Episode 309: A quick way to make more money
In this episode, Fiona discusses the concept of recurrent revenue and its significance in stabilizing businesses. Fiona shares a personal experience, provides strategies for implementing recurrent revenue models, and highlights the importance of post-purchase marketing and customer retention. Tune in!
Topics discussed in this episode:
Introduction
Recurrent Revenue and its importance in stabilizing a business.
How businesses can set up their backend systems
Examples and strategies for different types of businesses
The importance of post-purchase marketing
Nurturing customer loyalty through incentives and rewards.
Benefits of recurrent revenue in achieving financial stability for a business.
Retention and Churn Rate
Analysing customer data to identify opportunities for recurrent revenue and customer retention.
Conclusion
Get in touch with My Daily Business Coach
Resources and Recommendations mentioned in this episode:
Welcome to episode 309 of the My Daily Business podcast. Today, it is a quick tip episode and this tip is about making more money. I know that for so many small business owners, that is something they would like to do right about now. I have to say, this tip comes from an email that I received three minutes ago and that just won me over. I'm going to share that with everyone through the podcast. Before I get stuck into that, I wanted to remind you that we have recently rebranded and we have a few more goodies in the shop. If you're looking for a 90-day content calendar so that you can stop thinking about what to post and just have it all laid out for you. If you are thinking of a one-off coaching session or maybe a How to Start a Podcast course so you can have your podcast, you can find all of that over at mydailybusiness.com/shop.
The other thing I want to do is to acknowledge the traditional owners and custodians of this land on which I record this podcast. And that is the Wurrung and Wurundjeri people of the Kulin nation and our pay respects to their elders, past and present and acknowledge that sovereignty has never been ceded. Let's get into today's quick tip episode.
I should just also say that I know I sound like Marge Simpson's sister right now, and that is because I am recovering from a bit of laryngitis. I have a lot of sinus problems. Not great when you have a podcast, but sorry for the croaky voice. Today I mentioned at the start of this that today's episode is about getting more money. Please don't switch off and be like, “That's not my business. I could never do that.” There will be a handful of businesses that can't do this, but I guarantee you that if you look deeply if you look at the gaps, if you test an experiment, this is possible for pretty much every business. I have worked with hundreds of small business owners, one-on-one in coaching, and I've worked with thousands more in masterclass and workshops and all the things.
I know that this is possible. What am I talking about? I'm talking about recurrent revenue, and I'm going to give you a very specific example of what just happened to me a few minutes ago that I felt compelled to come on and talk about. The recurrent revenue for anyone who doesn't understand is revenue that is recurring and stabilizes your business. It stabilizes your business because you know that a certain amount of money is coming in every single month or whatever frequency you've set for a year, for six months or for a decent chunk of time. If you think about things like subscription boxes or subscriptions, if you think about retainer clients, if you're in the service-based business. What just happened a few minutes ago was that I got an email from an online retailer that I have used for at least a couple of years, and this online retailer sells something that I use in my house all the time.
I look at their emails, they do pretty good emails and I got an email that said, “Fiona, you've been with us now for, and this would've just been a variable in their email setup. You've been with us for this many months, it was over two years. You have spent this much per month on getting these things sent to me. And what we want to tell you is that you could save this much if you went to an annual plan.” I've been paying monthly for this and I'm aware that I'm paying monthly, but I just didn't stop to think, I could probably save money if I went on an annual plan. I think a lot of the time when you are signing up for some offers, particularly from an e-commerce product, you often, or I often will look at, “I'll just do it monthly.”
I don't even know if I'm going to use this. I don't know if I'm going to replenish the stuff. It may not work whatever you're telling yourself. A lot of people will start monthly on something and a monthly subscription. And what it was saying to me was, you could save this amount of money if you just switched annually. Once I clicked on that, because of course, everyone's looking to save money at the moment, I was brought to a page that had my data up. It was like the backend of the website and they would've just again, templated this and had all these variables showing how many times I'd used it, how much money I'd paid to date, how much I could have saved over the last X amount of years if I had gone annual.
They also had a very tight deadline. I had to sign up annually. Three weeks away is the deadline. Not that tight, but I just saw the month and was like, “Okay, it's this month.” And I looked and I was like, “Why am I paying monthly?” I clicked it, I went to the annual payment, I'm fine with that. We use it, I know that we're going to use it and I've saved myself quite a chunk of money. I'm telling you this because that is an example of recurrent revenue done well and something that could easily be set up in the backend of whatever tools you're using, particularly with your email sequencing. For example, let's say you're selling, kitchen or cleaning products.
You may be able to look at your customer data and review that customer data and set up variables that say if somebody has been on a monthly membership for more than X months, that could be six months, it could be 24 months. We will send this email out right before their next billing period and give them this templated email that pulls that customer data that says how many months I've been on, how long I've been paying and what I could have saved. There are three variables in that email. It's a very compelling argument because no one wants to think that they're losing money. That not only works for the customer, but in my case, I very much fell for this. I'm very aware of how this works but also stabilizes that business, particularly me, one person is not going to necessarily stabilize the business, but they would have an objective and a metric to move people from monthly subscriptions through to an annual subscription.
