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Candace D'Agnolo

How to Create Recurring Revenue Through a Membership Model

Recurring revenue creates stability, predictable cash flow and is the easiest way to scale a business.

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TAKE A LOOK at the solutions you use in your life right now, whether business or personal. What do you see? Netflix. Zoom. Constant Contact. Your reservation software. What’s the similarity? They are monthly subscriptions! You pay the same price each month, regardless of how much you use them. Recurring revenue creates stability, predictable cash flow and is the easiest way to scale a business. Don’t you want a piece of that action? Well, a subscription is already in your existing pet business and just waiting for you to build it.

Back in 2013, I discovered recurring revenue models and was encouraged by my business coach to convert my doggy daycare pass to a monthly membership. With the pass, my customers picked the package they wanted, getting a discount per day the more they bought up front. That was great for them, but bad for the business because the pass never expired. People could use them whenever they wanted. Stretching the time out sometimes weeks, even months.

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I was resistant to a monthly subscription model. I was nervous I’d upset customers and drive them to competitors. In a monthly membership, they would still get a better deal the more they bought, but the package would reset each month.

Well, I was wrong. With the right messaging and tailored one-on-one conversations, we were able to successfully pivot, resulting in an extra $200k that year. We didn’t lose a single customer! Plus, we increased their frequency, which was better for the dogs and pack dynamic. This revenue boost allowed us to make necessary facility renovations and to hire even more qualified team members.

You have a subscription model somewhere in your business. Think about how you can get customers to purchase what they love more frequently or with a better experience. You get “bonus points” for also increasing convenience: You can set up payments weekly, monthly, quarterly or yearly. My favorite is monthly.

There are many types of subscription models out there, but after working with hundreds of pet businesses, I’ve defined three to be the most successful for them:

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The Gym Model

Just like the gym, you can set a flat rate or multiple levels for gaining access to your facility. Some of the most popular are daycare and boarding memberships, all access to training classes and/or events, a self-wash club or a grooming/bath club. Set the price, sign them up and give them access.

The Swag Model

This is a monthly product delivery. It might be a surprise what they get, where they pay a flat rate and you surprise and delight them. Or it can be merchandise they are expecting like raw/chews/biscuits, a treat of the month … the ideas are endless!

The Education Model

Bring customers together through subject matter. Maybe it’s dog training, canine or feline nutrition, avian care, DIY grooming, herbal remedies or practically any other topic. Bring them together through online classes, Facebook Live or a Facebook group for a monthly access fee.

Each of these models allows for my two favorite things to happen: community and connection. Local pet businesses are lifelines to creating thriving communities. You can leave a legacy that goes beyond your business. A membership model will make that possibility even stronger and more profitable for your business.

Candace D’Agnolo owns successful pet business Dogaholics and offers business consulting at Pet Boss Nation. For help creating a customized 90-day plan to tackle all your business goals, download a free worksheet, at petbossnation.com/petsplus. Contact her at hello@petbossnation.com.

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