Relationship Commerce

Questions to consider when starting a subscription program

Subscriptions are becoming an increasingly popular recurring revenue stream for eCommerce brands, with Forbes noting that subscription-driven businesses across a range of industries expanded at an annualized rate of 12% in the second quarter of 2020.

There’s no better time than now for brands to make the leap to a subscription model, but we often hear from eCommerce professionals that getting started can feel like an overwhelming task.

They have questions about customer-perceived value, subscriber lifetime value, and whether it’s more efficient to build a homegrown platform or partner with a subscriber platform like Ordergroove.

So, if you feel like pulling your hair out, take a deep breath and relax. You’re not alone. In fact, that’s why we’ve drafted answers to the most common questions brands have when they’re considering starting a subscription program.

What Benefits Drive Subscription Enrollment and Retention?

Subscribers are some of your most loyal customers, but if you don’t treat them that way, they can easily churn out of your program. That’s why it’s critical you offer a subscription program that provides customer value.

A discount on recurring orders is a great way to drive enrollment. It’s perfect for brands who rarely offer promotions. On the other hand, highly promotional brands should consider another tactic. Think of it this way: Why would a customer stay in a subscription program when they can stock up on products during a sale?

Sticky subscription benefits you should also consider include:

  • Discounted or free shipping
  • Deeper discounts when subscribing to more products
  • Additional loyalty points on subscription orders
  • Discounts on items added to recurring orders

There are numerous incentives you can offer subscribers, but the most important thing to determine is whether the benefits are right for your brand. Top subscription platform providers have extensive experience and can guide you in the decision-making process.

How do Brands Optimize Their Subscriber Experience to Increase LTV?

The simple answer to this question is: Give subscribers control over their subscriptions and communicate with them.

Unlike one-and-done transactions, subscriptions are an ongoing experience for shoppers. To make them happy, it’s imperative your subscription offering includes a subscription management interface.

The best subscription management software enables subscribers to easily update their subscription preferences, including changing delivery frequency and their subscription SKU. They also empower subscribers to pause, skip, or change the date of upcoming orders.

Subscription communications are also key to increasing customer lifetime value.

Brands with exceptional subscription programs incorporate their subscription communications into email channels. They alert subscribers about their upcoming order and inform them about actions they need to take.

Without communication, subscribers might not know that their favorite subscription is out of stock or their payment information is outdated. This can lead to delays and negative experiences.

What Resources Go into Implementing and Maintaining a Subscription Program?

While the consumer-facing subscription experience is important, it’s just as important to make sure your business operations are streamlined.

Subscription programs can require significant resources. If you plan to build your own subscription program, you’ll need to ensure that you not only have developers available for the initial implementation but also on standby to support the program throughout its lifecycle.

When deciding between a homegrown subscription program and a subscription platform, consider these questions carefully:

  • How will you manage subscription eligibility and inventory?
  • What happens to a subscription if a product is out of stock or discontinued?
  • How will your customer service team manage subscription-related inquiries?
  • Do you have the right analytics tools to gauge your subscription program’s performance?

As you can see, there are many factors to consider when starting a subscription program. They can be complex to develop and maintain. Take the time to align on the goals and expectations before moving forward.

Homegrown Subscriptions vs Subscription Platform

If you’re looking for subscriptions to be a feature of your website with little expectation for it becoming a profitable recurring revenue stream, then a simple discount on recurring orders and a sub-par user experience may suffice.

However, if you want to use a subscription program to grow your recurring revenue and overall eCommerce business, it’ll require more time and resources to launch and continuously optimize your subscription program.

Many brands find the cost of developing and maintaining a homegrown subscription program to be higher than partnering with a company like Ordergroove.

Read more

More revenue. Better customer relationships.

Get started with Ordergroove today.