Recurring Revenue System for Marketers
As you embark on your journey of making money online, you are going to be presented with different options for how you can bring in those profits. Some of them will require more work than others.
As an online entrepreneur, your goal is not only to generate an income, but one that is predictable and sustains your lifestyle as you grow your customer base. With a recurring revenue stream, you will get to enjoy ongoing payments that are coming into your bank account.
Once your systems are in place, you’ll get to focus on the generation of new leads as well as customer retention while you slowly scale your business to create more revenue for you.
One of the biggest problems many online entrepreneurs face is that their income has too many fluctuations. One month they are well above their financial goals, and the next month, they’re struggling to meet their basic needs.
By having a more predictable and steady recurring revenue system in place, you’ll be able to count on a certain amount of money each month, which takes the pressure off of you and allows you to provide increased value to your coveted customers.
This is a system that works best for people who are committed and determined, not those who are unsure and continually moving on from one idea to the next. You have to be invested in your success and in keeping your customers loyal to your brand.
Below, we are going to dive into the recurring revenue business model, so that you understand what it means, how to develop one of your own and set it up, market it, and then grow it into something more that can contribute to the type of lifestyle you hope to lead.
Different Types of Recurring Revenue Streams
Before we begin talking about how to set one up and plan one, let’s look at the different types of recurring revenue streams you can generate online. There are basically three different forms of recurring revenue.
The first one is a subscription based model, where people subscribe to your brand through something like a membership where they gain value each month. As long as you are performing for them and meeting their needs, you can secure your income with minimal drop offs.
The reason many consumers enjoy belonging to an online membership program is because they are a part of a community where they can connect with each other, ask questions of you, and even support each other in their goals.
They also like receiving ongoing value from someone they know and trust. They get to look forward to new information such as courses, templates, and other elements of content that meets their needs.
You can also offer different tiers of subscriptions so that people can choose one that fits their budget. When promoting this type of recurring revenue stream, you can offer a free trial to prove value before they make a commitment and drip teasers out to non members so that they can get a sneak peek of the type of value that waits for them inside.
The second type of recurring revenue business model is licensing. With this type of option, you are going to charge your customers for the right to use a product for a specific period of time, where it renews each month, quarter, or year.
Many online software developers use this type of recurring income model and the price is more attractive for a longer commitment, such as purchasing annual rights rather than monthly.
With this type of business model, you can have other ways to earn from it, such as charging for a single user or multi user license and having tiered licensing where they can access different functionality or features.
Digital product models with recurring revenue are the third option, and this allows you to bill customers on a regular basis for the of your product. So if you develop a product that is cloud based, such as storage or a product such as an artificial intelligence tool, keyword research tool, etc., you can charge customers for using what you created.
If you think about it, you are probably using this type of business model as a consumer. For example, if you have an email autoresponder system, you are likely paying a certain fee each month for the number of subscribers you have, which increases the more people you get on your list.
Or, you might be paying OpenAI for access to ChatGPT plus. You pay each month for the use of that tool, and as soon as you stop paying, your access goes back down to the free level or stops altogether.
The great thing about this type of revenue model is that customers only have to pay for the level that they are using, so they see it as a fair deal, where their price is less when they are using the product less.
As your product is proven to be useful to them, and you entice them with elevated features and perks to different levels, they can upgrade and contribute more to your recurring income stream.
Developing Your Recurring Revenue Funnel
Now that you know what options you have available to you, let’s talk about you developing your own funnel of recurring revenue. The foundation of your business is going to be to develop a funnel that is irresistible to prospective customers.
They are looking for a few things from you. It starts with the value you can provide to them. How is your product or membership going to change their life or solve a problem for them in a unique way?
Secondly, you have to think about pricing. You can have one price if you want to, but it’s often better if you can devise a way to have different tiers of pricing so that you can attract people and separate budget groupings based on their needs, where you charge people more if they need more from your product or membership.
You also have to consider bonus perks. For example, you might have an early bird launch discount for when you bring the product to market. Or, you might have exclusive member only bonus downloads.
You also have to think about the issue of customer retention. It’s not just about how you’re going to get people on board, but how you are going to keep them subscribed so that your income doesn’t fluctuate month to month.
Part of how you’ll do this is by continuing to deliver value to them and not just meet, but exceed their expectations. For example, you might have a live webinar from time to time where you allow them to interact with you and ask questions or you might release a case study that is exclusive to people in your membership.
Think about your funnel and how you are going to implemented online. It’s going to start with the attraction process, where you are publishing content that brings people to your blog or social media accounts and presents the free lead magnet that gets them on your list.
Next, you’re going to nurture those prospects via email marketing so that you can prove the value you offer to people, and help them let their guard down so that they are more open to signing up for a recurring payment system.
You’ll then present them with your offer, whether it’s a membership for ongoing courses, some sort of licensing, or the use of a product and you will need to not only include a strong call to action to help it convert, but also incentivize them with bonuses and options such as price tiers that can meet their budget.
In most cases, consumers don’t like to be left on their own, and it’s easier for them to disengage with your brand if they have no connection with you. So anytime you can have a live stream, webinar, or Q&A series with them, it helps to build that dedicated relationship that makes them want to keep being a customer.
Building Your Recurring Revenue Model
Think about how you are going to earn money from this concept. You have probably already chosen one of the three recurring revenue business models. The next step is for you to pinpoint who your ideal customer or general target audience is.
