This article is part of a bigger picture. A chapter from my upcoming book "The Best Things".
In this short read, I delve into the obscure but vital role that free trials and other free-paid marketing strategies play when looking to grow your subscription business.
Although I have written and published over 40 books, I wanted to try something different with my next book.
I will be making this and hopefully other books available on NFT Books, a (still in the works) platform that aims to help authors publish limited, digital versions of their books.
Full disclosure: I am an investor in this project.
Warren Buffett, legendary investor, and chief of Berkshire Hathaway once remarked that based on his years of experience investing in both private and public firms, what he saw as the greatest risk to the long-term success of any business is typically the person, or persons running the organization.
This idea may seem a bit provocative to some. Perspective also plays an outsized role in how this concept sits with you.
If you have ever worked with entrepreneurs as an investor or even as an employee of numerous startups, you know exactly what Warren is talking about here. You have probably watched (over the years) as great ideas, resources, and once-in-a-lifetime opportunities have been squandered as a result of personal attitudes and egos.
In other words, those who run a company, or companies into the ground (often) never think they had anything to do with it.
Charlie Munger, Buffett’s longtime partner immediately, through easily discernible body language, concurred. This risk, according to Warren, is often an unseen one.
Form S-3: Risk Factors
As he struggled to find the words to describe the specifics, in Wall Street parlance, of what he was trying to say, in true Buffet style, he just came out and said it as plainly as only he could:
“The thing you don't want to have is some guy or gal who does not know what they are doing running a company. And because they may have a personality the board likes; this person is allowed to continue to make bad decisions”.
I am of course paraphrasing a bit here. My point, however, is that offering value and thinking of ways to leverage your value proposition to attract free users to your subscription business must start with you and your team.
Your organization’s ability to seek out, invest in, and leverage value will start from the general attitudes prevalent within the top ranks of your firm.
Perpetual townhall meetings
In my humble opinion, the first step to offering value is going out of your way to put yourself in the shoes of your current and would-be customers.
You will have to set up a system, or various systems and processes, where you and your firm solicit advice and opinions from the very folks you want to have as long-term subscribers of your product or service.
It also helps to do vigorous outreach to those who once were, and are, for one reason or another, no longer subscribers.
The main idea behind these various steps is to get a big-picture view of your audience. To try to get a clear understanding of ways in which you can improve your subscription service to not only be attractive enough to get folks into the free-trial matrix, but to also help create long-lasting relationships with the subscribers your firm already has.
Customer promiscuity
Through all the hard work you and your team (hopefully) do, you will be able to, no doubt, amass a large treasure trove of intel. You will have all types of data points that will help you better understand your customers and your larger audience.
You will come to learn their needs, even outside of your subscription product. You will learn the many ways in which your product stacks up when compared to your closest competitors.
Let’s face it, your customers, and former customers, used and/or are currently using similar offerings from other companies in addition to what your company is offering.
I know. You thought you were the only one in their lives, huh? Been there, done that. Think of it this way: Most folks have, in addition to their Netflix subscription, Hulu, Amazon Prime, HBO Max, and so on. I know I do. I even have a YouTube TV subscription which I am yet to actually watch.
I have a buddy who has a couple of gym memberships. He tells me he uses his Planet Fitness membership when he is traveling, as he does a lot for work. This is convenient since the PF monthly payment is relatively cheap and the company has locations all over the world.
When he is at home though, he uses his local, one-off gym. If you ask me, I think he goes to PF for the women. That’s just my opinion.
As an entrepreneur and business owner, especially one who operates in the subscription business arena, it is critically important that you learn to leverage this inevitable phenomenon to your advantage. In most cases, Customer promiscuity cannot be avoided.
An open and honest dialog with your team, yourself, and customers will help you understand and meet the needs of your customers in ways that help you stand out among those in the same space as you.
Like a jealous sidepiece, although you may never be the main one, your goal is to gain more and more of your customers’ attention and dollars as time goes on. To do so, you must first have an in-depth understanding of what the competition does (for your customers) better than you.
The Next chapter
This article is part of a bigger pitcure. A chapter from my upcoming book "The Best Things".
In this short read, I delve into the obscure but vital role that free trials and other free-paid marketing strategies play when looking to grow your subscription business.
Although I have written and published over 40 books, I wanted to try something different with my next book.
I will be making this and hopefully other books available on NFT Books, a (still in the works) platform that aims to help authors publish limited, digital versions of their books.
Full disclosure: I am an investor in this project.