138: Building $10K in Monthly Recurring Revenue with a Digital Subscription with Tamara Bennett

Have you thought about having a digital subscription? Can you imagine what $10,000 in passive income could do for your business? Today we're chatting with one subscription box owner who found a sweet spot with her template club. Come join us.

Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. Now here's your host, Sarah Williams.

Welcome back to the Launch Your Box podcast. Today we're talking about digital subscriptions, and I know that we live in a product-based world with our subscription boxes, but we have some incredible digital subscriptions in our community and we're going to highlight some of those. And so today I'm with one of my BFFs, best friends of all time, Tamara Bennett. and she's got an incredible digital subscription that is very complimentary to her membership. It's very complimentary to her product-based subscription. And so we're gonna talk about it because I want you to listen and get your wheels turning on how you could create a digital subscription for your business. Tamara, welcome. I feel like we could just have girl talk all day because I miss you and I haven't seen you in what, 2 months now or a month? I don't even know, probably a month. But Tamara, for those of you that aren't BFFs with you like me, why don't you introduce yourself? Let's talk a little bit about your business so they have an understanding of what you do.

Hey guys, I'm Tamara Bennett from Southern Adornments Decor. I'm also Sarah's roommate when we go on vacations and trips together, and I teach how to paint door hangers. It's a super niche business. A lot of people are like, what is even a door hanger? And so a door hanger is the wooden shape that you would hang up on your door in place of a wreath, or it could also be attached to a wreath. And so these are hand-cut a lot of times by my customers. They will hand-cut them using a jigsaw or scroll saw. So it's a very manual process. Some of us have laser cutting machines and things like that, and so that kind of takes the manual part out of it. But my business has evolved so much over the years. It started out, I was just teaching paint parties in my hometown. I was hand-cutting every single piece. Teaching them how to paint it. And I started a little membership where I would mail them a wood cutout and I would teach them how to paint it. And back then I had about 50 members, but I noticed a problem. Some of those ladies were like, but Tamara, I know how to cut my own pieces. The problem is I don't have the piece that you have, or I can't draw it exactly like you draw it. And so I had to come up with a solution. So I started designing digital templates. So people in the sewing world probably know about digital templates and things like that because You can buy sewing patterns online, print them out on multiple sheets of paper, and you tape them together, and then you cut out your piece of fabric. Well, this is the same way, but we're doing it with wood. And they can print out the template and trace it on their wood, and their shape will not only look exactly like mine but will be the same size as mine. And so they can follow right along with my tutorial, and they still have the manual process on their end of cutting it out. Now, a lot of my members choose not to cut out their own blanks, or maybe they're a little nervous too getting started. So we do also sell the wood blanks and we laser cut them and ship them from our location. But back then when I started all of this, I realized this subscription where I'm mailing people a wood blank and teaching them how to paint it wasn't serving my entire audience. So I started offering a subscri— we changed it up and I started the Painters Clubhouse, which is my membership where we give them 2 templates each month and teach them how to paint them. They also have the option of buying the wood blanks if they like, but it serves both people, the DIYer and the person who just wants to sit down and paint it.

