Neil Ateem: Mastering Subscription Model Growth for Scalable Success

everyone wants to scale. That's the goal of every company, right? That's scale as much as possible, as fast as possible but you need to have solid foundations before you can go up with a building, you need to go down first. You need to have a solid base, and then you can build anything on top of that and a solid basis, having a good product, having that social proof, showing the transformations.

Welcome to Super Entrepreneurs Podcast. I'm your host, Shahid Durrani. Today we have with us Neil Ateem. Neil is the co founder of Multiplier, a marketing agency that specializes in helping companies achieve substantial revenue growth. They have generated over 300 million in revenues for renowned brands like, I love this brand, Mindvalley, jordan Peterson, coaching. com and many more. Welcome to our show, my friend. Thank you, Shahid. Thank you for having me. Super excited to be here.

Yeah, it's great to have you. I know it took us a few tries to make it here, so I'm grateful that we actually finally connected. Yeah, it's been three weeks, right? We've been trying to make this happen. All good. We're here now.

Can you share some of the key components regarding a successful subscription business model? Because, you helped Mindvalley by Vision Black County. And that was Impressive. If you could speak about that as well, then how do you determine if the business idea is suitable for this type of model? Sure. So the way I see it, one of the most powerful business models in the world is a subscription business, right? Because there's transactional revenue and then you have subscription revenue.

Transactional revenue is when you pay something pay for something and you get it immediately. And it's a one time one and done possibly a thing with a subscription business is reoccurring. It can be weekly, monthly, annually, whatever it may be. But it's great for longevity of business, for predictability, for actually scaling a business, right? Now to have a successful subscription, you need to constantly provide value because they're paying for value now and in the future. upon renewal.

So you have things like your churn rate, which is the percentage of people that drop off and everything right now. One of the things with a subscription is you're always fighting to not have a huge churn rate, right? You don't want people dropping off and not continuing their subscription, obviously. So the only way to do that is to make it something embedded within their lifestyle or keep giving value, right?

So I'll give you two examples. Massive example Apple sells iPod, iPhones, Mac book, but they also have software subscriptions and stuff. But when you think about it, if you zoom out, Apple is actually a subscription company because you don't buy an iPhone once in your life, you buy it every couple of years, so it may not be you subscribing every year, it's the same. You pay for iTunes or iCloud and you pay for that monthly.

So they have so many subscriptions in there and we don't even realize it. You might buy a MacBook, for example, like I buy a MacBook every couple of years, every two, three years, because I need to keep on top with the speed and, the performance decline. So that is a subscription. We don't see it as that it may be a transactional revenue at the moment, but once you're locked into the ecosystem, you're there and you're a subscriber for life almost, right?

Most people at least, and they keep providing value. They keep dropping new products because they know they have a loyal fan base. Let's take another huge company, Coca Cola is a massive company. People don't realize this, but this is a subscription company. Like when you buy a Coke, you don't drink a Coke once. People drink this thing daily and it may not be even the end consumer on a B2C side.

It's on a B2B level because groceries shops, whoever buys Coke, they're buying bulk and they have to keep restocking every week. So that's a subscription to Coke right there. Exactly. So now let's zoom down now to the average person. Let's say you have a creator who has a community. They want to do a subscription compared to selling an online course, which is something we help them do as well, right?

So it can be a big company or it can be create a level, but how can they keep delivering value week on week as they grow, as they learn more stuff, as they can keep adding value to someone, they'll be willing to pay for that. Maybe it's a monthly subscription or annual subscription, whatever it may be, right?

Yep. And you mentioned explicitly with Mindvalley, which is where I worked on their membership and we launched that from zero, 20 million the first year and now it does, a hundred million plus, but the way that was done is Mindvalley was on this transactional revenue path of selling individual programs. There were over 3, 000 plus programs, right? And we cut that down to one single product offer, which was the membership subscription.

And why did people opt into that compared to purchasing one program? Because it just made complete sense to actually pay annually and have access to everything instead of just buying one individual program.

