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“Okay, section eight: Creating Continuity in Reoccurring Revenue. When you create a continuity program, what you’re really looking for is creating a reoccurring revenue stream for yourself. Let’s talk about that for just a moment.
Really, what is continuity? Well, continued contact with continued payment from the customer is the simplest explanation for a continuity program.
I’m sure other people can explain it a lot better, but for me, that’s the simplest explanation. You’re going to keep giving me money for something that I’m doing for you or some program that I’ve put you on.
I could be providing nothing but security like we talked about before with the value Trojans. It could just be some security that I’m providing to you.
So basically continued payment for goods, services, securities, whatever it is. You continue to receive money on an ongoing basis from that customer for something.
So reoccurring revenue builds from the continued delivery of good or services like we talked about.
What you want to think of when you create a continuity program, how can you create a consumable or valued product or service for a customer or customers that they’ll want to stay a part of?
We talked about a lot of this in the value Trojan section because it’s the same thing. What you’re doing with value Trojan is you’re creating a continuity program, but a lower cost continuity program versus a higher cost continuity program.
So really it works along the same lines, but let’s look at some continuity programs right now that you’re probably very familiar with.
The gym membership.
That’s a fantastic continuity program because many of us, me, don’t go to our gym. Some of you guys probably are relentless with the gym membership. Me? Not so much. I go once – I’m embarrassed to say how often I go. (Laughter) Let’s just say I don’t go a lot.
Netflix is another great continuity program. Insurance payments, cable television, Internet service, Costco. Costco is a fantastic continuity program.
Associations or clubs, collections. Columbia House is a great continuity program. Your telephone service is a great continuity program.
Pest control service, consumer reports, and even the rent you pay is a continuity program where you are agreeing basically to get into a contract with someone, and continue to give them money for some good or service. Think about all of those.
I asked Ray and Anthony yesterday – we were sitting here, and I said, “What do you guys think is the best continuity program out there?”
I got a bunch of different answers depending upon what their perception of what was great or valuable.
I told them, I said, “Well, you know what? To me what is one of the best continuity programs, aside from insurance where they don’t provide anything; however, they do provide services should something happen.”
I said, “You know the best continuity program to me is Costco.” Why Costco? Well because I pay them to pay them. I pay them every single year to give them more money for products that I buy from them.
What a fantastic continuity program. I give you money to give you money.
It’s the same thing I do with Amazon Prime, except with Amazon Prime at least I’m getting express shipping for a small amount. With Costco, no.
I’m giving them crap loads of money every single year because I have not just one or two or four cards, I have like ten Costco cards because of all my staff and everything.
I’ve got all these Costco cards, and I’m paying them boatloads of money so that I can go in there, get very little customer service, and push around a monster card, and buy bulk stuff from them.
What a fantastic continuity program.
So here is an exercise for you to help you really understand continuity better.
Write out all of the continuity programs that you belong to, or continuity programs that you’ve been associated with in the past. Remember, it’s anything that you’ve entered into an agreement to pay them on a monthly basis.
This is important for you to understand what we love about continuity and what’s passionate to us individually.
What’s passionate to you? Then think about what’s passionate to your customers.
So it’s really important that you understand that continuity, what you may think or you may have thought in the past that it’s not necessarily viewed as a good thing is a fantastic thing.
A lot of us are more than happy to pay those continuity fees every single month or every single year to be a member of your club or association or to get your pest service or whatever.
Pest control one is a great one.
Guy comes out for 10 minutes, twice a month, and I pay him $50 bucks every 2 months. That’s a very lucrative 10 minutes isn’t it? He gets paid $50.00 for 10 minutes every 2 months. Think about that. That’s insane.
So how long is he at my house? He’s at my house for 60 minutes. Wait, now do I even have that right? Yeah, 60 minutes. Yeah, he’s at my house for 60 minutes a year, 1 hour a year, and I gave him how much for that hour? I gave him $55 bucks x 6 months.
So I gave him $360 bucks. That’s a pretty good hourly rate if you ask me, really good hourly rate, especially when you consider what he’s paying his employees who are actually driving around and servicing me.
So you can see that continuity can be a fantastic, fantastic thing and that we’re happy to pay.
You can either be billed automatically or not billed automatically. For the purposes of the Internet, most billing is done on an automatic basis and billed directly to the card.
The point is that you’re entering willingly into an agreement to use this good or service for any length of time, whatever the length of time is that you have determined with the person providing the continuity or the continued x: support, service, security, whatever it is.
You’ve giving them something for that. Think about that.
For that matter, a monitoring service for your alarm system. $30.00 a month to monitor your alarm service, and make a phone call. That’s something that can be done automatically.
Yet, we happily pay $35.00 a month for that sense of security, and knowing that someone is there looking out for us. Okay?”