Not only do you need to understand the basic demographic information such as their age, gender, location, income level, etc., but you need to know more psychological and behavioral elements that tell you more about their pain points, preferences, and challenges.
Keep in mind that this is not a one time process for you. As a business owner, it’s up to you to understand how your customers journey will evolve over time. Their needs will change, and you have to be able to deliver something that addresses that transformation.
When you are building your recurring revenue, you never want to over promise and under deliver. You have to be realistic about timelines and how often you can publish or develop features for something so that you are not disappointing them.
It’s important that you maintain open communication with your customers and don’t disappear on them like so many online entrepreneurs do when they start sliding in their responsibilities.
Think about how you are going to price your recurring revenue system. Typically, there will be some sort of value based pricing that allows people an entry level onboarding arrangement until they feel comfortable with the value you can provide to them.
That’s why it helps to have tiered pricing, where you can cater to people who have elevated budgets and increased needs for core functionality or advanced features and support.
You have to think about what type of tools you will be using, such as a CRM (customer relationship management) tool that houses customer data and facilitates the management of their subscription.
In order to help you maintain good customer retention and continue delivering to their needs, you’ll also want to have a good analytics system in place that can tell you more about customer behavior and what you can do to improve things such as your churn rate, cost of acquisition for each lead, etc.
Because you will have a system set up where people are subscribed, you’ll want to have a solid security system in place that protects customer data. That means ensuring privacy and backing up your system regularly.
Make sure you are looking at any type of technology that can help you with running your recurring revenue system, and even automating it wherever applicable. This will make your system streamlined for success.
Marketing Your Recurring Revenue System
Your next step is to think about how you’re going to market your recurring revenue system. You want to be attracting your prospective customers and enticing them to become subscribers, and that begins with a targeted marketing campaign and customer segmentation.
Think about how you want to differentiate your customers, whether it’s by specific interests, pain points, budgets, etc. You may want to sit down and develop a buyer persona for each segment of your business so that you can better understand their needs and what they are looking for.
This helps you tailor your messaging within your content, whether it’s on your blog, social media, or elsewhere. For each audience, you need a compelling message that communicates the heightened value you are going to be delivering to them whenever they sign up for your recurring system.
This should be a benefits driven list of features that translate into perks they can understand for their own life. You need to showcase the transformation that will take place whenever they become a member or user.
You’re not just positioning your brand as one that is attractive for their needs, but your position yourself as that trusted leader and guide who will help them achieve their goals within the community of your recurring income system.
In addition to content marketing on your blog and social media marketing where you relay the value you will be providing to your subscribers, you can also use live events that are open to the general public and get people on your list using a value pack lead magnet so that you can cater to them directly via email.
Scaling Your Recurring Revenue Income
Your next step in the system is to think about how you’ll scale the growth of your business. There are different ways to do this. We’ve already talked about tiered pricing, where people will level up over time.
You can also scale your earnings by enticing affiliates to promote for you. Many affiliates love promoting recurring income products because it contributes steadily to their monthly income, too.
You’ll want to approach the best fit for affiliates and set them up with an offer that helps them promote easily – such as giving them swipe file emails, a launch discount perk for their buyers, and readymade bonuses they can use to close the deal.
You can also use other income models to promote to your existing members. For example, you might have strategic ads placed within the membership where you can earn ad revenue or money as an affiliate.
Expand your content marketing efforts, too – so that you reach a wider audience of prospective subscribers to your membership or product. You might co-host webinars with people who have a similar audience and approach them for reciprocal guest blogging opportunities.
Think of what you can cross-sell and upsell to your members and subscribers. They’re already paying an ongoing fee, but you might develop (or find) courses and other tools that also meet their needs in different ways.
If they can get some sort of perk for buying it, you’ll expand your earnings easily. You might secure a discount for them, create a bonus, or do a case study inside the membership for those who sign up.
Try to automate as much of the processes you set up as possible. This frees you to create more value for your paying customers and do more lead generating. Automation tools (like those that cross-post across social media platforms for you) are beneficial in alleviating your daily tasks.
Examples of Recurring Revenue Models for Marketers
Before you get started, let’s go over a few examples of some recurring revenue models you might consider. Let’s say you want to be in the weight loss niche. You could have something like a Weight Loss Membership.
Customers get a monthly weight loss program with meal plans customized by a dietician, workout routines generated by a certified physical trainer, access to an exclusive community (which is important with this niche), and live Q&A sessions each week for increased motivation and support.
Plus, you could host ongoing challenges and have people pay to participate. Members of your community could get these at a discount if you wanted to make them available to everyone.
With licensing, if you’re in the online marketing niche, you might license a training program such as an AI Training Masterclass. You could license the course itself, any software integration (like a custom GPT), and provide training and support.
With a digital product they pay to use in the online marketing niche, you might have a tool that repurposes social media content and publishes it across different platforms so that each one is optimized.
This would be a monthly subscription, but you could have a free tier with basic features like idea generation and schedule planning, a level 1 tier with the ability to cross-post only, a level 2 tier that repurposes and cross-posts, and a top tier that does all of that, plus the option for collaborations, high volume use, and an account manager at their disposal.
Generating recurring income is a more attractive option than just having one-off sales where you’re constantly having to try to get someone to buy something new from you again.
As long as you focus on the audience’s needs and providing value and solutions for them, you’ll develop a brand that’s known for customer loyalty and your business will grow with ease.