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Building a Recurring Revenue Model

*Link to Video

Description: The objective of this video is to share
how home delivery is shaping consumer behavior.
It goes beyond consumer behavior into how consumers make purchasing
decisions. The power and strategy to
build a recurring revenue model through automated monthly recurring orders is
highlighted and the benefits thereof.

Learning Objectives: The learning objectives of this video are to
educate entrepreneurs on how to use e-commerce and natural consumer behavior to
create residual revenue without requiring a consumer buying decision each
time. In addition, viewers will absorb
the following takeaways:

-
Background of home delivery

-
Understanding recurring revenue business models

-
Recognizing consumer behavior patterns

-
Articulate benefits to standing monthly orders

-
Importance of embedding monthly buying habits

-
How to minimize purchasing decisions with
increased buying frequency

Summary: This video presentation was produced as
part of continuing education for Independent Business Associates (IBAs) of
Simplexity Health, a life-sciences company that develops algae-based
superfoods. This video clip discusses the benefits of AutoShip, an
ultra-convenient, streamlined delivery program offered by Simplexity. It artfully illustrates the advantages of
standing monthly orders, the importance of imbedding monthly buying habits in
consumers, and the benefits of recurring revenue business models, along with an
impressive history of the home delivery industry.

Home delivery of goods has been an evolving industry for
generations, dating back to the early 20th century with the delivery
of milk and eggs to the now first-class AutoShip program offered by Simplexity. The concept of home delivery is much more
prevalent now than it has ever been in the past. The meteoric rise of internet retailers, such
as Amazon and Zappos, has made an industry that people were once extremely
skeptical about mainstream. Who would have ever thought a woman would buy a
pair of shoes over the internet that she had never tried on! Online retailers like Zappos have made it
safe for consumers to buy from them because of consumer friendly privileges
like free shipping on returns and guaranteed satisfaction. They opened the door for other industries to
adopt similar practices so that now virtually anything can be purchased online
and delivered directly to the customer’s doorstep.

The direct selling industry has pioneered the concept of
auto replenishment of consumable goods.
This brilliant delivery method operates on the concept that consumers
can have important, frequently used items delivered to their door on a monthly
basis so that they never run out. Today’s consumers are busy. Sometimes too busy to make that needed trip
to the store. So by eliminating a trip
from their “to-do” list, these companies are creating loyal customers by
offering a service to them as well.

Simplexity has taken the auto replenishment concept to a
whole new level. They have created
incentives that make the AutoShip program so enticing, through discounts on
wholesale and free shipping, that it is the only logical purchasing option for
the consumer. At the same time, the IBA
also reaps rewards, such as continual monthly retail volume and customer
retention, which creates a win-win for the consumer, the distributor, and the
company.

This recurring revenue purchasing option is so powerful and
successful that it has transitioned the company away from random individual
purchases and from bi-monthly or quarterly AutoShips. There is one very critical reason: consumer
behavior patterns. If a consumer has
their products billed on a monthly AutoShip cycle, they view it as a budgeted
monthly expense that gets integrated with all of the other monthly
expenses. However, if it is a bi-monthly
or quarterly expense, the consumer is forced to make a purchasing decision
every other month or quarter. This is
not a good thing. If they are
continually forced to make this decision, if funds are tight at that time, they
may opt not to continue purchasing.
Whereas if they were on a monthly program, they wouldn’t have given it a
second thought because budgeted monthly expenses, like the phone and cable
bill, are almost like second nature. It
is a grave mistake in this industry to complicate the purchasing process with
multiple purchasing options. . A monthly
AutoShip program helps your consumer make the right purchasing decisions
without them ever having to think about it.

One of the biggest things AutoShip has done for Simplexity
is simplify the buying process. A big
business must be simple, not complicated.
Simplexity has combined their products into three simple packages based
on lifestyle that are available on AutoShip. This has taken all of the guesswork out of
helping a new customer decide which products to order. All the distributor has to do is inquire
about the consumer’s lifestyle and find out which package will best suit their
needs.

Another benefit to a monthly AutoShip is that it ensures
that the customer is consistently consuming the product. Consistency is what
success in life and health are all about.
Since the products are sold in 30-day supplies, a monthly AutoShip is
the only option that makes sense. If the customer is not consistently consuming
the product, they are not going to see the health benefits. If they are not seeing a difference in their
health, they will not continue purchasing the products. If a distributor is having a retention
problem, it can often be traced back to their lack of monthly AutoShips

In this industry, the goal of the company is to train
consumer behavior. So by making a
monthly AutoShip the easy, best-value purchasing option, Simplexity is training
the consumer to consistently consume and purchase their products every
month. In doing this, the company
creates a continuing revenue stream for themselves and their distributors,
making it a viable, profitable business for both.

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