Transform Your Business into a Recurring Revenue Business

Subscription Boxes
We’ve seen some of the world’s biggest license companies slowly convert to the subscription model. If you have an existing one-time payment product or service, you can transform it into a recurring revenue business for a healthier cash flow.
Written By: April Pagaling

At the Gravy Blog, we always talked about how to start a recurring revenue business. But what if you already have a business? What if you wanted to transform a business with a one-time fee to a subscription business? 

Before we dive into some proven ways on how to transform your business into having recurring revenue online, it’s essential to make a clear distinction between selling one-off info products/services and getting people to subscribe to repeat charges.

When you started your online business, you probably thought, this is it. This is the path to financial freedom. Only to find out that you’re still in the rat race, trading your time for money. Your business model is essentially a simple duplication of a brick-and-mortar business. Your cash flow is far from what you initially expected, and sales are not happening on a regular basis with the predictability of a recurring revenue model.   

You probably found your way here in search of something more, something that will turn your new customers into a customer base with a high degree of certainty for future revenue. One-time sales are great for a short-term customer relationship but not for building recurring revenue streams. This is the difference between building a path towards lifestyle entrepreneurship or continuing to making the hustle or the grind. 

We’ve seen some of the world’s biggest license companies slowly convert to the subscription model. The Saas business, or software as a service, is turning their world upside down, converting their one-time payments (or license) into a subscription business with predictable revenue. Adobe, for example, has had one of the most successful transitions from a license model to a SaaS model. Microsoft is doing the same with their Office Apps, and the move was primarily credited as one of the main reasons why it still remains relevant till now. Apple (with Apple Music) has shown how much value can be gained with a greater emphasis on recurring revenue on even a smaller percentage of the overall pie. Telcos and fitness shows a higher annual recurring revenue with monthly subscriptions, and especially during pandemic times, they have shown an even better expansion MRR. Content providers, such as New York Times, National Geographic, and WSJ, are proving that newspapers are not dead and people would always buy content with quality. And let’s not forget the streaming industry. Spotify and Netflix continue to be the forerunners of the subscription business model. Even most of the startups are learning to expand their customer’s lifetime value by offering a monthly fee and subscription-based pricing. 

What’s surprising is that according to statistics, subscribers who see great customer service, committed sales team, and consistent service, most of them stay with a company. This is amazing because when you get new customers and agree on your service’s value, they will keep paying as long as you continue to provide the same value. 

This brings us around to converting your business. 

For Course Creators

The same content that you sell as a one-off product can be turned into recurring revenue — it’s how you package and distribute it that makes the difference.

You can package your content in a way that retains customers and sets you up for monthly memberships. Study how you can drip content on a weekly or monthly basis. Not only does drip content gives your members a reason to stick around, but it also boosts your engagement and customer loyalty. 

Have a problem with most of your students not finishing their courses? You are not alone. Statistics show that students are most often excited to dig into a course only to stop consuming the content before it’s even done. Drip content is also a great way to have your student finish their courses while avoiding overwhelm and procrastination. It’s perfect for customer retention and helps build a strong community or tribe around your business. It widens your customer base as they become your walking advertisements. So long as your tribe is intact, you can always create new content to upsell to long-time members.

E-commerce Businesses

Almost all of the online businesses that do eCommerce can be turned into subscription businesses. We have seen now subscriptions have begun to spread to other industries such as fashion and beauty, the bastion of eCommerce. For example, Manscaped, a men’s lifestyle brand, continues to make headlines by selling grooming replenishments via subscription. Other examples that you can pattern and copy include Amazon Subscribe & Save, which offers regular delivery of items like cereal or toilet paper, and Dollar Shave Club’s recurring razor shipments. These are replenishment services that send out consumable goods for customers on a regular basis. 

Curation subscription boxes have also become popular. You can choose among your existing products and package them accordingly. For example, Birchbox sends a monthly box of cosmetics, skincare products, perfumes, and organic products to their subscribers. Every day, thousands of niches such as kids, dogs, candies, coffee, and all sorts of hobbies and interests send out thousands of subscription boxes to subscribers. What makes these special is that the customer doesn’t always know what they’re getting, so surprising and delighting them is part of the experience.

Done right, eCommerce subscriptions can be a powerful driver of growth for your business. As an eCommerce, subscriptions reduce the risk of having stale products that need to be discounted. And regular recurring income helps with cash flow, especially during slower seasons, so you can budget for expenses and investments in your business. Subscription e-commerce services offer these consumers—often younger, affluent urbanites—a convenient, personalized, and often lower-cost way to buy what they want and need. 

Software vs. SaaS

Now let’s dig into some recurring revenue ideas for your SaaS. How do you turn your SaaS into a business with a monthly recurring revenue? The jump from a Software license model to a SaaS subscription model was a big change. Where once the majority of the software was delivered physically in boxes, it is now distributed almost entirely via electronic download or the cloud. Many traditional enterprise software providers have now made the shift to SaaS. 

Previously, software access is limited to enterprise organizations, but the shift to SaaS subscription opened an opportunity for a new pricing model friendlier to small companies.  It’s a win-win solution as this made it easier than ever for businesses and entrepreneurs to access sophisticated SaaS capabilities and services but also opened up a new target market for Saas providers.

If you are a SaaS company easing into a subscription model, it can be painful to move your users into a subscription model. Be prepared to offset former license fees. This is the biggest challenge for software to SaaS change. But subscriptions are better in the long run because they provide better entry-level pricing. Since they are in the cloud, you can also add features readily as customers mature and gain value from the initial experience. 

 As you think about your transition strategy, remember that the ability to invoice and collect money on a regular timeline is just one step in a larger process. Even as you transition to subscriptions, you need to go beyond subscriptions and look at the business-model implications of change versus the revenue-model implications. You must aim to provide better service and empower your customers to interact with you everywhere they would like to engage. 


Converting your business from an up-front to a recurring-revenue model can seem a daunting challenge that may take years to yield benefits. But moving to subscriptions provides predictability and can accelerate freedom to scale to new levels. A good subscription business model helps you scale. This steady stream of predictable income, evaluated against churn rates and operating costs, ensures a growth that is sustainable and flexible. 

Start Recovering
Failed Payments Today.
More From Gravy