So let me just help you help break this down for everybody. You have these different parts of your business. You have a membership, and that's called the Painters Clubhouse, and that's where you're giving them a couple templates and you're teaching them how to paint that. And it's a community, it's very community-driven, and it's the first thing that you started. Then you got into the drawing the templates and selling the templates individually, and that's when We're gonna talk a little bit how the template club came along, but that was part of the digital aspect of your business. Then as you evolved, now you have your own warehouse location on your property. You have multiple laser machines. You're cutting these wood blanks. You're shipping them out to your customers. If they wanna buy 'em, they could be a member of your membership and they could be buying the blank that goes with the project for each month. But then you also started your subscription box, which is called the Big Box of Blanks, where they get 3— is it 3 blanks every, every quarter? Yes, 3 blanks every quarter. So you can see that Tamara has these different streams of revenue for her business, but they are all serving the same customer. It just is— she has very strategically aligned her offerings with the types of customers that she served. And she started this conversation by saying I have a very niched-down customer. So not only does she start serving them in one way, and then she found another way to serve them, and another way to serve them, and yet another way to serve them. All the same customer with a little bit different abilities to cut their own wood. Or, I'm not going to cut my own wood, that's time-consuming. I got time for that. But somebody else may want to do that. They may want to save the money. They may want— they may have the time to do that. So she's found a way to serve everybody in that niche that she has niched down to. So let's go back. So you're drawing these templates and you're selling them individually. You're giving them to your members first. That's how this first started. And then you're like, well, I could sell these as one-offs. And so you started to load them into your shop and you started to sell them. Tell me what clicked for you when you wanted to create a digital subscription out of this.

First of all, selling these makes for great passive income. Because I made it one time and I can sell it as many times as I want, month after month. And over the years, we've developed over 100 or over 1,000 different templates in our shop. And so you can buy one from 3 years ago, or you can buy one of the brand new ones from this year. And I'm still making money off designs I created years ago. And so every week we release 5 new designs. So in a given month, we might release 20 or 25 brand new designs. And yes, I now at this point have a design team helping me create these because that's a lot of creativity to have to pull from just one brain.

Okay, so let's start there. So every week you were releasing your 5 new template designs, and you do a Friday live, and you would release those designs every week. And they— and how much were they to buy, like, individually?

In the beginning, they were only $5, and we were giving people a printable version, but we were also giving them a laser-cut file version because a lot of our customers now own their own laser machines. I was encouraged in the beginning to sell those separately, but it didn't feel right to me because, like you said, I'm serving the same customer, but I'm serving them at different points along their journey or based on their preferences. And somebody who begins cutting things with a jigsaw may eventually purchase a laser machine a year or two down the road. I want them to feel like when they buy a template for $5— or now we sell them for $7— I want them to feel like when they buy it, it's a long-term investment. I've got this template from here on, and I can use it as many times as I like, and I only paid $5 or $7 for it. So in the future, if they purchase a laser machine, they already have the laser cut file and so they can move from doing it manually to doing it mechanically.

So every Friday you would release 5. So potentially I might want to buy $25 worth at that time. Now it's going to be, what, $35 worth for that release. But you were like, what if I bundled these all together? So tell me how this came about.

So I had several customers who were like, how am I going to choose? They're working on a budget here and they can't just buy all the new designs that I put out every single month. And I'm, I'm like, there's got to be a better way to serve these people, also to build recurring revenue so that I know I can count on a certain amount of income every month. And so I started the Template Club as a way to cut people a bit of a deal. For those people who wanted to get all of them, it really serves well those people who are doing like paint parties and they need a bunch of fresh new designs every month to offer their customers. And so they can get all 20 or 25 depending on how many Fridays are in that month for, let's say, $35 Okay, so you just said, I'm going to bundle the whole month's worth.

I'm going to give you a really great price. This is going to create stability and recurring revenue for me. You're going to get everything that I produce. And we're going to call this a digital subscription and we're going to call it the Template Club. And this is what happened. So you launched the Template Club. Was that— what year did you launch that? Was that 2020 when you did that?

It might have been 2020. I'm trying to remember. It feels like it's been around a lot longer than that, but it might have been 2019 or 2020.

Okay. And you started at around 150 to 200 members. They signed up and like instantly, if we think about $35 times 200 people, like instantly you're already doing this work. It wasn't like you had to do this work extra and see if this was going to work. You're already selling them as one-off individual digital files. Now we're just bundling them. Now we're asking for a commitment from people and we're going to try to build some recurring revenue. You got 200 people to say yes. And then as time went on, that got into the hundreds and hundreds and hundreds of people. And so you are building how much recurring revenue into your business right now with this one digital subscription?

