How Ordergroove helped The Laundress improve customer retention and increase CLV
David Cross |
As subscription programs continue to increase in popularity, direct-to-consumer (DTC) merchants are leveraging this shift — and Ordergroove’s platform — to combat ingrained customer behavior.
The Laundress, an eCommerce brand offering plant-based, eco-conscious laundry and home cleaning products, is one such DTC brand that has successfully used the convenience of subscriptions to lure customers away from detergent shopping at the grocery store.
Before finding Ordergroove, The Laundress built and managed a limited subscription program.
The company was only able to offer subscriptions for about 10 of their more than 150 products and the only way customers could manage their subscriptions was over the phone.
“It really wasn’t ideal,” says Jill Ginsberg, The Laundress’ director of eCommerce “We knew it wasn’t as successful as it could be. That’s when we started to look at solutions to help us automate it and take the heavy lifting off our small team.”
At a virtual fireside chat hosted by FounderMade, Jill spoke to Ordergroove’s Chief Customer Officer Brandon Ramos about her experience using our subscription platform. She explains how it improved customer service around subscriptions, boosted customer retention, and helped The Laundress reward their most loyal subscribers.
Driving Customer Loyalty Through Convenience
Even before discovering Ordergroove, Jill understood that a subscription program could help The Laundress increase customer loyalty and retention.
If you go to do your laundry and find that you’re low on detergent, your typical response is not to order more online — you add it to that week’s grocery list.
People don’t want to wait even a few days for essentials like detergent to work their way through the mail, especially when you can find them in any grocery or drug store.
For The Laundress, which offers unique products like Wool & Cashmere Shampoo through their website, competition with the local grocery store is a challenge.
By enabling customers to set-it-and-forget-it, a subscription program helps DTC brands compete on convenience stakes, Jill says.
Customers who subscribe to an essential item have the security of knowing that they won’t run out because they can manage their subscriptions so they always have a steady supply. They don’t even have to remember to buy detergent, as their next delivery is already scheduled.
On top of these benefits to the customer, many subscription programs also offer discounts for signing up for regular shipments.
For example, customers of The Laundress get 5% off for subscribing to one product, 10% off for subscribing to two, and 15% off for three or more. Subscribers also receive free shipping — one of the most desired perks in eCommerce.
Big Results Just One Year In
Since The Laundress partnered with Ordergroove in 2020, Jill says they’ve seen dramatic improvements.
Improved customer retention
With customer acquisition cost (CAC) on the rise, The Laundress knew that they needed to double down on their customer retention program efforts. Jill says this is one of the main reasons why they launched a subscription program with Ordergroove.
Since implementing their program, The Laundress has seen an increase in customer lifetime value (CLV).
“We know there’s a direct correlation, and we want to keep continuing that,” Jill says.
Increased customer loyalty
One strategy for making sure your customers keep coming back to your company is to reward the ones who do it the most.
Frequent shoppers are more likely to subscribe since they’re already planning to buy from you again. This means subscription programs allow you to reward all of your most loyal customers.
The Laundress encourages frequent customers by integrating their subscription and loyalty programs.
“We have a points-based loyalty program with different tiers. Make a purchase, get X amount of points, etc,” Jill says. “We’ve integrated Ordergroove into that, so our customers get bonus points for their subscription items.”
Subscriptions at scale
Trying to run The Laundress’ original subscription program with a small team and no automation was a nightmare for customers and Jill. Ordergroove automates many of the processes involved in running a subscription program, enabling merchants to rapidly scale.
For example, communication between customers and The Laundress is more streamlined with Ordergroove.
When The Laundress ran their own subscription program customers had to pick up the phone and call the customer service team to cancel or change their subscription.
“It wasn’t a great user experience,” Jill says. “So we looked at Ordergroove as an opportunity to make it easier for the customer, and make it easier for us.”
With Ordergroove, customers can easily change the frequency of their deliveries, skip an upcoming order, and even hit pause on their subscription.
That might sound counterintuitive, Jill says, but if customers feel like they’re oversaturated with a product, they might cancel their subscription out of frustration.
Another useful benefit is that customers automatically get advance warnings if a product won’t be available for their next delivery. They can either replace the product with a different one or delay the order.
“Before, customers weren’t told if something was out of stock or their subscription wasn’t coming,” Jill says. “Your customers always want to be communicated with in advance if there’s a problem and we couldn’t get ahead of that. This has been a really great solution.”
“Your customers always want to be communicated with in advance if there’s a problem and we couldn’t get ahead of that. This has been a really great solution.”
Jill Ginsberg, Director of eCommerce, The Laundress
The Biggest Subscription Challenges and Solutions
Before kicking off the subscription program with Ordergroove, Jill had a couple of challenges she was concerned about. Here’s what happened and how they worked out.
Integrating with a custom eCommerce platform
Unlike many eCommerce retailers, The Laundress uses a custom eCommerce platform.
Jill was worried that integrating with Ordergroove would be a hassle.
“But the Ordergroove technical team took on all the heavy lifting there, so it wasn’t as much of a concern for us,” she says.
Discount-hunters are in the minority
Initially, Jill worried that customers would sign up for a subscription just to get the discount, and then immediately cancel. She says this is still a concern for The Laundress: but so far, they’ve seen a low overall churn rate from subscribers.
“There’s always going to be that 10% of people who take advantage, no matter what you do,” she says. “You have to look towards your bigger business goals, and for us, this subscription program did that.”
Optimization Is the Next Stage
The Laundress took 2020 to get their subscription program up and running. Jill says that the COVID-19 pandemic made it an especially strong year to start a program that dispatched cleaning products directly to people’s homes.
Going into 2021, she was concerned that as people felt more comfortable going into stores again, they wouldn’t be as interested in subscriptions. But so far, the behavior change seems to have stuck.
“We’re still seeing continual growth, which gets me really excited that customer behaviors have changed, and they are used to shopping for laundry detergent online, whereas before, it was something they picked up in their local grocery store,” she says.
The Laundress’ approach to subscriptions is changing too, as Jill hopes to take the solid foundation she’s built over the last year and optimize.
For example, having peppered social media, email, and every product detail page (PDP) with the option to subscribe, Jill says they’re looking for more places they can advertise the service — without becoming annoying.
She’s also looking for ways to use Ordergroove’s tools and capabilities to increase average order value (AOV.) “That’s an area we haven’t had an opportunity to optimize yet, and we’re looking at it this year,” Jill says.
For example, the week before a customer receives their delivery, The Laundress can send them an email reminding them that they can get a discount on other items they can add to that order.
One thing that’s ongoing in Jill’s strategy is consistently testing different approaches to get data that can fuel business decisions.
For example, she’s tried testing different subscription-based offers, and automatically checking the subscription offer on each product page, versus the one-time purchase option.
“I would prioritize testing … and keep testing, because you can test something once and find it works, and then the next year, it doesn’t,” she says.