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Recurring Revenue Business Models | Built to Sell News

We just released a new episode of Built to Sell Radio featuring an interview between John Warrillow and Robbie Kellman Baxter.

Robbie is the author of The Membership Economy and The Forever Transaction — and one of the world’s leading thinkers on how to transform a business into a recurring revenue machine. Robbie helps companies leverage subscription pricing, digital communities, and freemium models to build deeper relationships with customers. she has worked with over 100 organizations in over 20 industries like the NBA, Hagerty, The Wall Street Journal, Microsoft, and Ingram Micro.

Before launching her company, Peninsula Strategies, Robbie was a strategy consultant at Booz-Allen & Hamilton, a New York City Urban Fellow, and a Silicon Valley product marketer. She received her MBA from the Stanford Graduate School of Business and graduated with honors from Harvard College.

This interview is packed with insight including how to:

  • Create recurring revenue in any industry.
  • Turn customers into members.
  • Avoid price comparisons.
  • Create raving fans.
  • Avoiding bribing customers to join your subscription program.
  • Build a membership club in any industry.
  • Distinguish between re-occurring revenue vs. recurring revenue.
  • Minimize your risk when transitioning to a subscription model.
  • Avoid the biggest mistakes in creating a recurring revenue model.
  • Retain subscribers and avoid churn.
  • Raise your prices without causing churn.

📽️ Clip of the Week

In this clip, Robbie Kellman Baxter breaks down how to create a membership club in any industry

📣 Quote of the Week

“If your business is optimized around recurring revenue, everybody in the organization is optimizing around solving the ongoing problem, knowing that there’s going to be a next time, knowing that they have your home phone number, it really changes the vibe of the place.”

–  Robbie Kellman Baxter on how recurring revenue can change the culture of a business for the better. 

📈 Deals

  • Forward Air, a transportation company, recently sold its final-mile delivery business to Hub Group for $262 million. This part of the business, called Forward Air Final Mile (FAFM), primarily involved delivering and installing large appliances like refrigerators and washing machines. FAFM has 46 locations and over 640 employees, who will now be part of Hub Group, a logistics and supply chain management company listed on the NASDAQ stock exchange under the symbol HUBG.

    The sale is part of Forward Air’s strategy to focus more on its core service area, the premium less-than-truckload (LTL) market. This market involves the transportation of smaller freight loads that don’t require a full truckload.

    In terms of valuation, the sale price of $262 million can be contextualized by looking at FAFM’s financial performance: it generated $289 million in revenue during the 12 months ending September 30. This suggests the sale price was slightly less than one times annual revenue.

Watch the full interview with Robbie. 

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