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    Enter the New Wave of eCommerce — How To Maximize Subscriptions For Optimal Growth

    • The new wave of eCommerce is here, and it’s being led by subscription-based products and services. Subscriptions build recurring revenue, enable more operational efficiency and simplify customer retention and acquisition when done right.
    • A customer-centric funnel is one key to acquiring and retaining subscribers — plus, it’ll help differentiate you from household brands. When creating your subscription package, provide value and convenience by personalizing the cancellation flow and catering to your customer’s unique shopping patterns.
    • As you prepare your business for the holiday rush in Q4, don’t forget to implement a plan that helps create ongoing revenue. Your goal should always be to turn Q4 subscribers into customers that will follow you into Q1 and beyond.

    Several years ago, Four Sigmatic — a Finnish-American company specializing in mushroom-based drinks — wanted to build delight and excitement into its end-subscriber experience.

    That’s when the brand reached out to us.

    Since then, the company has reduced churn, increased its subscribers by 50% and significantly decreased support time to resolve tickets and engage customers.

    With the added free time and money, Four Sigmatic could focus on areas related to product and growth, scaling the company both efficiently and profitably.

    In a recent episode of the eCommerce Fastlane podcast, I explained that, in the short- and long-term, we’re focused on understanding how to help Shopify brands improve retention, growth and acquisition — in that specific order.

    Subscriptions are scaling machines, and it’s time for more merchants to leverage them and the right solutions to retain customers.

    Get hip to the new wave of eCommerce: Subscription-first brands

    During the first wave of eCommerce, prominent and scalable brands were laser-focused on customer acquisition.

    Using Facebook and Instagram to lead customer acquisition strategies, brands built successful businesses by scaling these channels and others with the help of affiliate email marketing.

    Today, however? Competition is much stiffer. Shopify’s seamless platform makes it possible for anyone, anywhere to build a business. The barrier to entry is relatively low.

    Now, merchants that are part of this new wave of eCommerce — or the second inning — face higher customer acquisition costs (CAC) since it’s a lot more difficult to acquire and retain customers.

    But the popularity of subscriptions changed the way brands can approach customer acquisition for the better.

    The few first-wave brands that initially experimented with subscription-based offerings did so to rethink their approach to retention and loyalty. And the gamble paid off.

    Before subscriptions became widespread, revenue for most direct-to-consumer (DTC) brands that sold products both online and in-store consisted of one-time purchases. Since the expansion of subscription products, 10% to 20% of DTC Shopify revenue was recurring — and over the last couple of yearsUpscribe’s data shows this number has risen to more than 50%.

    With subscriptions as a proven path to recurring revenue, new eCommerce merchants have the smarts to start with subscriptions as a core part of their businesses.

    And because recurring revenue makes it easier to forecast future earnings, one major benefit for business owners is it allows for more operational efficiency.

    The customer-centric journey — where loyalty and retention lie

    Revolving-door-money also means you can focus less on acquisition and more on retention, marketing and brand loyalty.

    A customer-centric brand is what differentiates online businesses that sell one or a few products from juggernauts like Amazon. As you design subscription-based offerings, consider the value and convenience you can provide customers.

    1. Realize shopping patterns aren’t binary 

    Many merchants think of consumer buying patterns as binary; either customers make transactional one-time purchases, or they’re loyal and engaged subscribers.

    In reality, it’s not that cut and dry.

    To better serve customers and their varying needs over the long term, view the frequency of buying habits as a continuum.

    Here’s how Upscribe’s solution helps merchants achieve this: Imagine you have a regular customer who purchases your product on a monthly recurring basis, but they sometimes cancel the shipment due to travel. Upscribe’s data intelligence solution notes this shift, assessing that this customer may need shipments every 45 days rather than 30.

    This flexibility enables merchants to be more proactive in learning what their customers want and when, plus the favorable options people need to manage their subscriptions.

    2. Personalize your cancellation flow

    To cancel your New York Times subscription, you have to call a customer service line. Netflix? It offers a downgraded membership plan before directing you to the deactivation section.

    On the other hand, eCommerce businesses that sell physical products often don’t have any retention strategies built into their cancellation flow. All customers have to do to walk away is click a button.

    While that’s a convenient option to present, you also miss out on simple opportunities to retain customers — because according to Upscribe data, the most common reasons for churn are having too much of a product or growing tired of the same flavor or variant; not dissatisfaction.

    Currently in the early stages, Upscribe’s platform will give merchants the ability to personalize their cancellation flows with two new options: delaying the shipment or swapping the product. (And that’s only the beginning!)

    🔑 Pro-tip: Once you acquire a subscriber, using data to customize the cancellation process even more — whether you offer complementary products or cross- and up-sells — is a key way to achieve loyalty and retention.

    The perks of Upscribe for Shopify merchants

    Offering users the ability to change shipping dates or update payment addresses or cards are critical.

    More often than not, people like heads of eCommerce at mid-market brands or founders of small and medium-sized businesses want to leverage this kind of solution in three ways: 

    1. Converting one-time purchasers into subscribers.
    2. Retaining subscribers. 
    3. Growing subscribers’ lifetime value (LTV). 

    Upscribe’s merchant- and subscriber-centric solutions help Shopify brands achieve these objectives and more — from managing subscriptions and processing recurring orders to building customer portals and post-purchase experiences.

    Whether you’re a Shopify Plus member or not, our goal and intention have always been to provide enterprise-grade solutions to any merchant in simple ways.

    However, Shopify Plus does come with perks. While Shopify’s application programming interfaces (API) function well across plans, Plus merchants have the ability to change components of their APIs.

    Additionally, you also get to modify Shopify Scripts to create personalized, better-integrated checkout experiences for your customers — ones that take place on the same domain.

    Business wellness check: Are you ready for Q4 (and Q1)?

    Naturally, CAC tends to skyrocket in Q4. The holiday season is a major opportunity for brands to take advantage of buy-ready customers, so competition is steep.

    As you increase acquisition spend to prepare for Black Friday or Cyber Monday, don’t forget to consider how it’ll affect your customer retention. Because if you land a bunch of new customers who only purchase from you once, did you really make a worthy investment?

    Upscribe data found that, across verticals, eCommerce merchants that built customer journeys highlighting the benefits of subscription offerings besides public discounts succeeded in turning Q4 customers into Q1-and-beyond customers.

    And that’s exactly what you want when it comes to Q4 customer acquisition: to bring new people in who will want to stick with your brand.

    To do that, create a customer-centric buyer’s journey that’s aware, intentional and goes beyond showcasing the occasional discount here and there — you get customers further down the funnel otherwise.

    Upscribe processes over $200M+ in subscription revenue. Ready to see how Upscribe can transform your subscription eCommerce business? Join the waitlist.

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    What you should do now

    1. Schedule a Demo and see how Upscribe can provide a superior subscription experience for your customers.
    2. Read more free material about subscription ecommerce topics in our blog.
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