Uh, let's do the math real quick. I haven't done the math in a while. We've got currently about 357 people times $35. It's roughly $10,000 to $12,000. And the reason I say roughly is because some of our Painters Clubhouse members get a discount. So not everybody is paying the $35, but it's easily probably $10 grand a month that it adds into my revenue. So if you were to divide that out, that means that each week I'm making roughly $2,500. Well, if I didn't have this subscription, I would have to hope that on the weekend I release them, we make $2,500 every weekend. And then with clothing stores, every time they put out new clothes, We forget about the old clothes. We want the new clothes. And so, you know, if somebody misses a week, they're not going to go back and buy the stuff from last week, or they probably won't. And so by selling it all to them at once in a bundle, it guarantees that, like, I'm making a decent, steady income off of it and I don't have to worry about it.

Are you still selling them as one-offs on Friday and Sell Them? And are you still making revenue from them as one-offs?

Yes. I'm not making as much one-off revenue. But, you know, if somebody signs up right now, they're getting the October bundle. Well, they might have missed out on September's design, so I'm still selling September's designs, August's designs, stuff from last year in September. People are still buying old designs on our website every day.

And you shared with me your retention rate for this digital subscription, which I think is really incredible. Let's talk about that. So once you get this customer in, what's your retention rate on this? Digital subscription?

It stays steady at 99.4%.

0.4. They are coming and they are staying because you are delivering month after month after month something they need, something they want, and something that they can use forever. Like this fall design, whatever your fall designs are, they can use next year and next year and next year. And they, they're going to want new ones. We always want the new fall designs, right? I always want the new fall t-shirt even though I've got 5 in my closet. But you're creating this sticky continuity of getting these designs, and you've made this incredible value with it. So it's a no-brainer to cancel. What, I'm gonna have to pay $35 a week to get these designs, or I'm going to pay $35 for the— and get 4 or 5 weeks of designs depending on the month? And so to anyone that's buying 5 templates or more a month, it is a no-brainer offer and you get the sense of security and stability of having that recurring revenue in your business.

Yes. And my members who have been subscribers for a long time, the common thing that they always say is it's like Christmas on the first day of the month because they love opening that email and seeing what 20 or 25 new designs they get because it excites them again about their business. If they're running a painting business, they get excited about the new designs that they get to sell to their customers. Or if they're just doing this for a hobby. A lot of these ladies get excited to sit down and paint these just for themselves.

Yeah, it's pretty incredible. And I know that we talked about it, it got up to almost 700. We're about half of that right now. And you mentioned to me in our pre-interview notes that, you know, we had other focuses because we just— we talked about the 4 main parts of her business. We launched a subscription box in the last, what, 18 months that that has done incredible. There's lots of things been going on. So your focus on this digital subscription has kind of, you know, anytime we take our eyes off of things, they don't, they don't grow the way we, we can't just blob things out there and expect them to grow. But you came out to SubSummit over the, in the summer, and you were talking to me about a strategy that you took back with you. Let's talk about that and how that's helped you continue to grow this digital subscription. Subscription.

Yeah. So like you said, I'd taken my focus off of it because I'd been growing so many other parts of my business. This was just a passive income sort of thing is what it felt like. And so I hadn't been focusing on it, but after Sub Summit, I was kind of inspired to start doing just one dedicated Facebook Live about this subscription, one a month. I mean, it's that simple.

Easy, right?

