Membership and subscription business models offer businesses a predictable and recurring revenue stream, fostering financial stability and long-term growth. By providing exclusive access to content, products, or services, these models enhance customer loyalty and engagement, creating a dedicated customer base. Additionally, the ongoing relationship with subscribers allows businesses to gather valuable data, enabling personalized offerings and continuous improvement based on customer preferences. 

Subscription services have become popular because they offer more convenience and better prices for items customers want to regularly buy. Pets in particular require products to be purchased on a somewhat regular cadences.  Subscriptions have been attractive to any generation who shop online, from Gen X all the way down to Gen Alpha, but they’ve particularly risen in popularity amongst Millennials and Gen Z. Our partner The Wildest surveyed pet parents in these groups to learn more about their purchasing preferences. The Wildest named several categories and asked Millennials and Gen Z if they purchased those products, and at what frequency. The most popular cadence for the following items was monthly, meaning that if those surveyed purchased those items, most of them would do so every month: treats, shampoo, interactive toys, and supplements. There’s certainly money to be made in offering any of these products via a subscription. And offering memberships creates another source of recurring revenue. But what are the differences between membership and subscription models?

Membership vs Subscription Models

A membership is a relationship that allows a customer to continue to have access to content, a community, or services on a recurring basis. Take for example a doggy daycare. One might charge a membership fee so the owner can access doggy daycare services. Memberships can often be tailored to members’ needs, like offering pickup and dropoff services. A membership may renew more infrequently than a subscription. A subscription is an agreement where the customer agrees to pay a recurring fee, often every month, to gain access to services, content, or community, for example, a subscription box of dog toys and treats that are delivered on a monthly basis. The customer is paying to access the toys and treats at a certain rate, and they’re paying to have the convenience of getting the subscription delivered to them monthly.

Subscription Business Model

Benefits of a Subscription Business Model

A subscription business model ensures you’re creating a standard business offering to the broadest number of customers possible. If you’re creating a subscription box, you may only offer one curation of the box, meaning you’re choosing what toys and treats appear there. You can buy the treats and toys in bulk, maximizing your cost of goods. If you offer 3-month, 6-month, or 12-month subscription offerings, you will have predictable revenue and a steady cash flow. You can also learn a lot from your subscribers: if you’re offering that subscription box and sell those products at retail as well and get feedback that customers do or don’t like a certain brand or product you can ensure to stock or not stock them in your retail store. You can upsell or cross-sell customers so they visit your other avenues of business as well, or they can opt for a more expensive tier of your subscription, should you offer one.

There are a couple drawbacks to expanding a subscription service, though. If you add more choices, such as accounting for a dog’s weight, diet, or play style, that ends up with complications: you could overforecast and end up with treats that expire or seasonally-appropriate toys that no one will want until the next holiday season rolls around.

Subscription Business Model Examples

Many pet subscription models go the toy and treat subscription model, like the example listed above. But you can also offer recurring subscriptions of dog food, dog supplements, or even subscribing to any product in your retail store on an AutoShip basis, effectively letting them subscribe to anything you sell. If you’re a groomer, you can offer monthly grooming boxes of shampoo, conditioner, brushes, and even toothbrushes and toothpaste. Trainers can also create a subscription model where pet parents get new training videos monthly.

How to set up a subscription service for a pet business

Here’s how to start a pet subscription service. If you currently have a pet business, survey or interview those customers to assess their interest in a subscription, how much they’re willing to pay, and what items or services they’d like to see. If not, you can target and interview potential customers. Decide what kind of subscription you’d like to offer. If you’re selling physical products, what would be in a sample box? If you’re selling content, what types of videos or audio would you be offering? Will you bill monthly? Quarterly? Annually? Next, you’ll source or produce the items or content in the subscription. You’ll sign up for a  subscription management company that will help you collect recurring payments, and fulfill orders like Shopify. You’ll decide on your service’s value propositions: what makes it stand out against competitors? What is unique and special about your service? Then you’ll market the subscription, begin sending out boxes or content, and monitor their performance to assess what to include in future boxes or videos, and how you can improve your service.

