The best ways to generate passive income is through subscription-based products. These solutions are the gift that keeps on giving. We have a sales cycle that is successful, and then we see the profit for months and years to come. It is worth our time to dig a little deeper into this form of income and typical solutions in this category.
The Best Subscription-Based Products
While there are many ways to create a product that generates recurring revenue, some jump to the top of the list. These may seem obvious. However, it is good to keep these ideas in mind when you start down the path of a PI product. These traits are the best ones for subscription-based products.
- Software-as-a-service (cloud-based solutions)
- Solutions that require regular data updates (contacts, regulations, laws, etc.)
- Solutions for platforms that are regularly upgraded
- A model where users are likely to use the product more as time goes on (data capturing, anything tied to business growth, etc.)
Note that some of these will require regular updates on your part as well. That is ok. However, you want to make sure those updates are not too time-consuming. They can flip a passive product into a full-time job if you do not watch out.
Avoiding Multiple Sales
The best part about recurring revenue products in my mind is the need to sell only once. Your pitch for the product should address the recurring nature of the licensing. That means that you will be able to automate the recurring billing or invoicing. There should be a minimum of feedback and cancellations. Of course, the best way to ensure this outcome is to build a product that is high in quality and does the job it was advertised to do.
Keep in mind that customers do not always need more functionality to keep renewing a license. A renewal reminds a user that they are paying for that product or service. As long as it is solving a costly problem, then renewals will be a no-brainer.
