5 Tips for building the perfect eCommerce subscription strategy
David Cross |
Launching and maintaining a successful eCommerce subscription program takes effort, but that doesn’t mean it needs to be hard.
In a recent webinar, Jamie Johns, Ordergroove’s Sr. Strategic Client Director, sat down with Chelsea Jones and Rachel Saul, Co-CEOs of Chelsea & Rachel Co., to discuss how merchants can build a holistic eCommerce subscription strategy.
Below, we’ve highlighted the most important tips and tricks from the discussion. To get more advice, watch our on-demand webinar How to Build the Perfect eCommerce Subscription Strategy.
Tip 1: Do Your Research
Before launching a subscription program, you need to collect as much data about your current sales efforts.
“Data informs decisions,” Rachel said. “When creating a program or redrafting your program, as much data that you can inject into your decision making is really going to make a strong strategy.”
Specifically, merchants should devote significant time calculating their margins and determining if they can support a subscription program that offers both a discount and free shipping.
Rachel emphasized that free shipping is no longer a nice-to-have capability — it’s critical to success in eCommerce.
“Consumers want free shipping and they definitely want it on subscriptions,” Rachel said.
If your company’s price matrix can’t support both a discount and free shipping on all orders, Rachel encourages using a free shipping threshold.
Tip 2: Focus on Consumable Products
What products are right for subscription? Consumable products.
“Look at the products that have a consumable nature of 30 days, 60 days, [and] perhaps 90 days — but really no longer than that,” Rachel said.
Why not longer? According to Chelsea & Rachel Co.’s internal data, the average consumer usage for a product is about 45 days.
The benefit of consumable products for subscriptions, other than the obvious, is that merchants can incorporate capabilities that enable subscribers to swap out a product for a different variety.
This, in turn, keeps the subscriber from canceling and increases their customer lifetime value (CLV).
Non-consumable products or products that fall outside the 90-day recommendation still have a place in a brand subscription program, Rachel said. You can offer these products as one-time add-ons or include them as a gift with purchase.
Tip 3: Know Your Potential Subscribers
You should gather as much information as you can about your core repeat purchasers. This will help you understand the products they prefer and the messaging you’ll need to implement to entice them to subscribe.
Start by creating a persona. “A subscription isn’t for everybody, but it is for a core group of your raving, loyal fans,” Rachel said. “You want to understand what benefits attract them [and] what items will keep them coming back.”
Once you’re armed with this knowledge, you can craft relevant messaging and integrate it into your acquisition channels like text messaging and email, as well as your homepage.
“Your subscriber is really unique and you want to make sure it’s not a vanilla, cookie-cutter type of messaging,” Rachel said. “You really want to tailor it to them.”
Tip 4: Delight Your Subscribers to Stand Out
Merchants are launching subscription programs at an astonishing rate. One repercussion of this is that brands must work harder to differentiate themselves from their competitor’s programs.
You can make your program stand out by delivering a delightful customer experience at every touchpoint.
“The differentiation really isn’t in the tactics,” Rachel said. “What’s different is what the customer gets at the end.”
She said to stand out merchants need to consider the entire customer journey and every interaction they have with your brand.
“That’s why boxing is really important,” Rachel said. “That’s why what’s inside the box is really important.”
Both Rachel and Chelsea emphasized that brands should think of their subscription program as a “membership” experience. You want to make the experience easy, fun, and exciting. For example, you can provide access to digital content and include gifts with purchase.
Tip 5: Give Subscribers Flexibility
The primary reason subscribers cancel their orders is overstock. To keep subscribers from saying goodbye, offer them more flexibility, including the ability to pause or skip orders and swap products.
“One thing that I always remind our clients when we are going through the cancelation mitigation strategy is that a majority of customers are not canceling because they hate you or they hate the product,” Chelsea said. “It’s actually the opposite — they just have too much [of your product].”
It’s also critical that merchants don’t use cancelation roadblocks.
“We hear from a lot of merchants who want to put up roadblocks to keep customers from canceling,” Jamie said. “And what we see time and time again, is that is not effective in keeping customers long-term.”
Both Rachel and Chelsea agreed that merchants shouldn’t make cancelation difficult and that merchants should, instead, make the experience pleasant through creative and fun messaging.
“It’s really important to make that customer feel like they are leaving with a warm hug because if they love the brand, and most likely the majority of them do, they’ll be back,” Rachel said. “You don’t want that final goodbye to their subscription to feel like it was stale.”
For more subscription insights, watch our on-demand webinar with Chelsea & Rachel Co.