Membership Business Model

Benefits of a Membership Business Model 

Let’s take a doggy daycare as an example. A membership not only creates recurring revenue for a business, but it also allows owners to form a community, and for dogs to create one as well.  Owners might bond with each other at doggy daycare dropoff, and the dogs might form better friendships with each other by seeing the same group of dogs every day or week. Additionally a membership can serve as a gate keeping measure for pets who have not passed a temperament test or don’t have their vaccinations. A membership makes people feel like they’re part of something, whereas a subscription might just make them feel like they’re regularly purchasing something. You can also upsell or cross-sell customers into your other businesses, like selling retail products or offering boarding or grooming.

Membership Business Model Examples

Here are some business model examples. A veterinary office can offer a membership where members get services like vaccinations and checkups at a discounted rate. They can get exclusive access to priority appointment times, extended hours, educational resources, and telemedicine. A pet grooming membership can offer discounted services like grooming, dental care, and spa services. Benefits could include priority scheduling, add on services, loyalty rewards, and access to new grooming products or treatments before the general public. A pet training membership could include exclusive training videos, private coaching sessions, behavioral consultations, and one-on-one appointments. A petsitting membership could offer discounted rates on petsitting and boarding, priority booking, waived cancellation fees, and exclusive events. A pet travel company could offer curated pet-friendly travel itineraries, guided tours, gear rentals, and outdoor activities like swimming or hiking.

How to set up a membership service for a pet business

Like setting up a subscription service, the best first step begins with market research. You’ll want to turn a special eye towards community: what are your customers looking to get out of knowing one another, or having their dogs meet each other? What are they interested in getting out of your business: is it the discounted services, extended hours, flexible booking, or something else? You’ll curate and create your membership’s offerings, and decide when people will be charged, whether it’s an annual or one-time fee. You’ll sign up for a membership management service that will manage payments, registration, member profiles, and member communication. You’ll market the membership, enroll your first members, and get feedback to see how you can tweak the membership to make it the best it can be.

Commonly Asked Questions

How to start a dog grooming business? Link here

To start a dog grooming business you’ll need to conduct market research to figure out the following. Is there a demand for groomers in your area? Where are the closest groomers and what are their prices like? What could you offer thar they don’t? How much will you make and how much will you spend on this business? And what are the legal requirements (insurance, licenses, etc) to get started? Then, you’ll create a budget that accounts for rent or a mortgage, utilities, insurance, taxes, equipment, salaries, dog grooming business software, marketing expenses, banking fees, and business licenses. If you’re hoping to one day bring on investors or want to create a north star for yourself, write a business plan that details your go-to-market strategy, budget, services, and market research. Next you’ll purchase equipment and apply for any needed licenses, tax numbers and insurance, and create any waivers you’ll want clients to sign prior to grooming. You’ll address health and safety requirements, and finally create marketing and business operations plans, hire staff, and open for business.

How to start a dog training business? Link here

To start a dog training business, you or the people you hire should have experience dog training and gain certifications like ones from the Association of Professional Dog Trainers. Then you’ll follow many of the steps needed to start a grooming business: you’ll perform market research about your competition and your community’s needs, you’ll make a budget and business plan, and you’ll purchase training equipment and supplies like leashes, treats, and agility toys. Next, you’ll address health, safety,  and legal requirements for your business. Lastly, you’ll create business and marketing plans, hire staff, and launch your business.

How to start a dog daycare business? Link here

Starting a dog daycare business involves many of the same procedures as you would for a dog training or dog grooming business. After performing market research, creating a budget, and crafting a business plan, you’ll plan out your space: will you have indoor and outdoor play spaces? Where will kennels be located? Where will you put feeding and drinking stations? You’ll address legal, safety, and health requirements, create a marketing plan, employ staff, and open your doors.

Citations:

• The Automatic Customer: Creating a Subscription Business in Any Industry
• Memberships vs. Subscriptions: What’s the Difference?