There have been lots of heated forum discussions around the topic of continuity. The vast majority of people who participate in these discussions are keen to express their distaste of the continuity model as if it's something completely new.
I don't want to burst too many bubbles, but the continuity business model has been around a very long time.
I can remember when I was around seven or eight years old, yes that's nearly half a century ago.. there's no need to rub it in!
Anyway, even at that young age, I was very much into reading and my parents were keen to encourage me. Every month I received a brand new story book. I really looked forward to receiving those parcels, tearing off the wrapping paper to see which book I'd received. They were great stories of adventure and I thoroughly enjoyed them.
Getting back to the point...
My parents had signed up to a "Children's Book Of The Month" club. They paid a monthly subscription and the arrangement was that they would continue to pay that monthly fee until they cancelled.
Many organisations use the same payment structure.. Reader's Digest, Franklin Mint, are just a couple that immediately come to mind.
And, while the offline world benefits from using the continuity model, the Internet offers a much wider range of possibilities including much more potential to automate the billing and fulfillment processes.
In fact, this membership blog is based on the continuity model, as it uses the PayPal subscription facility to automatically collect monthly payments from Premium Members. That means that I can concentrate my efforts on providing great content without having to spend time collecting cash.
One of the greatest advantages of the continuity model can be seen when you consider the cost of customer acquisition.
When you sell a single product, your advertising and marketing costs must be deducted from the sales price to determine your profit.
When you sell a membership, or other subscription, your advertising and marketing costs can be deducted from the lifetime value of the subscription.
As a seller, I'm sure that you'll appreciate that it costs far more in terms of time, effort and budget to sell a $97 information product than it does to sell a $9.97 product. As a buyer, I hope you'll agree that investing $9.97 is an easier decision than spending $97?
There are several benefits to the buyer too..
- The investment is made in small multiple payments rather than a relatively high one-off price.
- The cost can be budgeted for in advance.
- The cost of access is much lower, thus reducing the risk.
- Subscriptions can be cancelled at any time.
- Content is delivered in smaller easier to "digest" bites.
So, when considering your next product, think about the cost of acquiring a new sale and compare the numbers.
John,
(What a beautiful blog you have here!)
Some people forget many business models online came from offline. Great reminder.
It makes a lot of sense to have a recurring membership and I am sure you will do well. I'll be watching your posts for golden nuggets as I set up my own membership.
Regards
James
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James,
Thanks for your feedback. Let me know when you launch your new membership.
John
Hi John
Thought provoking post. I think continuity receieves bad press when it is hidden behind free or small value trials, without being clear there is a continuity programme behind it.
I see nothing wrong with the model when it is upfront and clear. In fact, your post had given me several ideas
Cheers
JJ
Hi John,
Nice post. I'm even older and remember the Book of the Month Club, which I think was the first large direct marketing continuity program. But even the insurance companies used to use the $X a week model back in the 20s.
I agree with JJ. Some of these newcomer "gurus" seemed to feel guilty about having a continuity program behind their free offer so they tried to hide or disguise it. Of course that was deception and soured the whole market. It's best to be honest and upfront. People will respect you for it and those that want your product will subscribe and stick with you longer.
Blessings, Steve
@JJ & @Steve,
I believe it's absolutely imperative that we are up-front about what we are offering. I'm a great believer in openness, honestly and transparency.
Anyone who thinks that tricking someone into a forced continuity programme is good for business is only fooling themselves.
These days, your online reputation can be enhanced, or destroyed, in a heartbeat on sites such as Twitter, Facebook, MySpace, the increasingly popular review portals and the top forums in your chosen niche market.
The power these days is with the consumer, the smart marketers already know this.
John
Sincerely business owners focus too much on traffic rather than improving conversion and increasing LTCV (Life time customer value)
Great article!
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Hi John,
Great post, and oh you bring back the memories of those good old days. I think it is the term "Forced Continuity" that makes most of us dislike it.
Also the tactics used to have "Forced Continuity" there are many tactics that marketers use to so call deceive people into these recurring payments.
I myself agree in the recurring payment for many reasons already explained and am building such a site right now...
However it is the tactics being used that give this great model a bad taste to some people.
The one "continuity" aspect that people often ignore is their own list. You don't need a monthly subscription when you have a targeted list. With a targeted list, it's as easy as sending out a friendly recommendation email and orders appear.
Yeah, I do recommend a membership of some sort as it's easier to predict and forecast future monthly income...
But...
Never forget the power of a highly targeted list.
Jason Anderson’s last blog post..$300 INSTANT Commissions…How to make ‘em