And of course, there's a lot of experimentation that goes into this in terms of like your price points and what exactly is the user journey in there, the user experience in there, the community element, because a company at that scale, at that size, you need to have much more than just an online program, right? Because. They have one of the highest completion rates and they have a methodology that actually gets people to stick and consume as well.

Plus the community element is huge in there, so there's all these elements, but yeah I know I went off on a tangent, but just sharing, how powerful subscription, yeah. How powerful subscription business and then we don't even see it. Yeah. Because it's hidden in our everyday lives, but the best businesses in the world are subscription businesses.

Yeah. And especially since, 2020 or mid COVID a lot of e com businesses didn't realize the importance of subscription, they missed out because they might've had to close doors or exit. And the ones that had subscriptions, they're they actually grew. Yeah, during that time, especially in the digital office space, right? Because we know that the physical world was very restricted, right?

Depending on where you resided at the time, some people couldn't even leave their house unless they had to get groceries or go get medical help. So it was that bad. So businesses who were in the physical space, a lot of them closed up. All of this. But one type of business that actually prospered was the businesses that had digital products and offerings and, platforms, anything that was online, basically. And of course, from a subscription perspective, yes, exactly what you said.

They did thrive and prosper because of their business model in that time. Nothing is the best, let's say, it stood the test of time and during that period which was crazy and never happened in my lifetime or maybe your lifetime as well. I don't think any of us something at this level it did happen and we actually get to see firsthand what type of business actually would survive something like this. The possibility of it happening again is very high, because it's in everyone's mind still.

And there's always something new. Of course there's pushback of course, from people not wanting something like this to happen. No one wants this to happen, but it can happen. So it's building your business and your business model in such a way you can mitigate risk. Basically, so it helps a lot and then, yeah, it's ongoing cash flow is dependability to ensure that you're paying your bills and making a profit is good for getting funding. And there's so many benefits.

That's why I was excited to talk to you about this, because I saw the numbers. I saw what you did for mind valley and that's just incredible. Boy, he, I don't know his full story, but how he. Put this together and he's utilizing, experts in the field and sharing with them, right? A platform where they can add value to people and then people get the value by having many offers under one login. Yes, exactly. And that's a really unique case in this industry, right?

Like the whole self help, personal growth continuing education. Because it covers so many things. It's not just health or mindset or businesses, everything brought together, and what makes it powerful Mindvalley, the way it's set up and the way we position things is that everything comes together, to build this complete human being. So you may come in for one thing, which may be your health, let's say, and you enroll in a program that helps you, get into the best shape of your life, maybe.

But then after that, there's always something next, right? And we need to provide this. And that's the thing. The subscription does provide this. So it becomes a no brainer offer because you wouldn't do one thing. You may come in for one thing, but when you get exposure to other things that you know you need to work on, it becomes a no brainer. Like I said. So you may come in for help, but then you want to go into your mindset and then, you want to further develop your career.

And then after that, you've got your raise and everything you know how to communicate in the workplace, after that, you may think, Oh, I want to start a business now. We provide that, right? So it's a thinking about the future as well. When you solve one specific problem, no, with your product, with your subscription, you're What is the future problem that this person may have your ideal customer, your ideal avatar, and you need to solve that too. Or else they're going to leave you.

They're going to go somewhere else. So it's thinking in ecosystems and not products. I think that is one of the most powerful thing. Yeah. Cool. Neil.

For your firm, when you work with someone to, to create such an offer or to help them grow depending on the client, but is there a percentage of how much they would have to invest in paid advertising to grow your strategies, or do you also utilize organic? When you help them, so it's a case by case, right? So I'll give you 2 examples. Right now we're working with. We work with quite a few clients but not a lot because we're bespoke, a small team, very lean and really high level, right?

I'll give you two examples. We have a creator with over a hundred K Instagram followers and with this person we haven't even touched ads and we've already generated almost, I think over 200 K in revenue within the last, I would say five months. And it's because we spaced out two launches. So over two launches. We generated over 200k and strictly organic. He has no email list.

