Inflation proof. Inflation resistant. Inflation safe. These terms are everywhere in today’s economy, and can be extremely stressful for entrepreneurs. You want to remain accessible for your customers so you can continue to grow, but your costs and margins are far from inflation safe. What do you do?
There is one business model that can help protect your business from inflation, and keep your bottom line going up and to the right: the membership model.
Dion's a surf coach and philosopher currently making over $45,000USD annually on Subkit. His growth isn’t slowing down, even in the current bloated financial state. His observations on why the subscription model will continue to thrive as peoples’ priorities shift with inflation are bang on:
“I think during inflation we're seeing the same trend we saw from the start of the pandemic: people are more willing to spend money on education, community, and experiences than physical products. If I can be more efficient with my time and more successful in my habits I'm going to feel more bulletproof against whatever life throws at me, including, and especially the aging process. People are willing to pay more than a little to optimize their time on earth right now, and if the optimization is affordable (like in the subscription model), all the better. Also, of course, if it's virtual, if they don't have to leave their own homes or phones to get the info, all the better still. We'll see people even cut back on travel while gas and airfare is so high to focus on bettering themselves at home and on their experiences where they live. Subscriptions help make this possible.”
Beyond Dion's astute reasoning on the value of subscriptions, here are some other reasons why the membership model is for you, especially during inflation.
Chop it up
If your core offering as a solopreneur is a high ticket item, it might be the first to go as your clients adjust their budgets to this economy. Things like e-courses, consulting, coaching (wellness, nutrition, fitness) are at risk these days. Change how your client thinks about your offerings by breaking it down into smaller monthly purchases. With today’s inflation rate, you don’t need a master class… you need a master plan. A subscription plan.
By chopping up your offering into bite sized monthly occurrences and giving them a discount they save month to month, and the relationship lasts longer with you earn more over time. Everyone wins.
Check out Subkit’s playbook on how to easily turn the work you’re already doing into inflation resistant recurring revenue.
Start small, think big
Costs to create products through the roof? Still have some loyal customers but they’re not spending as much on pastries, coffee, flowers, etc. these days? Diversify what you do for your community!
Similar to our chop-it-up model for coaches, Subkit highly recommends taking your core item and making it a membership. Whether you make bread, bouquets, whatever: take that and make it monthly. No extra bells and whistles, just have your core customers commit to you month after month. They love your products, they love you, and once you add a discount (Subkit recommends 15-20% off for subscribers), they’ll see they’re saving while supporting you regularly. Since the relationship is consistent and lasts longer, you earn more overtime. Everyone wins.
Beyond turning customers into subscribers to help you grow during uncertain times, we also recommend thinking bigger. Diversify. Content (expert monthly newsletters or videos with recipes or how-tos) or monthly education subscriptions are a great way to supplement income. You are more skilled than just physical goods, and have lots to offer your community! If goods are the core of your business, start thinking about what else you can put out into the world with your business that could be a lucrative recurring revenue stream.
Little raises go far
Your day to day is far from inflation proof. Your rent, your materials, your cost of labor and more are going up daily. You absolutely need to raise prices.
The good news is that raises are less jarring to customers when they’re smaller, and the membership model allows you to raise prices in small sums and still pay yourself a lot more. Think of it in bulk. Because you have many subscribers and they are paying you month over month, it adds up in a more meaningful way for you.
You're not big business (and that's good)
The great unsubscribe is about big business, not you. Inflation is illuminating the widening financial inequities between the big guys like amazon, netflix, peloton, etc. and us mortals. People are unsubscribing from funding CEOs space races, but are still hooked on the subscription model. It’s convenient, it creates accountability and comes with discounts. What’s not to love?! By making a subscription yourself you’re helping people put their money where their mouth is and support small, while keeping it convenient.
Create a subscription on Subkit and help your community subscribe small and support local. They’ll feel good about themselves, be accountable to being your returning customer or client, and most importantly, you’ll not only be making a steady new income stream during inflation, you'll be growing.