3 Ways To Flip Repeat Customers Into Subscribers

3 Ways to Flip Repeat Customers into Subscribers

Repeat business drives the value of your company, and you can categorize these sales into one of  two buckets.

Firstly, reoccurring revenue comes from customers who purchase from you sporadically.  They’re satisfied with what you offer, and they buy regularly yet not according to a  specific timeline. And secondly, recurring revenue is predictable, and you get it from customers who buy on a cadence.  Usually in the form of subscription or contract revenue, the main difference is your  recurring revenue comes in on a regular rhythm. 

Recurring revenue is more valuable than reoccurring sales because of its predictability.  Therefore, it’s worth considering how to turn repeat customers into subscribers. 

HP Instant Ink 

For an example of an organization that turned reoccurring sales into recurring revenue, let’s look  at the “HP Instant Ink” program. HP had been in the business of selling printers for decades  before launching their toner replacement subscription. 

HP would sell you a printer in the old days and hope you would come back and buy your toner  cartridges from HP. As cheaper replacement options became available, HP started to lose  reoccurring revenue from people who owned HP printers but chose a more affordable alternative  to refill their cartridge. 

In response, they launched the HP Instant Ink program to solve this problem by offering a toner  subscription. HP sends subscribers new toner for their printer each month. You can sign up for a  plan based on how many pages you print. If you exceed your page allotment one month, you can top up your account. If you fall short, HP offers to carry over your unused pages. Pricing plans  start at $0.99 per month. 

How does HP ensure you never run out of toner? They have embedded a reader in their printer’s  hardware that sends a message to HP fulfillment when your cartridge dips below a predetermined  threshold. Hence, you never run out. 

It’s a brilliant little program and gives HP some recurring revenue while driving loyalty to HP  printers.

Inspired by the HP Instant Ink program, here are three secrets for turning repeat customers into  subscribers: 

1. Offer plans based on volume: At HP, their $0.99/month plan allows you to print just 15  pages per month. At the top end, their $24.99 plan gives you 700 pages, and they have a  variety of options in between. This range of options gives customers the ability to pick a  plan that will work for them most of the time.

2. Allow carryover: Customers who buy from you on a reoccurring basis will appreciate  your various plans. However, they may still hesitate to subscribe if they anticipate their  volume will fluctuate. That’s why HP allows you to seamlessly buy overage if your  printing volume is higher than expected. Subscribers can also carry over unused pages if  they don’t need their entire allotment. 

3. Never let them run out: One of the reasons consumers prefer buying on a subscription  over a one-time transaction is that they never want to run out of what you sell. That’s  why HP’s integrated toner gauge reads when your cartridge dips below a threshold. Find  a way to measure your customers’ supply of what you sell in real time to ensure  subscribers never run out. 

Repeat customers are the lifeblood of any business. If you want to jack up your company’s value,  consider ripping a page from HP’s playbook, and turn your reoccurring customers into  subscribers. If you found this blog helpful, consider taking a look at some similar posts, such as How To Turn Repeat Customers Into Subscribers or the difference between Re-Occuring Revenue Vs Recurring Revenue.

For all things M&A, talk to an expert at MAXIMA Divestitures today.

Share This Page