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Learn the key ideas of the book by John Warrillow

The Automatic Customer

How to create or convert to a subscription business

Increase the company’s value, create lasting links with your customers, make it easier for your subscribers to spend more with you, while collecting data that can help you provide a better service: this is the subscription model that started in Europe in the 1500’s and is now back in fashion, thanks to the rise of the Internet. The Automatic Customer reveals all the secrets of this lucrative business model and explains how to choose the right one for your company.

The Automatic Customer
Read in 11 min.
Listen in 14 min.

Many useful tips to:

  • Transform a company’s business model to subscriptions.
  • Define the best type of subscription to apply according to the nature of the product or service.
  • Understand the difference between traditional and subscription companies from a financial point of view.

The author of the book:

John Warrillow is the founder of a successful company, a consultant and bestselling author, and he developed The Value Builder System Method. Using a network of over 1700 consultants and specialised software, the Value Builder increases a company’s value and transforms it, making its processes more “automated” and “sellable”.

IDEA CHIAVE 1/7

The Subscription Business Model started in Europe in the 1500’s and is back in fashion thanks to the internet

Amazon Prime subscribers in the USA used to pay $99 a year (which is now $119), for a film and TV program streaming service and free two-day shipping on most products. Prime, meanwhile, is actually much more: it is a real Trojan horse that encourages consumers to buy products from Amazon that they might have bought elsewhere. The financial analysis company Morningstar confirmed that the Prime business is not just about the $99, it constitutes a change in mentality that means customers no longer look for other places to buy products.

According to Morningstar, on average, Amazon Prime members spend more than double compared to non-Prime members. The data suggests that the company has achieved its aim: once someone becomes a Prime member, they become more loyal to Amazon. The reason for this is very simple: anyone who pays a subscription wants to get the most value for their money, and if a product that they buy comes with free shipping, buying it becomes the easiest way for subscribers to see a return on their investment.

The history of the commercial subscription began in Europe and dates back to the 1500’s. The geopolitical landscape was evolving at the time, and map editors invited their customers to subscribe to future updates, earning them the necessary capital to write the new discoveries of the world on paper. This model was later applied to the first newspapers in the 1700’s, and later became the standard commercial practice for the publication of information.

Centuries later, the internet began to offer free content, which was easy to access, but whose quality decreased rapidly, and so people began to realise that it was worth paying a subscription in order to have access to better content. In 1997, the Wall Street Journal was one of the first newspapers to offer subscriptions, and collected 200,000 paying customers in 18 months, a number which was over a million by 2011.

  

The key ideas of "The Automatic Customer"

01.
The Subscription Business Model started in Europe in the 1500’s and is back in fashion thanks to the internet
02.
Three factors made the resurgence of subscriptions possible: population, trust and the value of information
03.
A business model that alters the company value, making it more attractive to investors
04.
A subscription is different for different business models, whereas its unique peculiarities remain the same
05.
What changes when a company adopts a subscription model? Data, billing and value analysis
06.
Quotes
07.
Take-home message
 
 
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