You could even just move people to monthly subscriptions instead of having people pay ad hoc. And this is hard sometimes for let’s say, service-based businesses to think about is to consider, let's say with business coaching, I have had some clients that have worked with me on and off for pretty much the whole time I've been business coaching. I have quite a few clients that I would say, work with me for a year, take six months off, come back, and work with me again. They would be probably a great client to go to and say, “Hey, I'm opening up this new package. I think you do want to have check-ins with me. You've proven that because you've spent x amount of years working with me. What if we set up a retainer quarterly for this amount or even an annual retainer and it just renews every 12 months? You can't cancel it once you've paid for it, you use up those sessions.”
The same with photography. If you're a photographer and you're thinking, I can't do that, people just book me for a shoot. If someone's booking you for a shoot, let's say a brand is booking you for a shoot to do a commercial job, you may well do the big job, but you could also tie in that, it was so great working with you. I have an annual package that allows you up to 10 shots at three different shoots for the rest of the year. The shoot is going to take two hours. It has to be at your office or at a venue that you have booked. And it is going to be either product photography or lifestyle or whatever. I'm not a photographer so there are probably people listening and going, that wouldn't work.
But you could set up some carryover so that you have them on retainer and therefore you then have a revenue stream of retainer clients as opposed to ad hoc jobs. And in the surface-based businesses, a lot of the time it does feel like feast and famine. I know I talk to a lot of people in that space where you get one job and then, how am I going to feed my family for the next six months? Because that was great, but then I had to pay all these taxes and base and everything else on it. You want to be thinking about how can you stabilize your income and whether are there people, in this case, this email was coming to past clients. It's the post-purchase marketing that I talk about a lot that a lot of companies do not bother doing.
Thinking about if you've been in business for some time, are you reviewing the data of your clients or customers? Are you reviewing people who spend a certain amount, people who've been with you a certain amount? I was talking to somebody just recently, who was it? Was it on the podcast? No, I was finishing up with a client and when I finish up the last session, we do some reflection questions and I ask this one particular client who's wonderful, what they were most proud of from their business so far, their business journey. It's also a question I like to ask people in this interview in this podcast. And they said, I was looking at my customer data the other day and I saw that I have somebody who's bought from me 25 times or 23 times or some amount that's a big amount for that particular industry and for that particular product that this person sells.
And they were like, I'm just amazed and delighted that I have customers who have such loyalty to me and love what I do, that they're just waiting for the next thing to come out and the next thing. I think we don't look at that enough and we don't then reward those customers with let’s say, an incentive, or it doesn't have to be cash off. In this case that I'm talking, it was cash-off. It could be a free sample of something. It could be time with you. Let's say, for example, you're an interior designer, again, another non-high frequent purchase. Often people just get an interior designer once and then maybe later if they're getting investment property or a beach house or a few years later, if things need a bit of a *** that's not a great word to use, interior designers because you just *** things, I know you do so much more than that, but it may well be that “Hey, I worked with you on this. I know that things can feel stale after six months or 12 months.”
Or maybe even not the word stale, but getting back in touch and being like, “Hey, I would love to offer you, you've just been such a great client of mine. I know you also referred your cousin or somebody else. I'd love to offer you a Zoom consult and we can just talk about what's coming out. Maybe you've got a big milestone birthday and you want some ideas of how to refresh the space or maybe it's coming into a different season.” There are things you can do to stay front of mind in the post-purchase that can potentially add more money to you. Stabilizing your income with recurrent revenue is a huge part of running a successful and financially stable business.
You don't have the peaks and troughs. I work in the retention space in marketing at Audible UK, a long time ago. 10 years ago was when I left and I worked with this team and this incredible guy, I think he might be working the Australian Audible, but he was just a brain at understanding retention, understanding churn rate. And he was obsessed with it in a good way and understood the need to constantly, and I hate using this term because it's so overused, but that surprises and delights customers. Today, I got a surprise from that company. I got a delight because I saved money and now they've got me in their system for at least a year and then it'll probably renew and I won't even notice. You've got to think about whether are you looking at the customer data.
Are you looking at ways that you can keep those people loyal and spending in a way that is also helping them? If this product was not great, I wouldn't be replenishing it every month and I wouldn't be paying that monthly fee, but is good. I've shown them that I think it's good because of my loyalty and how can I be helped by that brand In this case I can save more money. But there are lots of different ways that you can help them and retain that great relationship and that great reputation and that great post-purchase nurturing that a lot of people don't do.
That is it for today's quick tip episode. I hope it has helped. As I said at the start, we do mention this in more detail in the Money Mapping course. That's just like a short course. You can do it online. It's about an hour, I think with a workbook I make every single client of mine do that when we start working together. And you can just get it yourself if you'd like to over at mydailybusiness.com/courses or you can go to mydailybusiness.com/shop and you'll just have to click one extra button. You may as well just go to mydailybusiness.com/courses and we'll link to that all in the show notes, which you'll find for today over at mydailybusiness.com/podcast/309. Thank you so much for reading. If you found this useful, please share it with a friend because maybe it'll help them. And if you have time, I'd love it if you could leave a review on Apple or Spotify, wherever you listen because it helps us get found by other small business owners. Thanks for reading.
