Monthly Recurring Revenue

A few years back, when I started offering subscriptions to our clients (we call them Time Saver Plans), I had a blind spot. I didn’t realize it would be more challenging to periodically raise prices with the subscription plans than it is to raise per item prices.

We raise our regular prices twice per year on individual clothing and household items. Once in April and again in October. We raise the prices going into the busy seasons of spring and fall so that we get the added benefit of the higher prices. We never announce these per item price increases and we usually raise them 3-5% every six months.

Our monthly plans are a little bit more challenging. Our subscriptions vary from a low-level discount plan to a run-of-house all included plan. I believe price increases to subscriptions need to be announced ahead of time since we have a recurring payment that we charge to their card each month.

Before last week, it had been over a year since our last increase. I got over my fear of everyone quitting their subscription and pulled the trigger on a 20% increase to all plans last week. This made me very nervous. We announced it by text and email to all enrolled clients.

Here’s what is interesting… out of the hundreds of clients who have a subscription with us, only one client said no to the rate increase. Wow! That tells me our clients really appreciate the subscriptions. It gives them certainty in what they pay each month and what deliverables and benefits we provide each month for that investment. They are extremely price elastic – meaning they will stick around even when the price goes up (in this case 20%).

Most people in our industry don’t have the guts to offer subscriptions. You want to be FIRST in your market to offer them. You don’t want to be last to the party.

Check our plans out here: https://inthebagcleaners.com/time-saver-plans/

Shoot me an email if you would be interested in learning more about how to create a subscription plan for your market at: dave@maverickdrycleaners.com

Creating monthly recurring revenue is one of the best things you can do for your business. But get help from someone who has already done it and learned how to set it up correctly. This will help you shorten your learning curve.

Have a great week!
Dave