Subscribing to a Wider Moat

Five reasons subscriptions can help stabilize your business and client relationships.

By Scott Mortier

The subscription business model used to be primarily gyms and media (newspapers, TV and magazines), however, more products and services have been adapting to today’s consumer who wants quick and easy access at their fingertips. According to Zuora’s Subscription Economy Index, subscription-based businesses are growing revenue nine times faster than the S&P 500 Index.

Now, the subscription trend has started to catch fire in the B2B sector as well, with more companies looking at how to gain loyal customers or clients by increasing the ease and efficiency of what they offer. This works especially well in a franchise system, as the customer or client will frequently have access to the service nationwide. At Dental Fix Rx, a dental equipment repair franchise, we introduced a subscription service and within the first 90 days the program amassed more than 100 clients signed on, and a passionate franchise fan base.

Every B2B franchise brand should introduce a subscription membership option, and here’s why:

1. Monthly Revenue

Consistent revenue coming in can be the number one challenge for franchise owners providing a product or service to other businesses, but recurring revenue from a subscription-based membership program generates guaranteed cash flow each month. It creates a regularity and stability your franchisees can rely on, while taking away any question about where next month’s revenue is coming from.

Franchise owners utilizing a subscription business model are better able to forecast monthly revenue, and in turn, are more suited to budget out business expenses accurately.

2. Resells

Not only does a B2B subscription model benefit a franchise owners’ ability to predict their monthly cash flow, it also increases the value of their business and increases appeal to potential buyers. If a franchisee in your system is looking to retire or sell their franchise for any reason, it behooves them to have the cash flow from a subscription offering. With the fixed revenue stream, owners can sell the business for twice as much as it would have been without a continuous revenue stream. 

3. Client Retention

When potential clients are researching and trying different products or merchants, it can become overwhelming, time consuming and can even disrupt his or her business. Subscriptions are such a success in the B2C arena because they solved these issues. 

Consumers want to have easy access to a product or service at a high quality and with maximum efficiency. Businesses want that too. The program Dental Fix Rx recently launched, Unlimited Service Plan (USP), acts as a monthly subscription for dental offices. It covers all dental equipment repair and preventative maintenance with an unlimited amount of labor for one flat monthly fee.

Quick repair maintenance was a problem for dental offices big and small, and one Dental Fix Rx was able to rectify through a subscription program.

Dentistry is a unique industry, but it does not differ from any other industry when it comes to owners wanting their problems fixed quickly and at a good price. This is universal. If your B2B franchise can set up a monthly subscription that eases a pain point in your industry, you’ll have clients for life.

4. Stronger Client Relationships

With monthly interactions, franchisees become less transactional with their clients, ultimately fostering long-term relationships. Our franchisees work for and by themselves, so when a dental office receives its subscribed services or requests a piece of equipment be repaired, they will deal directly with the same technician every time. This type of recurring interaction establishes a level of familiarity and trust. A subscription service will build a sense of dependability between your franchisees and their clients.

5. Impact on Franchisor

It isn’t just helping the franchisees, however. Introducing a subscription service will also be another tool your franchise sales team can grab in their toolbox. Prospects will see that your franchise system is innovative and has a plan for providing consistent revenue. Within the first 90 days of the USP program, attendance at Dental Fix Rx Discovery Days was up 500 percent.

A subscription economy is the future for B2B franchises, which have already begun to profit and grow after adding or implementing subscription programs. Subscription programs can generate higher profitability, more predictable cash flow and lifelong, brand loyal customers.

Scott Mortier is the Chief Development Officer for Dental Whale. The company’s subsidiaries include Dental Fix Rx, the largest dental repair franchise in North America.