Rihannas Billion Business

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Rihanna’s Billion $ Business

Summary

  • Rihanna became a billionaire not just from her music, but because of her successful lingerie business. Her companies together are worth over $3 billion.

  • She created a unique subscription model that is for credits, similar to gift cards. This means people subscribe and pay regularly, but instead of a physical product, they get credits they can use later.

  • One benefit of this model is it generates higher margins. If people don’t use their credits, it’s pure profit for the business, like unused gift cards during holidays.

  • Rihanna's business benefits from having over 5 million subscribers paying around $60 a month, which totals more than $350 million a year.

  • If you have a product people buy sporadically or on special occasions, consider offering a subscription for credits. This allows customers to accumulate value over time and can lead to more regular spending.

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How To Take Action

I would suggest considering a shift towards a subscription model if you run a business where customers tend to make one-off or occasional purchases. Think about offering a subscription service similar to what Rihanna did with her lingerie line. Offer credits that customers can redeem later, instead of delivering a physical product each month. This can encourage consistent spending, as customers feel the urge to use their accumulated credits.

A good way of doing this is to assess your product offerings and identify items that could appeal on a subscription basis. Ensure that the value gained from these credits feels significant to your customers. For instance, if you have seasonal products, bundling them as part of a subscription package can appeal to sporadic buyers, transforming them into regular subscribers.

Also, be transparent about how the credits work and any expiration policies. People are more likely to appreciate the value if they understand how to utilize their credits effectively.

This approach needs low upfront cost. You aren't forced to produce more items unless your customers decide to redeem their credits. Meanwhile, you're effectively gaining a financial advance from the subscription payments, maximizing your cash flow without immediate output. This leads to higher profit margins, especially when some credits go unused, which often occurs.

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