Since consumer buying habits are trending toward more simple and hassle-free shopping experiences, more and more companies are jumping into the subscription space and seeing incredible growth. Last year, Dollar Shave Club was expected to generate $60 million in revenue, nearly tripling its 2013 revenue. Even more impressive, Honest Company was expected to bring in $150 million in revenue in 2014, landing the business a $1 billion valuation.
The Dollar Shave Club are an incredible subscription success story, and they actually became a billion dollar company. By focusing on that recurring revenue model, rather than looking at becoming a simple retail store, they were able to build up a massive business at a huge valuation, with predictable returns and a dedicated audience of customers who were trained by the cyclical subscription nature of their business!
If you’d suggested that a subscription to razors would be a hit, even a few short years ago, it would have been unheard of. But today, it’s not only a distinct possibility in terms of your own pricing, it’s almost reaching the point where it seems crazy not to consider adopting that success story for yourself.
After all, that success story doesn’t have to be limited to a product company or a software company like Dollar Shave Club or Spotify — it’s a potential narrative for almost any company, whether it’s an agency or a hot tech startup.
The shift from one off purchases to subscriptions has changed everything, and every single company needs to be looking at it.