How to Leverage the Holidays to Boost Subscription LTV
The holidays are a time for festivities, visiting (and arguing) with family, and of course, shopping. As the busiest time of year for most ecommerce businesses, this is a great time to grow your customer base and reward existing customers with loyalty offers to keep them coming back year after year.
While one-time sales typically see a notable surge during the holidays due to people buying gifts for others, black friday & cyber monday deals, etc., subscriptions are a great way to keep the spirit of the season going all year long. Let’s explore some of the strategies subscription based businesses can use to grow their LTV and acquire new customers during the holiday season.
Understanding subscription LTV
Before we dive into the holiday-specific strategies, let’s first discuss: what is LTV?
LTV stands for lifetime value, and it’s the total revenue that a company can reasonably expect from a customer throughout their entire subscription period (including customers who may pause/cancel subscriptions and return later on). To calculate LTV, take your average subscription value, multiply it by the average months a subscriber remains subscriber, and this will be your LTV.
LTV = Average subscription value x # average months subscribers stay subscribed.
As an example, if your average subscription value is $20, and customers stay subscribed for 8 months on average, your LTV would be $160.
$20 x 8 = $160.
There are two main ways you can increase LTV:
- Extend the length of time a customer stays subscribed. For example, if the average monthly subscription costs $20, and they stay subscribed for 8 months on average ($160 LTV), by extending that to 12 months, you increase LTV by $80 (to a total of $240 LTV).
- Expand the value of the subscription and charge more per subscription. For example, if you have 100 customers of which all are on a basic plan paying $20/month for 8 months, and you can convert half of your customers to a more advanced plan for $30/month, then you’ll grow your total revenue by $500 (and your LTV by $5).
How to extend subscription length during the holidays
The holidays are a great time to encourage customers to extend their subscription length. There are many ways you can do this, but a good place to start is to take a look at your customer base that is already staying subscribed for a year or longer, and offer incentives to get them to commit to an annual agreement. Some ideas include:
- Offering a discount off the monthly cost (such as getting 12 months for the price of 10 months).
- Offering special gifts to those who commit to a year.
- Offering referral bonuses.
- Offer limited edition holiday items, packaging, or exclusive deals during the season. Tailor your subscription with a festive twist.
- Reward customer loyalty
- Make it as easy as possible to do business with you (easy to use and intuitive website, mobile app, easy checkout, multiple payment options, etc.)
- Offer outstanding customer support and self-serve options for customers who may have issues. Offer multiple avenues for getting in contact with your business, such as phone, email, chat, etc.
How to expand the revenue per subscription during the holidays
The holidays are a great time to provide additional value to your subscribers, in which they may be willing to join a different subscription tier for. Here are a few ideas to expand your revenue per customer during the holidays.
- Provide a personalized experience: Employ data to understand your subscribers preferences and tailor personalized experiences to them. Studies have shown that consumers have come to expect and will spend more money with businesses that personalize the experience to them, such as with customized packaging, messages, exclusive offers, etc. Make your subscribers feel valued and understood and they will spend more money with you!
- Provide access to subscriber only offers, like virtual or physical events, workshops, parties, etc.
- Provide limited time offers that are only available during the holidays.
- Provide limited availability offers to create a feeling of scarcity and increase urgency amongst subscribers.
- Provide unexpected tokens of appreciation, such as a hand-written thank you card in their subscription box or a small gift thanking them for their loyalty.
- Offer free samples or coupons to keep customers coming back.
How to grow subscription base during the holidays
The holidays are not only a great time to extend the average length of your subscribers and the amount they spend per subscription, but it’s also a great opportunity to grow your subscription base with new customers. Below are some ideas to grow your overall customer base.
- Offering gift subscriptions, where the customer can select a gift package for someone else which comes in 6 month or 12 month increments. The gift giver pays for the subscriptions and the recipient is given the option to pay to continue the subscription towards the end of the initial term.
- Offer gift cards that your subscribers can give to their friends and family as gifts.
- Leverage testimonials and stories of how your subscription brought joy to your existing subscribers.
- Get active on social media and post on networks relevant to your subscribers.
- Leverage advertising, such as paid search for people looking for products you offer in your subscriptions, or Meta and TikTok ads.
- Encourage UGC: Engage with influencers and creators, and offer them free swag or subscription boxes in exchange for doing an unboxing video or other video that they share with their audience.
- Review analytics. If you’ve been in business for multiple years, look back at previous holiday seasons and determine which channels led to the highest new subscription sales.
- Make the checkout experience as fast and seamless as possible. Offer multiple payment options like the standard credit cards, PayPal, Venmo, Apple Pay, Google Pay, etc.
- Offer guarantees, such as no hassle cancellations, no commitments, and money-back guarantee or a return policy if they’re not happy with their first box.
The holidays are a terrific time for ecommerce businesses to connect with their customers in meaningful ways, and subscription businesses are at an advantage because you have a longer-term relationship with your subscribers than most ecommerce businesses have with customers who may purchase only once or twice.
If you’re looking to start selling subscription boxes, or are looking to gear up for a busy holiday season, request a demo from Upscribe here to learn more about how we can help you turbocharge your subscription business going into this busy time of year.