eCommerce’s move from one-time transactions to long-lasting relationships
David Cross |
The eCommerce landscape is changing rapidly. Competition is on the rise and acquisition costs are higher than ever before. To succeed, merchants are turning to subscriptions to build long-lasting relationships with their most loyal customers.
At a recent webinar hosted by GROW, Ordergroove’s Head of Alliances Eddie Hsieh spoke with Ellese Symons, VP of marketing for CBDistillery, and Daniel Kim, director of eCommerce for Hawaii Volcanic Beverages, about competition in the eCommerce landscape.
During the wide-ranging discussion, Ellese and Daniel touched on why their companies implemented a subscription program and tactics merchants can adopt to increase retention.
An Influx of Competition
Competition in the eCommerce space has increased dramatically in the last several years. As a result, CBDistillery and Hawaii Volcanic have shifted their focus from acquisition to building long-term customer relationships. To do this, they implemented a subscription offering with Ordergroove.
Ellese says that decision to implement a subscription program was multifaceted. Increased competition was at the center of their decision-making process but CBDistillery also saw subscriptions as a way to maximize the health benefits of CBD for their customers.
“Subscriptions give you the opportunity to speak to your customers organically about using your products consistently,” she says.
Hawaii Volcanic implemented a subscription program with Ordergroove in November 2020. The company’s goal was to protect their customer base and to grow a predictable revenue stream that would help them optimize their resources and grow more efficiently.
“Subscription is a huge driver of our revenue today — it’s a big part of our business,” Daniel says. “It helps protect our brand and our relationship with customers.”
Expert Advice: Retention Tactics That Work
Since launching their subscription programs, both CBDistillery and Hawaii Volcanic have seen impressive results.
CBDistillery achieved their yearly subscription revenue goal in just 90 days and has an 89% retention rate. Meanwhile, Daniel says that Hawaii Volcanic’s opt-in rate for new subscriptions is higher than what he’s experienced at other companies and that the program’s cancelation rate is significantly lower than the industry average.
A large percentage of CBDistillery and Hawaii Volcanic’s ongoing success can be attributed to their retention efforts. Below Daniel and Ellese break down how they keep customers coming back for more.
Offer subscribers flexibility
Through customer research, Hawaii Volcanic learned that offering subscribers flexibility drives strong relationships
For example, Daniel says that he’s learned that customers might love Hawaii Volcanic’s product, but changes in their daily lives mean they don’t always need a constant supply of water deliveries.
“Some of our customers go away for vacation or travel and don’t drink as much water,” he says. “We give subscribers every opportunity — and make it easy for them — to change their subscription whenever their life changes. With Ordergroove, we made it easy for them to pause or skip their subscription if they need to.”
While it might seem counterintuitive, Eddie says that giving shoppers the ability to pause or skip orders is a valuable capability. In the long run, it’s better to retain a subscriber than to lose out on one order.
Treat subscribers like VIPs
In addition to offering flexible subscriptions, Daniel says that merchants can succeed by adding more value to their subscriber experience.
“We make sure our subscribers feel like VIPs,” he says. “Anytime we release a new product, we give them the first shot before anyone else can purchase. We give them the best deals as well. Whenever we run promotions, we try to do exclusive offerings just for our subscriber base.”
CBDistillery also focuses on delivering a superior customer experience. Ellese personally contacts customers who have canceled their subscription to resolve issues.
“We’ve had a great response from that,” she says. “It’s tedious and it takes time, but it has enhanced the customer experience. It really makes customers who are subscribers feel like VIPs. For those who commit to us for the long term, we really go the extra mile.”
Perfect communication and education
CBDistillery has found that subscribers have different needs than non-subscribers. As a result, CBDistillery has developed a communication strategy for subscribers that focuses on education.
For instance, Ellese says that CBDistillery educates subscribers about the potency of different CBD products. Without that education, subscribers are likely to overestimate how much they need and overorder. This, in turn, can lead to overstock — a common reason subscribers churn.
CBDistillery has also focused on creating content that helps subscribers manage their subscriptions. A large portion of the supplement company’s subscriber base is over 65 years old and less adept at technology.
“We are creating video tutorials and making it as easy as possible,” Ellese says.
With competition and CAC on the rise, building long-term relationships through a subscription program is the key to success. For merchants who want to upgrade their subscription retention efforts, offer a flexible subscriber experience, treat your shoppers like royalty, and use data to hone your communication strategy.
For more insights, watch our on-demand webinar. Daniel, Ellese, and Eddie cover additional topics, including tips for merchants with a new subscription offering and what to consider when evaluating a subscription platform.