During the pandemic, 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 retailers to make the leap to a subscription model, but where do you even begin? How do you create a subscription program with enough customer-perceived value to increase enrollment, retention and drive maximum subscriber LTV? Can you build a platform on your own, or should you look to a partner like Ordergroove? We’ve outlined the questions you should consider when starting a subscription program so you can determine the best path forward.

  • How will you offer benefits that drive subscription enrollment & 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 subscription program. A discount on all recurring orders is a great benefit to drive subscription enrollment, but if you’re highly promotional, there still won’t be enough value for customers to stay in the subscription program when they can just stock up on their favorite products during a sale. Additional subscription benefits like lower free shipping thresholds, deeper discounts when subscribing to more products, additional loyalty points on subscription orders, or the ability to receive a discount on other items added to recurring orders all make the program as a whole valuable to the consumer and are stickier than a single discount.
  • How will you optimize the subscriber experience to increase LTV? Checking out with a subscription isn’t the end of the consumer journey. A subscription management interface is imperative, allowing customers to easily update their subscription preferences, including changing frequency, changing their subscription SKU, pause, skip, or change date of upcoming orders, and updating billing & shipping information. Additionally, new subscription communications need to be incorporated into your email channels such as alerting subscribers about their next upcoming order, or actions they need to take to update their payment information if a transaction fails. If these communications are missed, there could be legal ramifications for a merchant, on top of a bad experience for subscribers.
  • How will you find the time and resources to implement & maintain your program? While the consumer facing subscription experience is important, it’s just as important to make sure your business operations are streamlined. How will you manage subscription eligibility and inventory for recurring orders? What happens to a subscription if a product is out of stock or gets discontinued? How will your customer service team manage subscription related inquiries? Do you have the analytics tools needed to thoroughly understand your subscription program’s performance? Retailers have hired entire teams dedicated to managing and growing successful subscription programs. And 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 help support the program throughout its lifecycle.

As you can see, there are many factors to consider when starting a subscription program. Subscription programs can be quite complex to develop and maintain and it’s worth taking the time to align on the goals and expectations of your program before determining the best path forward for executing on it. If you’re looking for subscriptions to be a simple 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’re looking to use a subscription program as a means to grow your recurring revenue and overall e-commerce business, then it’ll likely require more time and resources to launch and continuously optimize your subscription program. Many brands often find the total cost of ownership required in order to make a program successful through internal resources is exponentially higher than partnering with a company like Ordergroove where these features and capabilities come out of the box.

Interested in seeing if Ordergroove is the right partner to power your subscription program? Contact us here and we can talk through your recurring revenue goals and the appropriate approach for you.