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Unpacking The Subscription Economy (Series) – 9. The Peace of Mind Subscription Model


This series of articles follows on from an article I published recently, titled “Unpacking The Subscription Economy”, where I mentioned that subscription businesses are more valuable and appealing to investors than traditional businesses, because they are more predictable to operate and they extend the lifetime value of a customer. This article looks at The Peace of Mind Subscription Model.


The Peace of Mind Subscription Model

The Peace of Mind Subscription Model involves selling an insurance premium to something your customer hopes they will never have to call upon.

For example, if you install roofs, you could offer a warranty program where you ask your customers to pay you a small amount of money each month for the peace of mind to know that in the event that their roof starts leaking, you will come and fix it at no charge.

People with dogs always worry about losing them, and that’s where Tagg comes in. With Tagg, a pet tracking service that had 30,000 subscribers in 2013, you can keep an eye on Rover for $7.95 per month. If Rover leaves a specified area (that you determine), you get an alert on your smart phone. If you want to monitor the whereabouts of your car, and be notified of its location in the event of theft, you can subscribe to LoJack Stolen Vehicle Recovery System. LoJack will also keep an eye on your MacBook for $39.99 a year. And if your dad suffers from Alzheimer’s, for $30 a month LoJack’s SafetyNet will track his location through a GPS-enabled wrist band if he goes missing.

Businesses also buy peace of mind. Website monitoring companies like will keep an eye on your website and notify you if there’s a problem. Radian6 pioneered the “online reputation monitoring and management” industry before they were acquired by Companies like Honda and Cisco use Radian6 to listen to the conversation about their brand on social networks so they can tell their side of a story if bad buzz arises online.



How Insurance Companies Make Money
  • Like all insurance, The Peace of Mind Subscription Model is selling the serenity of knowing you’re covered in the event of a catastrophe. Most people think insurers profit by charging more for premiums than they pay out in claims; but the real money is made from ‘float ‘ — the money you make investing the cash people pay in insurance premiums before they make a claim.
  • When leveraging The Peace of Mind Subscription Model, you can limit your risk by:
  • Offering the subscription to a handful of customers so you can get a sense of how often claims are made.
  • Limiting your customer offer. In the roofing example, you could offer to cover repairs up to a certain dollar amount, or for damage caused by a limited number of reasons.
  • Buying an insurance policy of your own that covers you for an unexpected volume of claims.


Who This Model Works Best For

Consider The Peace of Mind Subscription Model if you have:

  • A business where you can absorb the cost of a claim by leveraging your existing assets rather than paying out cash. In the roofing example, you already have the crew, ladders and trucks for installing roofs, so your cost to honor a claim may be minimal.
  • A history of customer service calls, thus enabling you to predict the likelihood and frequency of a claim.


What The Insiders Say
  • Limit your risk. Premiums may look like free money, but you need to ensure you have the resources and infrastructure to honor your commitment if your customer calls.


Recurring Revenue is one of the “8 Key Drivers Of Company Value” from the Value Builder System™️, which I use to help small business owners increase the overall value of their businesses.

Being able to cash out the maximum when the time is right, is every business owners dream. It’s the dream of having a long and happy retirement, without financial worries, and being rewarded for all the hard work they put in over the years. But so many fail to get this right, because they never formally worked towards that goal, they thought it would just happen.

So if you’re a business owner who’s planning ahead and considering ways to exit your business on your terms, I hope the information I provide in the coming weeks will help you reach those goals. If you would like to chat to me about this in person, feel free to book a slot in my calendar and we can discuss it further.



FREE Assessment:

If you want to see how you score in each of the “8 Key Drivers” right now, take 15-minutes to complete this survey and you’ll get a comprehensive 25+ page report benchmarking your business against its peers, plus 49 tips on how to improve those 8 key areas.


8 Key Drivers Of Company Value Assessment