The Automatic Customer: Creating a Subscription Business in Any Industry

Thelifebloodofyourbusinessisrepeatcustomers.Butcustomerscanbefickle,marketsshift,andcompetitorsareruthless.Sohowdoyouensureasteadyflowofrepeatbusiness?Thesecret—nomatterwhatindustryyou’rein—isfindingandkeepingautomaticcustomers.Thesedaysvirtuallyanythingyouneedcanbepurchasedthroughasubscription,withmoreconveniencethaneverbefore.FarbeyondSpotify,Netflix,andNewYorkTimessubscriptions,youcansignupforweeklyormonthlysuppliesofeverythingfromgroceries(AmazonFresh)tocosmetics(Birchbox)torazorblades(DollarShaveClub).AccordingtoJohnWarrillow,thisemergingsubscriptioneconomyoffershugeopportunitiestocompaniesthatknowhowtoturncustomersintosubscribers.Automaticcustomersarethekeytoincreasingcashflow,ignitinggrowth,andboostingthevalueofyourcompany.ConsiderWhatsapp,theinternet-basedmessagingservicethatwaspurchasedbyFacebookfor$19billion.Whileotherservicesbombardeduserswithinvasiveadsinordertofundafreemessagingplatform,Whatsappofferedarefreshinglyprivatetoolonasubscriptionplatform,chargingjust$1peryear.Theirbusinessmodelenabledthekindofservicethatcustomerswantedandensuredautomaticcustomersforyearstocome.AsWarrillowshows,subscriptionsaren’tlimitedtotechnologyormediabusinesses.Companiesinnearlyanyindustry,fromstart-upstotheFortune500,fromhomecontractorstoflorists,canbuildsubscriptionsintotheirbusiness.Warrillowprovidestheessentialblueprintforwinningautomaticcustomerswithoneoftheninesubscriptionbusinessmodels,including:TheMembershipWebsiteModel:CompanieslikeTheWoodWhispererGuild,ContractorSelling.com,andDanceStudioOwner.comofferaccesstohighlyspecialized,highqualityinformation,recognizingthatpeoplewillpayforgoodcontent.Thismodelcanworkforanybusinesswithatightlydefinednichemarketandinsiderinformation.TheSimplifierModel:CompanieslikeMosquitoSquad(pestcontrol)andHassleFreeHomes(homemaintenance)takearecurringtaskoffyourto-dolist.Anybusinessservingbusyconsumerscanadoptthismodelnotonlytocreatearecurringrevenuestream,butalsototakeadvantageoftheopportunitytocross-sellorbundletheirservices.TheSurpriseBoxModel:CompanieslikeBarkBox(dogtreats)andStandardCocoa(craftchocolate)sendtheirsubscriberscuratedpackagesofgoodieseachmonth.Ifyoucanhandlethelogisticsofshipping,givingcustomersjoyinsomethingnewcantranslatetosalesonyourlargere-commercesite.Thisbookalsoshowsyouhowtomasterthepsychologyofsellingsubscriptionsandhowtoreducechurnandprovidesaroadmapfortheessentialstatisticsyouneedtomeasurethehealthofyoursubscriptionbusiness.Whetheryouwanttotransformyourentirebusinessintoarecurringrevenueengineorjustpickupanextra5percentofsalesgrowth,TheAutomaticCustomerwillbeyoursecretweapon.