Nothing else just instagram following because he was at this place where he was positioned just he did all the work, to build up the following give value all of this and we could just leverage his organic following Now, of course, something like this that just performs so well off the bat, without any testing or anything really is poised to really do well on ads.

So when we do turn on the ads and start optimizing from there, because right now we're in this phase of building his funnel and everything we're doing there's many different types of funnel you can use depending on your product, your offer, right? So there's VSL, there's webinar. So in this case, we're going to be doing webinar.

But. That was the case of a creator and he didn't even have his product when we sold the first time it was we, we knew something called pre product strategy to doing the launch. So people opted in because this was such a great product that they wanted that they paid for it before we use that as funding to actually develop the product. We deliver it, they loved it. And of course we launched again. So that is the case of a creator that we work with.

Now in terms of like ads and stuff for the companies or creators that are already on ads and stuff, we can utilize that, right? Organic. You utilize everything when you're doing launches or scaling, whether it's a launch or evergreen. Now, we have a company doing over 50 million where we're in the process of scaling them to 100 million. So that's the goal within one year. It's a hugely ambitious goal, but we have to do everything in our power to make that happen because that's what we do, right?

Yeah. That's how we roll. Exactly. Why is this aim for we don't aim for linear, we always aim for exponential and even if we fall short, yeah, like it would be above whatever, the status quo is, like 10%, 20%, we don't like that. Yeah. It doesn't drive. It doesn't drive us, so we like the big picture thinkers. So in this case now. What we're scaling on is ads because they have the budget, they're getting the returns.

So we just need to figure out how to get them spending, hundreds of thousands month on month maybe up to a million a month. That is the goal, right? And beyond that, and we have companies that have already doing that, like they had spent. Is about anything, that any small company operator would be doing, but getting back the returns and everything is super important, right?

So if you know you're spending on ads and you're making, let's say 150 percent ROAS, which is every dollar you spend, you get back one 50, then you scale that thing. But you need to scale smart as well, because if you go too fast, your numbers are going to tank. If you go too slow, you're going to be losing out. So just having that approach to scaling is important as well, right? So it can be 10%, 20 percent week on week, even day on day, if your numbers are really good.

So it depends case by case. And that's on the ad side. Now, of course you want to keep your organic whether you're doing socials, whether you have an email list, all of these things you need to leverage as well, right? Whatever impressions you're getting, you need to know how to capitalize on this. A lot of companies. Or creators, they may have a lot of visitors and stuff.

And when you think about it, like when you have someone visiting your site, your offer, you may convert a couple of percent of them, right? Let's say, I don't know, 5 percent possibly. That means 95 out of 100 people come visit your offer and just leave. What happens to those people? So if you don't have a plan on how to actually, engage with these people, get their email address. Maybe then you're losing there, right? You're only at 5 percent efficiency at that point in time.

So they may not purchase right there on the spot, but you can provide value to them somehow at all at that time. Without the purchase and actually get them to convert later on, so yeah, it's just so many moving pieces but you start from that point where you're already seeing traction basically. So From what I said with the creator, he's already seeing a lot of traction on organic So we scale that and then we also add in ads because why cap You know, why just do one thing?

If your goal is growth and exponential growth, you have to do to do everything, but one at a time and you start with the most potent. So that's a little bit about the approach. Yeah. No. That's awesome. Can you share some strategies I'm acquiring, for example, the first thousand subscriptions in that model. Yeah, okay. This is like a zero to one kind of strategy that just starting off. If you're just starting out, maybe subscriptions. May not be the best option for you.

I think subscriptions usually work when you have a more mature market, when you have built trust, you've built authority and people have seen you around for a while, you've built up a relationship before anything, so my personal approach, I probably wouldn't start off the bat with a subscription, but once you have your first couple of customers with the regular product, whether it's an online course, whether you have a community, whatever it may be coaching after

that, then you get to see why do people come to you in the first place, right? That's one thing. What problem are you solving for these people? And then after you solve that problem, what would be their future problems that you can help them solve? And that would help you actually develop something like a subscription. Because like I said, subscription is about future value as well, right? It's about them anticipating like, Oh, I will need this in the future. I love music.

