One of the most common ways that subscription services attract new clients is by offering a free trial of their services. One of the best examples of this is Netflix who offer a free month’s subscription to their film and television database for all new clients. While this is an attractive offer for customers, for some businesses this can be too expensive.
For instance, a business that ships expensive food or clothes should not offer a free trial as they are likely to lose a lot of money when sending out free products. Alternatively, those where clients might only need to use the service periodically might find their free trial offer is abused. Clients might sign on for a free trial, use it for a month and then leave. Then when they need the service again, sign up for another free trial with different details to get more time free.
Therefore, some businesses need to consider other options for attracting new clients without giving away their services and losing too much. But what are the options for subscription services and how can you ensure that it is still profitable for your business?
1. Reduced Rate
Another common option for subscription businesses is to offer a special discount for new customers for their first month. This is usually very good when there is a physical product involved or a customer could use the whole system in a short period and then quit. One example would be a membership site offering a period where they reduce the membership rate. After a certain period it would raise up again to normal pricing.
2. Free Gifts
Offering to give out small gifts for signing up is another common tactic for attracting new clients. This tactic has been in use for a number of years by those in the insurance industry by offering free pens, toys and even televisions.
The biggest issue with this tactic is that you have to be certain that the free gift you are offering is less than the average customer lifetime value. Otherwise you might need to put in some strict terms and conditions to determine who receives the free gift. For instance:
- Do they need to be a member for so long?
- What level of membership do they need?
- Do they need to sign up before a certain date?
- Will you allow those who are signed up by affiliates to claim the free gift?
At the same time, you need to consider how the gift is delivered and what if there is something wrong with it? If the product is a television, for example, and it breaks after six months – will you be willing to repair it?
3. Affiliate Links
Another opportunistic way to attract new clients is to use affiliates. Affiliates market your subscription services for you, in return for commission when someone signs up. This can be highly effective because an affiliate builds trust between their audience and themselves, which is one of the key steps in achieving a sale.
By offering affiliates a commission, you are allowing them to endorse your product to their contacts. This will be more effective than you marketing to them without any prior contact.
However, this can reduce your profits significantly, especially for the first payment, so ensure your pricing model supports an affiliate commission.
If you want your business to grow you’ll have to attract new customers. Most businesses use a free trial, but this is not always the best option. Therefore, consider some of the options that have been highlighted above. By using these you’ll find more clients and not have to worry about giving your product away.
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