I spent many years in my early career selling software. After some years, I graduated to selling large, expensive software deals that could give me enough commission for a flat deposit in London.
It took months to bring in these big deals and as soon as I had brought one in, I had to go searching for another one. I would go from earning nothing for several months, to feeling like I had won the lottery, then to struggling to pay my mortgage again. And if one or two deals didn’t close, was in danger of being fired by my boss, my wife, and my bank manager!
One company I was working for decided to adopt a ‘software as a service’ model. This meant that the clients would ‘rent’ the software every year rather than buying it. Instead of paying a million pounds up front, and then a fee every time a new version came out, the client would only pay two hundred and fifty thousand pounds upfront but pay it every year.
I was devastated as my commission dropped off dramatically in the first year. However, as the client investment upfront was smaller, I was made more sales. In the second year, my commissions picked up dramatically as I had clients renewing with minimal effort on my part to add to the new clients I was signing up. By the third year, I earned even more commission than I had with the big one-off deals.
I have many clients who only created big one-off products. With my help, they have converted some, if not most, of their products to a subscription model whereby their clients pay them a monthly fee. They can now properly plan their finances as they have regular, predictable income coming in.
Think about what products you have that you could turn into a recurring revenue model. It doesn’t have to be a membership site; you could do monthly reports, monthly coaching, newsletters, or literally anything.
Forget about just Spotify and Netflix; some companies offer subscription services for cars (Porsche, Hertz), private jets (Surf Air), home maintenance (Super), and even razor blades (Dollar Shave Club). Did you know that Gillette bought Dollar Shave Club for $1 BILLION!!!
It is probably a good model to follow.