Solving a startup financial quandary: Five ways to encourage repeat business

Editor’s note: Joe Procopio is the Chief Product Officer at Get Spiffy and the founder of Joe has a long business history in the Triangle that includes Automated Insights, ExitEvent, and Intrepid Media. He writes a column on startups, management and innovation every Monday as a special part of WRAL TechWire’s Startup Monday package.

So, the blog is the fourth in a series of four. The previous two articles are included in this column.

Note to Readers: WRAL TechWire wants to hear from you about your stakeholder views. Please email: [email protected]


RESEARCH TRIANGLE PARK – Will you achieve your goals this year?

There’s never been a worse time to answer this question, but there’s never been a better time to create a more reliable income forecast.

The key to solving the forecasting puzzle is, of course, establishing a consistent and growing production rate. In other words, if your goal is $1 million in revenue over the next 12 months, your focus is on a consistent number of $83,333 a month, every month.

But no business has constant income – unless it has recurring income. That’s the pot of gold at the end of the traction-and-scale rainbow, and the subscription pricing model seems like a natural way to those goals.

Joe Procopio

Joe Procopio (Photo courtesy of Joe Procopio)

One problem. As I wrote recently, Subscription prices do not apply to all products or services. A subscription model only makes money if the customer demand cycle matches the timing of the subscription model.

Most products and services do not fit this model. So what do you do?

I have over 20 years of experience building, selling, and especially pricing products and services to achieve traction and scale with recurring revenue. Here are five subscription model options that can encourage repeat business.

Predictive marketing

If you have customers, you don’t need machine learning or big data to start marketing right now.

Simply put, predictive marketing is sending your customers a reminder about your product or service before they need that service, and good predictive marketing gives them a reason to act. This reason could be a successful message, a discount, or just a good time.

Basically, all you have to do is get one of these rights.

While the subscription pricing model encourages customers to buy based on the schedule, predictive marketing motivates customers to buy from you on his schedule. It’s easier for your forecasting model to match the model your customers actually use than the other way around.

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The fact is, you need to know a little about your customers, and you have to document and act on that knowledge. It takes work, but a good automated email service can handle all your emails for you if you spend the time with it.

You need to understand some of the habits surrounding the use of your product or service, and you need to understand the habits of your own customers.

If you track when your customers buy, you can predict when they will buy next time – which you can do if you do any kind of formal forecasting. If your customer has only bought once, your predictions are based on the use cases of your product, and then you learn from those predictions as you go. Then link to your email marketing program or upload all the work and do it in your application by sending notifications.

Over time, these random guesses become educated guesses, with data to confirm those guesses. This makes the prediction more accurate.


In general, the retail business sector, I am always surprised that more companies, especially startups, do not implement loyalty programs.

The purpose of the loyalty program is in the name, but the Its purpose in a loyalty program is to create additional touch points with your customers. This allows you to do additional marketing, messages that they expect and that they may read and may act on. This also allows you to move them to deeper discounts when you need to prioritize your margin revenue.

The process is to reward customers for future business. But the advantage for you is that you save half of the cost of acquiring new customers. So be generous with what you give. Remember, loyalty is expensive, so make it worth the customer’s time.

Loyalty programs don’t have to be complicated and they don’t have to be complicated. Do not make the customer have to follow your program through the application or God forbid a paper card. You track their loyalty, with their email address or phone number, and you automate the rewards. I also recommend not making the program more complicated with points or stars or thresholds. Choose a discount, make it affordable and affordable.

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Once the program is in place and you begin to gain insight into its impact, you can generalize that knowledge to better predict future sales.


Many businesses will combine loyalty and referral programs. This is probably because, unlike subscription models, loyalty and referral programs work for any business or service. However, loyalty and referral programs serve a completely different purpose.

While loyalty programs focus on generating more revenue from existing customers, referral programs are designed to reduce the cost of acquiring new customers. The former is about increasing lifetime value (LTV), the latter is about reducing customer acquisition cost (CAC).

Both of these programs can target your best customers, as they are your most loyal SY your desire to refer others. And there lies the mistake. Because the programs have different goals — LTV vs. CAC — they want other rewards too.

Loyalty is about discounts, referrals are about commissions.

Therefore, your referral program targets do not necessarily have to be your ideal customers. In fact, your target in a referral program may not be a customer at all. It is a person who has access to a large group of potential customers. For some businesses and services, the target may be your ideal customer. For others, the target should be someone like a market expert, influential blogger, or group manager.

Think of your referral team as your second sales force. Reward them well as they bring in new customers that ultimately generate revenue. If your referral team includes your best customers, give them more products. If not, give them a commission.

Both referrals and loyalty programs are easy to test and customize to fit your business needs. Unlike subscription pricing, which must conform to some model of customer demand, these programs design themselves for that demand. Build them and improve them over time as you get results. Then use the answers to make predictions.

Great prices

Single sales of multiple items can and should be discounted. To take advantage of this, let us know in advance of the discount.

Tiered pricing is a great way to do this, and you can jump into a tiered pricing program in ways that can make your forecast more accurate. The only problem is that messing with tiers requires messing with the presentation, but all the other methods are layers sitting on top of your offering.

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You don’t want to change tiers too often. So how do you get it in the first place?

  • The first level is your main sale, single item or transaction, the price may be higher than usual, to attract customers to buy ahead of schedule.
  • Your secondary level maximize customer value. This is the level that will satisfy the most common recurring customer use cases.
  • Your third step increasing the repeat sales value of your business. This is your power user customer, the one who will buy more.

Now, apply that strategy to your own offer. If you want to add additional levels or add variation, remember to offer a higher discount for multiple items sold in one store. Remember all CAC stocks at cost.

Consumer advocate

Call it customer success, concierge, guided onboarding, dedicated support, whatever works for your business. Turn it into a program, and fold it into stocking and selling activities.

For higher dollar transactions, a consumer advocate is required. The role is helping customers find value in your products, keeping customers satisfied, and finding opportunities for additional or repeat business based on each customer’s needs.

In general, all other programs are wrapped in the function of the work.

  • Your customer advocates look at customers when they believe the customer may be ready to buy again.
  • They reward loyalty to power at a discount.
  • They ask about possible referrals.
  • They offer additional suggestions or promotions.

Of course, this is the most expensive option, as it requires at least one full-time resource. But if you do a good job of holding and selling the shares, the shares can pay for themselves many times over.


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Previous posts in this series:

Startup, subscription cost & risk: It’s not an easy time

Startups, subscription costs & you: How to get the strategy right

A Secret Weapon for Startups: Get Subscription Pricing – Here’s How


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