So I subscribe to Spotify and I know I'll be using Spotify in the future. But if someone tells me I have a subscription and I give you XYZ, I need to think, Oh yeah, this is something I would use one month from now, two months from now, one year from now when I need to renew. So you have to think along those lines, right? With a subscription product, it needs to be a value in the future. Not just now, not just solving something now.

Yeah. So Neil you mentioned churn rate and that is a challenge, especially in the subscription business, right? Are there any tactics or any strategies to, reduce the churn rate and then, and increase the customer lifetime value? Yeah. Of the main things as I keep going back to is the value that you give, right? If something is valuable to someone they would hold onto it, right? They won't churn.

Now, with that being said they need to be at this point where they know more value is going to come as well, because the thing that got them to sign up may be solving this problem now, but they must anticipate. The expectation. Exactly. Exactly. It's expectation. They, even if you have a subscription or something, you must showcase somehow that more stuff is going to be added, more value is going to be added. So it makes sense to them to stay in there.

It's not just, Oh, here's three courses in a bundle and I'm going to create a subscription here. No, it must be like, yes. I'm creating a new program that takes it a level higher. So then they know, Oh, I'm going to get this and this. And it's going to keep coming because you can have a subscription and that's it with a transactional model where you create something and you sell it once. It's completely fine, but with a subscription, the value needs to keep coming.

So that's how you actually retain people. Now, beyond that things like bonuses you mentioned tactics and all of this, right? People do a hell of a lot of things giving people opportunities or access or, community or bonuses, you can go wild with it, right? But it completely depends case by case. What is the scenario? What is the product exactly? So it all depends, but yes, the main thing is the anticipation of future value as well.

So let's say you have a subscription and the one year mark has come and it's time for them to decide, am I going to leave this? Am I going to log into my billing and cancel the subscription? But if they know, Hey every three months, This guy just delivers value. This girl just keeps delivering value to me. I'm going to stay in here, this company, whatever it may be. It needs to be that anticipation of the future value as well. Good. Makes sense. Now for

scaling a subscription model, can you share some pointers there? Oh, in terms of scaling, it's okay. What, what does scaling even mean? Scaling is simply. The acquisition of more customers and more your existing type of customers. And that can, we touched on that before, whether it's ads, whether it's organic, all of this. But I'll tell you this, one of the biggest levers for scaling is social proof.

So let's say this summer you're walking through Europe and then you're deciding, ah, I want to get something to eat. I'm with my family and two restaurants. One. Where there's a bunch of people already and one that is completely empty, which one would you go for? Possibly the one that already has people, right? Because they're social proof there. . So it's the same thing with any product. Once you have, you can show, hey, these are the transformation coming from people.

These are the stories that I'm getting in. And you have a community that's built up, let's say you can already showcase that because it's social proof compared to someone or some product or some community or some subscription where there's basically crickets, because. I'm pretty sure there's many products out there that does music streaming, but why do people go for Spotify or Apple music? Because it already has huge social proof.

Everyone is already on it, so when you ask a friend, it's a good test. When you ask a friend, what do you use? Whatever they recommend is most likely what you're going to use. So it's the same with anything in the world. People usually consume within clusters, let's call it. So if I'm a guy who loves marketing, I love to travel.

I'm most likely in a cluster of people that are into the same thing, whether it's an online community or whether it's in person or whether it's my friend we tend to, be around our own, let's say. Think about it from a word of mouth perspective. If someone is in your subscription they must be willing to tell someone else Hey, you need to check this out. This is a great subscription.

And of course that is not scalable because it's just one to one, but as you get bigger, it does become scalable, right? Apple products. Let's say for example everyone has one and then what would you recommend if you have one to anyone? And so on and so forth. But today that is hacked, right? Because we have things like user generated content and stuff. So people who have huge following, it may not be their friend right next to them, but they may have.

