Q:I am the owner of a construction company. How can I create a recurring revenue business model in an industry where that type of revenue is not typical?
A: It’s actually the topic of a new book coming out in February 2015, The Automatic Customer: Creating a Subscription Business in Any Industry. There are nine different subscription models we identified in The Automatic Customer. One model that lends itself really well to the personal services businesses, is the simplifier model. The simplifier model says that consumers are busy and, in many cases, they would rather you automatically put the relationship on autopilot.
For example, if you have a swimming pool, the last thing you want to have to worry about is calling a company in to do the chemical rejuggling every two weeks. That’s a natural way to create a simplifier subscription model which says basically, "Look, we’re going to come every two weeks preemptively to make sure your water chemicals are adjusted correctly. You won’t have to call us and we’ll do that on a subscription basis."
In the construction industry, an example of that would be Hassle Free Home Service Inc. started by Jim Vagonis, who was a contractor. He dealt with the traditional ups and downs of the contractor business cycle, where one day you’re overworked and the next day, you’re underemployed. So Jim approached home owners and said, "We’re going to proactively manage your home for you. We’ll come and replace the furnace filters in the fall. We’ll do the all needed maintenance in the spring. We’ll make sure the tiles in the roof are fixed, etc., and we’ll do that for one fixed monthly fee once a month."
That is a simplifier model. It is one of the nine that a construction company could choose from which are detailed in my book coming out in February 2015.
For example, if you have a swimming pool, the last thing you want to have to worry about is calling a company in to do the chemical rejuggling every two weeks. That’s a natural way to create a simplifier subscription model which says basically, "Look, we’re going to come every two weeks preemptively to make sure your water chemicals are adjusted correctly. You won’t have to call us and we’ll do that on a subscription basis."
In the construction industry, an example of that would be Hassle Free Home Service Inc. started by Jim Vagonis, who was a contractor. He dealt with the traditional ups and downs of the contractor business cycle, where one day you’re overworked and the next day, you’re underemployed. So Jim approached home owners and said, "We’re going to proactively manage your home for you. We’ll come and replace the furnace filters in the fall. We’ll do the all needed maintenance in the spring. We’ll make sure the tiles in the roof are fixed, etc., and we’ll do that for one fixed monthly fee once a month."
That is a simplifier model. It is one of the nine that a construction company could choose from which are detailed in my book coming out in February 2015.
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Written by John Warrillow
John Warrillow is the founder of The Sellability Score and author of the book "Built to Sell: Creating a Business That Can Thrive Without You". Throughout his career, John has started and exited four companies and is a sought-after speaker and angel investor.
John's new book, The Automatic Customer: Creating a Subscription Business in Any Industry, is scheduled to be released in February 2015.
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