business in Nigeria
You need to sign up with the major producers of the services or products before having permission to carry out this business model. Signing up in most cases entails registering with the companies with some amount of money as a deposit or commitment fee.
Subscription Business Model Pros and Cons
Once you have a good system in place, you can predict the amount of money you can make within any given period.
Good Customer Relationship
It is a known fact that repeating customers are the lifeline of every business. Therefore, having a membership business model increase the relationship between the subscribers and the providers, which always yield a positive business growth
With a sizable number of clients, it requires little amount of money to keep the business moving.
High Need for Varieties
It comes with a lot of need for varieties. This means you must be on toes always to give or provide your clients with varieties in term of pricing, services and many more.
The subscription business model is a very competitive field. Therefore, demand a high level of attention and vigilant to meet customers demand, else you lose them to a better offer
If your aim of reading this piece is to find a subscription business model to venture into, I will strongly advise you to go on because it is usually rewarding.
But, I will not fail to tell you that like every other business, it is not an easy ride. You must be ready to put all the efforts needed to start and run a successful business in Nigeria.
Also Read: 2 Untapped Business Opportunities in Nigeria
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