The Automatic Customer: Creating a Subscription Business in Any Industry by John Warrillow

Author:John Warrillow [Warrillow, John]
Language: eng
Format: epub, mobi, azw
Publisher: Penguin Group US
Published: 2015-02-04T14:00:00+00:00

CHAPTER 11

The Peace-of-Mind Model

People with dogs are always worried about losing them. One whiff of a skunk and the family dog can be halfway down the block before you even know he’s gone.

That’s where Tagg comes in. Tagg is a pet-tracking service started by Snaptracs, a subsidiary of wireless giant Qualcomm that had 30,000 subscribers by the summer of 2013.1 With Tagg, you can keep an eye on Rover with your mobile phone. First, you buy the collar from a retailer like Verizon Wireless or Best Buy. Then you set up the monitoring service for $7.95 per month. If your dog leaves a specified area (that you determine), you get an alert on your smartphone.

Tagg is an example of what I call the peace-of-mind model, which offers insurance against something your customers hope they’ll never need. You are there to help your customers when they need your service, but otherwise you stay out of their way. You make money from charging more in subscription revenue than it costs you to deliver the service when called upon. You can also jack up your profits by investing the money your customers give you before they need your service.

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