Like that's so easy. Yeah. So I just put it on my calendar for the last day of the month, or if the last day falls on a day I don't normally do a live, like I don't like to go live on Sundays, I might do it on a Friday or a Saturday. But essentially, at the end of the month, I will show them, hey, this is what we came out with this past month. Here was week 1, week 2, week 3, week 4. If you don't— if now that you know what all is in this month's bundle, now's your last chance to get it, right? Because the month is fixing to end and a new bundle comes out on the first of the month. And so I'll show them a sneak peek, and it's just a tiny little like thumbnail of part of the design. So it's just enough to give them a teaser of what's going to be in the next bundle, but they don't know. And so they can get an idea of the themes. Like you can usually tell, oh, those look like they might be Christmas designs or whatever. And that simple one Facebook Live a month has really helped it start to grow again. In, in June when I did it for the first time, we added 30 new members. I did it again this month, we added 24 members. And I've also started having my ads lady start running ads to that one live for video views because My perfect, like my average regular customers don't know I even have this subscription because I don't talk about it all the time. We can't talk about everything in our business all the time.

And we're guilty of that. Like we're guilty of like thinking, oh, everybody knows, I don't need to talk about it. Like we do this every month. We do that with our subscription boxes. We do that with our memberships. And it can very easily fall in the same bucket with the digital subscription. Like they know I do this every month. They know I send, I talk about templates every week. I mentioned the template club every Friday. Like they know, but they don't know. They, we have to build the excitement. And that's what you're doing with this live at the end of the month. You're refreshing the excitement about what they got this month. Don't forget all these great things we got this month and you can get them still. And hey, what's exciting? All this new stuff you're gonna get next month. And so you're just doing a great way, you're just doing a great way of building that excitement up instead of just saying, here's our things. Here's our things, here's our things. We're creating that momentum. We're creating that excitement going into the new month every single month. And it's one simple live.

I feel like it's like a digital version of a box reveal.

Yeah.

Like the digital reveal.

Absolutely. You're unboxing the current month and you're sneak peeking the next month every single time. It's incredible. Now, when I think about our listeners, we're mostly product-based businesses, and they're like, yeah, digital subscription would be great. So when I think about a digital subscription, what kinds of things— let's brainstorm with them for a minute. I think about, in your instance, it's how could you make life easier for your customer, and you created a solution for that. So let's just think about I want to just brainstorm some digital subscriptions. Do you have digital subscriptions?

Well, the Template Club. Oh, do you mean do I subscribe?

Subscribe? Yes.

Well, yeah, I'm a member of Launch Your Box. I'm thinking like, I'm thinking like, yes, yes, I am. I just thought of one. So yeah, I'm in a digital subscription where she provides— I'm not sure how to describe them. They're like PNG images that are hand-drawn, like clip art almost. Okay, so the rule is, is that you can't resell any one piece of that clip art, but you can use it and kind of Frankenstein it with words. And kind of, I can use it to design a door hanger is what I'm trying to say. Like, I could take an element that she created and I can use it in a door hanger design of my own. And it's really helped me save time on my designing, and it's also opened up my creativity also by using somebody else's designs.

Yeah, I think that's a great one. It's something that's useful to you in your everyday life. It's creating a, it's creating a solution to a problem that you have. Which is creating these designs over and over again. I think about realtors that get social media templates that helps them do their job. I think about like Stacy Collins that has the printable club where she was crafting and doing all these things, and they were like, I want that print too. And it was just a solution to giving her audience what she was doing. So as you're brainstorming this for your own business, what are people asking you? What do they need more of? What can you provide in a digital way? We've been talking about this a lot for Launch Your Box 2024, creating some done-for-you things. I'm talking about email promotions, I'm talking about email swipe files, done-for-you social media templates, done-for-you things to make launching your subscription box, promoting your subscription box easier. And that is a very easy digital subscription that we can add to our business. And so it just takes a little bit of brainstorming. What do people need? What do people need help with? And it doesn't have to directly relate to your product, but it needs to relate to your audience. What are they struggling with? If you have a pet box, what digital subscription could you provide for them? Maybe that's an exercise routine. Maybe that's training videos. Maybe that's something to help you with your animal, not necessarily it relates to your box. So that's what I want you guys to think about. Now, Tamara, if you were to go back and do the digital subscription again— now I know you said the challenge was coming up with all these designs, so let's talk through the challenge. Like, if you're going to create a digital subscription, there's a lot of design time with these templates. Tell me how you have overcome that challenge?

