Strutta Media Cures One-Off Blues with Social Suite

Strutta Media | BCBusiness
Strutta Media uses tools to create repeat business.

Create repeat business by offering easy-to-use tools

One-offs, or single projects, are the bane of every service business. While they are often the mainstay of the business, they also mean irregular use of resources and unpredictable income flows. At some point in its life, every service business plagued by the one-off blues starts looking for a way to stabilize its client list and earn recurring revenue.

The Problem

Strutta.com Media Inc. has become a Vancouver tech success story for its sophisticated but user-friendly online applications that help its customers create contests or sweepstakes for marketing and promotional purposes. After its launch in 2009, companies including Crate and Barrel, Johnson & Johnson, Land Rover and Adidas – as well as hundreds of small businesses and not-for-profits around the world – signed on.

Although there were monthly base charges for each of its clients, Strutta’s products were used primarily in campaigns that came around only one or two times a year. As a result, Strutta found that many of its clients would disappear for months on end – sometimes much longer.

This meant that the company had to operate in constant client acquisition mode – a tough marketing chore, because it’s far more expensive to source new clients than to maintain regular ones. Strutta also found that companies that launched the big promotions required a great deal of custom work, which, while bringing in annual revenue, meant peaks and valleys in revenue flows throughout the year. This in turn played havoc with its staffing and cash-flow systems; the company had to staff up for a project, but the payment for that staff didn’t come until later, after the project was over. This mismatch between Strutta’s business and revenue rhythms meant it had to design a system that would create more predictable recurring revenue.

The Solution

Strutta’s strategy for finding recurring revenue involved a change in its business approach. Most of its clients were big businesses, so in early 2012 Strutta launched a “social suite” of do-it-yourself applications for Facebook that smaller companies could easily use. Mighty Apps, as the suite is called, provides media galleries, a news tab or bulletin board, a feedback form, couponing and voting methodology, all for a $99 monthly subscription. More importantly, it requires no custom work on Strutta’s part. Essentially, it is a machine that brings in money every day and night through subscriptions – the Holy Grail of the service business.

The subscription-based model provides a repeatable and predictable revenue stream that supports the more advanced work that Strutta does for larger companies with its corollary revenue ebbs and flows. In fact, Strutta liked the predictability so much that it has created another revenue-predictable app, this time for more sophisticated users.

Lessons

• Know what you’re good at. You don’t have to abandon your business model to create a predictable revenue stream; you just have to build intuitive, friendly tools that customers can use.

• Don’t be afraid to diverge from the core. You can’t let yourself be paralyzed by what you do know. Continuing on the same track will only create the same results, so find a variation on it that will create a different revenue stream.

• Step and repeat. Tools allow you to repeat your service for multiple customers without excess work. If you’re in a pure service business, create a tool that does some of what you do; if you already have a tool, create an easier one.