So just how important are memberships and subscriptions? I read this article from marketwatch.com, which is a web site published by Dow Jones, and tracks the financial markets and apparently has more than 16 million visitors per month. And I'll link to this article in the show notes - http://www.marketwatch.com/story/apples-iphone-payment-plan-could-upgrade-the-stock-2015-09-16
So here's what it says - and I'm quoting verbatim here...
The headline: Apple’s iPhone payment program could upgrade the stock
The subheadline: Upgrade program, launching with iPhone 6S, could drive Apple shares above $200
So let me give you the context. Recently, with Apple's iPhone 6s and 6sPlus launch, they announced that they would offer new iPhones on a payment plan, and people can get a 1 year payment plan or a 2 year plan directly from Apple, and not worry about extending their phone contracts. So you basically pay the cost of the phone directly to Apple, and in return you can get a new phone from Apple every year, or 2, depending on the payment plan. And apparently, Apple in turn also gives you some premium support and service.
So back to quoting from the article: It says... Apple Inc.’s new iPhone upgrade program isn’t going to just benefit users who want to get their hands on a new phone every year, it could also give a boost to Apple investors.
"By encouraging customers to upgrade more frequently, the program — which takes effect later this month with the launch of iPhone 6S and iPhone 6S Plus sales — could produce more sustainable iPhone revenues, driving earnings per share higher and producing a better stock multiple."
Ok, now pay attention to this next part: "Analysts at UBS, who have a buy rating and $150 price target on the stock, said this week that the installment plan “could be a big deal” for Apple and drive its shares higher than $200. “The iPhone begins to look more like an annuity and less like a hits business,” UBS analyst Steven Milunovich wrote in a note to clients this week. End quote.
Now think about that for a minute. To give you some perspective, Apple is the world's most profitable company not in the world, not just right now, but in the history of the world! Apple is the largest publicly traded corporation in the world by market capitalization, and Apple last year became the first U.S. company to be valued at over US$700 billion. Yes, that is 700 BILLION - with a B! A monthly payment plan is nothing but essentially a subscription, and this is really Apple's first big subscription-based product - of course, I'm not including the underwhelming launch of Apple Music. And people in general are agreeing that Apple adding essentially a subscription-based product to its offering, is going to make it look even better, and make its shares become even more valuable!
Even A 700 Billion dollar company can do better by adding a recurring subscription model to its business. I hope that right there makes you seriously consider adding such a subscription model to your business.
Don't worry, you don't have to figure it all out by yourself. I will help you get there - all you have to do is to just keep listening to this show.