I've overcome it by creating a theme for each week. So, you know, if this was a something somebody is having to provide, that's like a once a month, just come up with your themes ahead of time. That takes one part of the thinking process out of it.

It puts structure behind the whole—

I work really good if I have like a skeleton outline of what I need to follow. And so by having a different theme each week, that kind of gave us something to go off of. And I hired one extra person in the beginning to help me design these. And me and her, we did it back and forth. And eventually I hired another, and now I am one of 4 of the designers that create. And so each month we will go in there, look at the theme, we'll say I'm going to do 1 for this week or 2 for that week. Everybody kind of calls dibs on how many for each week they want to do, and we just divide up the work that way. And so it, it's hard doing a subscription of anything that makes you feel like you're gonna have to be committed from here on out, right? That feels heavy as a business owner.

It's like a bit— anyone that has commitment issues, they're like I have to do this forever, forever, ever, you know, like, so that it is a commitment issue thing because you're locking yourself into producing this content every single month, right?

Yeah. But I will say I have created a digital membership before where I was teaching something that at the time did serve my customer, but eventually became too heavy for me. And so there's no shame in killing a membership if you have to. I've told Sarah she needs to do a podcast on that whole topic one time is how to kill your membership or your subscription box. But you know, if it's not serving you anymore, then you have to let it go. And that's okay too. But I think having a plan up front and having it long-term planned out, like the, like I said, the themes really helps me a lot.

So when you're creating this digital subscription, do you ever worry that it's going to cannibalize any of your product? Do you worry about having the template club versus having your big box of blank? Do you feel like it competes against the other one?

I did worry about that a little bit in the beginning, but I think what I've realized is that I picture my business in the, in the way it serves people as like a Candyland board. Like somebody will start out at the beginning and they're eventually trying to reach the candy castle at the end where they own— let's say at the beginning you're holding your jigsaw and you're trying to figure out how I even use this thing, how I even use the paintbrushes and the paints that I have. You don't know where to start, right? But as you move along the journey, and you reach the end— and there really, there is no end, to be honest with you. We just continually keep learning new skills and improving ourselves as artists, and we grow from there. But it's serving people along their journey. So while yes, somebody may leave Big Box of Blanks because they've now bought a laser machine and don't need Big Box of Blanks anymore, they're now moving into, say, the Template Club. So I'm serving them at a different point in their journey. I'm still getting their money And actually, if I'm getting their money from Template Club, it's $35 a month versus $75 a quarter. That's more money each year.

And it's digital money. There's no product cost involved and shipping and labor and all those things that we loathe about our subscription boxes. It's digital money. It doesn't— it has your cost involved in this is your time and the time you pay your designers. Period, right?

Yeah.

And so you do that whether you sell one or you sell a thousand, you have the same cost.

And it just, it helps when the revenue from something else in my business drops a little bit to have this passive digital money. It helps with the cash flow of other things. Because if I only had my subscription box with the wood blanks, my costs are going to be so much higher. And I'm not going to have the cash flow to continually buy, you know, new supplies to continually— I don't know, it just helps soften everything and make it where my business can grow and scale a little easier.

For sure. If you are interested in getting some templates over at the Template Club, Tamara, tell them where they can find you.

SouthernAdornmentsDecor.com and all across all the social media channels.

And we'll be sharing a room at a beach somewhere very, very soon because I can't wait to see you. Yeah, go check out Tamara's site if you, if you are a door hanger painter, if you want it, if you're interested in door hangers. She's got blanks, she's got a subscription, she's got a membership, she's got the template club. She has all the things, and it's just a really great way for you to view the overall aspects of her business and how they complement each other in a very, very specific niche. We'll be back next week. We have another digital subscription that we're going to talk about, so I'll see you then.