The Complete Guide to eCommerce Subscriptions
- The subscription based business model: What is it and is it right for you?
- Introduction: The rise of eCommerce subscriptions
- The eCommerce subscription model: Understanding its 3 types
- 5 Benefits of subscription services
- 9 Crucial subscription eCommerce platform capabilities
- Your guide to the essential subscription integrations and apps
- How to start a subscription business in 6 steps
- 5 Subscription model best practices
- Take the effort out of subscriptions with Ordergroove
5 Subscription model best practices
In late 2019, Yankee Candle recognized their customer base was just as comfortable shopping online as they were in their brick-and-mortar stores. In response, the Massachusetts-based brand adopted a subscription business model that not only met consumer demand, but also set them apart from their competition.
What’s more, Yankee Candle adopted the best practice of giving their subscribers complete control over their orders — from which items to include to when they ship and where. They also went all-in on retention rewards by giving subscribers twice the loyalty points on their purchases.
This marketing strategy increased customer retention by 90% and subscription revenue growth by a factor of 10 in eight months.
If you’re not investing in subscription model best practices, you risk losing existing customers to merchants who offer better user experiences.
1. Allow subscribers to skip orders and swap products
Subscriber control is table-stakes subscription functionality. When you put customers in charge of their subscription management, you build trust and reduce churn.
Our research shows that subscribers last 135% longer when they can skip an order.
According to subscription expert Thomas McCutchen, who runs the branding agency Scoutside, “We know that [giving subscribers more control] works. The more that a customer is inside the (subscriber) portal, the more they feel in control and the longer they’ll stick around. They’ll start taking actions other than cancel.”
Part of giving subscribers control is reminding them how much control they actually have. Thomas recommends using proactive messaging, such as SMS, to alert subscribers that they have an upcoming shipment to customize.
2. Remove friction from adding one-off products to subscription orders
Because successful upselling and cross-selling increase average order values, make it frictionless for subscribers to add recommended products to their subscription shipments.
In a survey of their customers, Barilliance found that seamless interactions with personalized product recommendations resulted in a 369% lift in average order value.
One way to remove friction is to extend subscription incentives, such as special discounts, to one-off items. A few days before a shipment goes out, remind subscribers via email or SMS of this benefit, and recommend products to add.
Pet pharmacy VetRxDirect allows customers to add subscription replenishment orders and one-off items to the same shopping cart. While free shipping is not automatic for subscription orders, they encourage subscribers to buy more by displaying a free shipping meter just above their order subtotal.
After the first year of this seamless checkout experience, VetRxDirect found that 34% of their subscribers purchased additional one-off items.
3. Make it easy and desirable to subscribe
Take the guesswork out of signing up. Elevate your subscription experience in your online messaging and tout its value in as many customer touchpoints as possible.
When we hear from sellers that want their subscription programs to grow, we often find that they only include subscription information on their product pages.
KIND Snacks is a great example of how to keep subscriptions top of mind and make signing up a no-brainer for customers. They go beyond simply mentioning subscriptions on their product pages. To foster customer interest, they’ve highlighted their curated subscription box on their homepage and signing up or learning more is only a click away.
“Subscriptions” is also a main menu item, and they include a banner touting the incentive of free shipping on all subscriptions. They even have a photo of the unboxing experience on their homepage.
These efforts helped KIND Snacks grow their subscriber base by 50% since launching their subscription experience.
A compelling name can add a layer of desirability to all types of subscriptions. The name should convey either the key value proposition of your subscription or a degree of exclusivity. Take Yankee Candle.
Their subscription box experience, “Fragrance Flight,” takes a cue from the popularity of wine and beer tasting flights. They’re upfront about price, and they hone its messaging to customers who desire the surprise of trying new products.
4. Build value into your messaging and subscription pricing
Subscribers must always feel that buying more on a regular basis results in greater value. According to McKinsey, “good value for price” is the top reason for becoming a subscriber. This value can take the form of lower price points or generous discounts.
Take Chemical Guys, an eCommerce seller of car care supplies. Like KIND Snacks, they encourage subscribers to customize their own boxes. And they give subscribers a deeper discount on the 12-pack than the 6-pack.
The average order value rises if they pick the 12-pack — which is good for your bottom line — but the subscriber doesn’t feel penalized for wanting or needing more.
5. Validate your subscription through influencers
Influencers are a great way to branch out from traditional advertising, which is becoming less effective in reaching potential subscribers.
The 2022 Influencer Marketing Benchmark Report estimated a 9% increase in usage of ad-blocking tools over 2021, with the average global desktop ad-blocking rate reaching 43%.
For influencer marketing to work, choose the social media platform preferred by your subscribers, whether Instagram, TikTok, or YouTube. Reach out to prospective influencers in your niche and vet the engagement of their followers, their required compensation, and the tone of their content.
Natural skincare brand Tata Harper partnered with Geri Hirsch to expand brand awareness and offer incentives to sign up. Hirsch fits Tata Harper’s demographic and frequently posts beauty and wellness content. She has 107,000 Instagram followers with a 0.99% engagement rate, not too far from the average engagement rate of 1.62% for an account of her size.
Tata Harper can track campaign return on investment (ROI) because they’ve personalized the promo code — TATAxGERI — to the influencer.
Provide excellent customer service to subscribers
Subscribers are your VIPs on account of their loyalty, and they expect to be treated that way, especially when they have questions or problems. The personalized experience you create for them online and in-store must extend to customer support.
Zendesk’s 2022 Customer Experience Trends report found that 90% of customers will spend more with companies that personalize the customer service they offer them. This personalization includes letting subscribers reach out via their desired support channels.
Tata Harper offers voice, email, and chat support.
Even more important is making sure support agents have quick access to customer data, including order history, communication history, and customer lifetime value. Customer relationship management (CRM) platforms, social listening tools, and other support tools can help you automate tracking and understand this data.
This high-level view can help agents tailor their responses to the customers’ needs and even recommend items they might want to add to their next shipments.
Enhance customer relationships with subscription model best practices
When your subscription model optimizes convenience and customer control, it turns loyal subscribers into some of your greatest advocates. You can depend on them to tell their friends about the pain points alleviated by your subscription. This is a surefire way to watch your business grow.
To learn more about how Ordergroove can launch your subscription business onto a path of sustainable growth, click here for a list of our best-in-class capabilities.