100, 000 people following them on Instagram or whatever the channel may be. And all of these people listen to what they have to say, so whether they're interested in health and fitness or mindset whatever they recommend to this audience, the audience will opt into that, so that social proof element is huge.

The way you get that off the ground, like if you're starting from zero is of course, getting the best testimonials, getting the best story, showing the transformation that your product actually brings to someone's life. And if it's genuinely adding value, then it should take off on its own. It should start building momentum from there. So nothing beats the Jack of Valley.

Yeah. So baby steps initially to start sharing the experiences of others, to share what this brand, what this company is delivering. And it might be slower in the beginning, but once you have basically a somewhat of a foundation, you can scale from there. Yes, exactly. And that's the thing, everyone wants to scale. That's the goal of every company, right? That's scale.

As much as possible, as fast as possible, but you need to have solid foundations, before you can go up with a building, you need to go down first. You need to have a solid base, and then you can build anything on top of that and a solid basis, having a good product, having that social proof, showing the transformations. That's what you would help with.

If someone came to you and they're just starting off, your strategies will help that company create processes where they can bring in that value as soon as possible. So they can scale. Yeah, exactly. And these are like the creators or the scale ups, compared to the company, like I said, already in the tens of millions, a hundred million. So we call these the creators and the scale ups.

Sometimes their product isn't even type, but we do help them with refining and and actually developing this, getting their first product to market. Like I said, with the greater example, we actually help this person test that product before it actually went live, verify that. There's demand for it, by surveying his audience, all these kinds of things you can do because everyone kind of babies, the idea they think, Oh, I have the best, most genius idea, but yeah, you have to test it out.

Like before you go thinking resources and money and time and effort into anything, it's always good to test. And one of the. The basis, of marketing is testing. Like you have to be testing always.

What are your thoughts on creating a referral program? Referrals. So yeah, referrals generally work really well. The thing is for subscriptions or transactional, it. it works the same, right? But it comes down to incentives. Like what is in it for me? So referral at mass, let's say, because for me if I refer something to you, let's say a program that I'm in, or, something that I'm using, I may get, like 10 bucks or something. But if you want to do this at scale, you need to give more.

So bigger companies like the mind valleys and stuff. stuff, they have like proper referral programs. So people actually go out there and want to become affiliates or super affiliates. So it's more the affiliate line because referral has the context of a friend referring a friend, which is good, but it probably won't be huge, but if you think about it from an affiliate perspective okay, how would someone what would incentivize someone to be willing to actually sell your product for you?

And. The thing is usually the percentage that you give on revenue, right? And if you have a digital product, it's a no brainer to even give 50 percent because or even more so some people do, it's crazy because your economy is on scale there, right? Like you're not paying every time. Online courses. So why not? Because it's a new customer in the door who would, if you have a subscription would renew again, or one customer in maybe three customers later coming from that place.

And that, that's the value of it. So you can think in the terms of like incentives, like everything works with incentive, right? I think it's Mungo, Warren Buffett, who speaks about this, but either one but yeah, everything comes down to incentives. If you can reward that, then you can scale it. Perfect.

Neil, it was amazing talking to you today and learning all about subscriptions. I'm sure we added some value in the market. I can hear you have. Intelligent type of thoughts when it comes to growing this type of business. And I learned a lot as well. If you have anything else in the future that you wanted to talk about, come back on the show. Oh, I'll be happy to. And if you don't mind I'll leave. Your guests with a little that we can leverage in their business. So if you go to multiplier.

agency. com, I have a sales page in there that we have developed over, like a dozen years of testing iterations and thousands of tests to get to this point where we have one of the highest converting sales page industry wide with subscriptions, with online products, with digital products mostly. So you can check that out and grab that for free, and yeah, any one of you out there needs a little help with your business, just feel free to reach out.

I'm on LinkedIn, Instagram at my name, Neil Atim, and I would be happy to help out. Perfect. Thank you so much, Neil. Thank you for sharing that and keep in touch. All right. Awesome. Thank you, Shahid.