Business growth

How to Overcome Challenges Scaling a Subscription-Based Business?

How to Overcome Challenges Scaling a Subscription-Based Business?

Nowadays, almost any business can use the subscription-based model to offer and bill its services, a personal training business included. While in the traditional (one-time selling) model a customer gets to perform a single purchase of the service, a subscription-based model is about receiving monthly or annual subscription revenue, which opens more room for planning and forecasting, and increases the lifetime value of a customer. 

However, numerous challenges might emerge during the scaling process of your subscription-based fitness business, and you need to be equipped with the necessary knowledge to be able to overcome them effectively. Below we discuss some of the most common issues that may happen along the way and offer some actionable tips on how to solve them.

Don’t Scale Too Fast

You should first check whether your business has a good scalability potential. Simply put, you need to be able to handle a more substantial workload while maintaining the same level of services you offer and be careful not to lose any revenue. For instance, you can offer a new type of training to your clients, hire an assistant, or expand your premises – these are all examples of scaling.

But if you scale too quickly yet can’t handle rapid growth, it could put you out of business. To avoid this scenario, you need to identify the profile of your clients, determine which marketing channels have the best ROI and the best prospects for scaling, and then set up your scaling budget accordingly. 

Establish Greater Cost Control

If you decide that scaling is the only way to go, keep in mind that taking care of your digital marketing, software installation, and other related costs will increase with every new customer you acquire. You need to determine whether the cost of customer acquisition is greater than your revenue. If you can’t get considerable revenue from a customer based on their lifetime value, then it’s not worth it. 

Don’t get tempted to invest in unnecessary gear, equipment, or bigger space either. As a personal online trainer, you probably work from your home and no one expects to see you surrounded by top-notch fitness equipment. The most important thing is to build a strong client base and focus on your marketing efforts at this moment so save upgrading for later.

Pricing Tiers Should Back up Your Business Goals

Various pricing models are usually shaped in a way to help you with further customer acquisition, increase the value of your existing customers and reduce your churn rates. Coming up with different pricing tiers for your services is anything but easy because you need to take different aspects of your service into account. You have to consider your service usefulness, offer discounts for bulk services, reward loyal customers, adjust prices if you want to acquire customers from specific areas, offer free trials, have early bird offers, etc. 

However, the most important thing is to start with a few, preferably two or three pricing tiers, and then incorporate more plans as you gather more data on your customers. When setting a price, don’t compete on it, and avoid positioning yourself as a low-cost service provider as this could potentially backfire. Remember, you’re offering a service that is bound to change people’s lives for the better and your prices should reflect this principle! Always choose to compete on quality instead of quantity.

Use different subscription automation channels to improve customer acquisition rates

Even though a subscription-based model is more about customer retention, and less about customer acquisition, it also has potential for the latter, and there’s no reason to slur over it.

Namely, all subscription-based businesses are competing on providing their customers with a seamless experience. Due to this, they use multi-channel support to make possible purchasing and billing their service both online and mobile. And with mobile activity from users continually breaking records, you shouldn’t hesitate to utilize this subscription channel to make the process effortless for your future clients. Make it intuitive and easy to use, this will lead both to a better user experience and higher acquisition rates.

The Billing Should Be Transparent And Accurate

There’s no denying that billing is far more complex for subscription-based businesses. Therefore, you need to set up the right billing system, the one with the power to generate bills that are accurate, transparent, and easy to understand. To that end, a billing system must be able to factor in different data when creating bills for your clients. This is one of the most important steps in building long-term customer relationships, so ensure you’ve picked and set up a billing system that will cater to your client’s needs.

Tap into Self-Service Potential

This understands having an online platform the clients can easily access, with a possibility to immediately subscribe to any of your services at any time of day. Further, they should be able to easily manage their subscription, download invoices, update their payment methods, upgrade/downgrade their chosen service, view orders, pause/resume their subscription, etc. This will create and deliver the best customer experience to your clients. Make sure you send them emails and messages if their credit card is about to expire, or right before you charge them with their monthly or annual subscription and this won’t go unnoticed.

Subscription Management Platforms Allow you to Analyze Key Subscription Metrics

One of the greatest things about subscription management platforms is that you can automate and streamline the entire billing process. You won’t need to hire accounting and marketing experts as you acquire more customers because these platforms have options to gather and analyze subscription data for you. For instance, you will be able to track customer acquisition and churn rates and then optimize your subscription plans accordingly. If you do experience rapid growth, you should employ an accountant to help you with this, to keep everything in check.

Superior Customer Satisfaction is Everything

Even though a stable customer acquisition process might seem imperative for every business out there, this doesn’t apply to subscription-based businesses. In this model, you depend more on your existing customers and the lifetime value they provide. Therefore, it’s only logical to have exceptional customer service and nurture customer relationships in the best possible way. To achieve that, you need to implement a good customer support system and be prepared to assist your clients if they have any complaints. Opting for reliable fitness software could prove to be essential for that since it’s perfectly scalable, you could work with more clients with equal dedication and still have your personal life!

What are some of the major challenges you’ve had to deal with as a subscription-based business owner so far? How did you manage to overcome them? We’re looking forward to hearing from you in the comments!

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