How to make recurring revenue as a freelancer
As a freelancer, one of the biggest problems you face is keeping your income stream consistent. You are always searching for the next gig to pay the bills and the periods of time you have nothing lined up can be incredibly stressful. Offering subscription services solve this problem as well as opens the door to much more lucrative business opportunities.
In this article we will explore what makes subscriptions great and how freelancers can tap into the business model.
Why Subscriptions?
Subscription programs are a particularly effective way to turn one-time buyers into loyal customers and increase customer lifetime value by 200–400%
— OrderGroove
There are many aspects of the subscription business model that are appealing. Freelancers who focus on their subscription offerings experience a much more predictable stream of income, more customers, and make more money overall because of it.
Increased customer lifetime value 📈
According to the Adobe Digital Index, 40% of revenue comes from returning or repeat purchasers, who represent only 8% of all visitors. Repeat customers are worth much more to a company than one-offs and one of the best ways to get repeat purchasers is to sell them subscriptions.
Being able to have customers over a long period of time gives you more opportunities to sell them on your other services and upsell them as they grow along with you.
Predictable income 🔮
The unpredictability of income is one of the hardest parts of being a freelancer.
When you start selling your services as subscriptions, your income becomes more stable as you are guaranteed a certain amount each month. This gives yourself peace of mind and as well as insight into what your workload is going to look like at any given time, allowing you to manage your time effectively between delivering services and looking for new customers.
More customers 👨👩👧👧
Customers love the subscription model; they gain more control over their interactions with businesses and get billed automatically, and you as a business owner benefit from a steady income.
“In the month of April 2017, subscription company websites had about 37 million visitors. Since 2014, that number has grown by over 800%.” — Forbes
Being able to utilize new marketing tools such as free trials and tiered pricing makes the barrier to entry much lower compared to traditional freelance business models that offer quoted pricing.
How to sell subscription services
Productize your services 📦
One of the key points of a subscription service is the “Deliverables”; what the customer will get each month. For example, a freelance blog writer may charge $100 for 3 blogs each month as part of their service, or a growth hacker might offer a set number of videos and social media posts.
The first step to growing your recurring revenue is to design your service offering as something that can be tiered into different pricing levels. This is useful to the customer if they have different “packages” they can choose from, so that they are not paying extra for features they do not want. Be specific with your product descriptions to ensure the customer is aware of exactly what will be delivered to them.
Give out free trials 🎁
Free trials are a great way to show potential customers the value you have to offer. The best SaaS businesses can expect to see over 60% of their trial users convert to paid users.
A strategy for those businesses that can’t afford to give free trials to everyone should consider offering free trials of their higher tiered services to existing customers. Show them what they can get if they pay you more money and the trust you have already built will often be an easy sale.
Offer different pricing tiers 📶
Being able to have pricing anyone can afford is one of the best reasons to sell subscriptions. Selling different services at different prices allows you to build a “value ladder”. The value ladder is a classic marketing strategy where customers are enticed to your business through free or very cheap services and as they gain value from these they become more willing to spend more money on services that promise higher value. Offering a wide range of priced services allows you to gain trust and later upsell on your higher value services.
What do you need to start?
The only major barrier to entry when it comes to selling subscriptions is the platform you use. Make sure you can support functionalities such as free trials and automatic billing to get the most out of the subscription model.
ServiceBot gives you all the tools you need to sell subscriptions, Try it out for free
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