Before starting, selling or investing in a Subscription Service

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Questions to ask before starting, selling or investing in a Subscription Service





116 due diligence questions.


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Top ten most important questions

  1. What problem is the product solving?
  2. Is the company profitable?
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General

  1. Why have the company chosen a subscription model and not a pay-as-you-go model?
  2. Does it come naturally that the company has adopted a subscription model or does it feel forced?
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Basic numbers

  1. How many active subscribers does the company have?
  2. How many customers have unsubscribed in total?
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The Product

  1. How unique is the product?
  2. Is the company selling several products? If yes:
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The Product (if physical)

  1. How does shipping work?
  2. How do supply and manufacturing work?
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Customer Satisfaction

  1. What is the Trustpilot rating and how many reviews are that based on?
  2. What can the company do to increase customer satisfaction?
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Customer Care

  1. What are the most common types of customer complaints the company receives?
  2. What channels of support does the company provide (email, social media, phone etc.)?
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Marketing

  1. Does the company do any intro offers? If yes:
  2. How do they look like?
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Payment Service Provider

  1. What Payment Service Provider is the company using?
  2. What is the fee schedule for the Payment Service Provider?
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Acquiring Bank

  1. What acquiring bank is the company using?
  2. What are the transaction fees imposed by the acquiring bank?
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Customers

  1. How would the company describe the typical customer?
  2. Do the company aim for long-term customer relationships or short-term experiences?
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Chargebacks

  1. Does the company have a problem with chargebacks?
  2. Have any accounts or agreements ever been closed due to excesive chargebacks?
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Churn

  1. What is the current churn per month?
  2. What is the main reason for customers to unsubscribing?
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Refunds

  1. How often does the company refund it's customers?
  2. What are the main reasons for refunds?
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The Subscription

  1. Have the company experimented with changing the prices and/or renewal period of its subscription product to test the optimal price point?
  2. How can the subscription model be improved?
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Expansion to new markets

  1. Is it easy for the company to enter new markets?
  2. Why has the company kept back from entering new markets?
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Other questions

  1. Are there any technical challenges that are hindering the company from growing?
  2. If the company sells it's product and services in several countries, how is local VAT payment handled?
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