Repeat customers are a crucial asset for your business, but not all repeat sales are created equal. Let me explain. There are two types of repeat sales: reoccurring revenue and recurring revenue.
Reoccurring revenue comes from customers who make purchases sporadically, while recurring revenue is predictable and occurs on a regular basis, often through subscriptions or contracts.
Recurring revenue holds more value for any business due to its predictability, which is why it's important to explore ways to convert repeat customers into subscribers.
The HP Instant Ink Program: A Success Story
To illustrate the power of converting repeat sales into recurring revenue, let's take a look at the HP Instant Ink program. HP, an established player in the printer industry, noticed a decline in reoccurring revenue as customers sought cheaper alternatives for toner cartridges. In response, HP launched their subscription-based toner replacement program - HP Instant Ink.
Through this program, subscribers receive new toner for their printers every month based on their printing needs. Plans are available at various price points, starting from as low as $0.99 per month. HP ensures customers never run out of toner by utilizing built-in hardware readers that notify the company when a cartridge is running low.
This ingenious program not only generates recurring revenue for HP, but it also fosters brand loyalty among its customers. Inspired by the success of HP Instant Ink, here's three strategies you should consider to effectively convert repeat customers into subscribers:
- Offer plans based on volume: Give your customers a range of subscription options that align with their needs. Like HP, provide different plans based on page volume to ensure customers can choose a plan that suits their requirements.
- Allow carryover: Recognize that customer needs may fluctuate and give them the flexibility to carry over unused services or easily purchase additional ones. This ensures customers feel confident in subscribing, even if their usage varies.
- Never let them run out: One of the main reasons customers prefer subscriptions is the assurance that they will never run out of a product or service. Take a cue from HP's toner gauge and find ways to monitor your customers' supply in real time, ensuring timely delivery and preventing any disruptions.
Repeat customers are the lifeblood of any business. By implementing strategies inspired by the success of HP's Instant Ink program, you can increase the value of your company and cultivate long-lasting customer loyalty.
To your success,
P.S., I know a subscription model will work for your business, because I'm an HP Instant Ink subscriber.
