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Subscription Marketing Guide, Tools & Best Practices

Subscription businesses grew 300% from 2012 to 2018 according to a Mckinsey report. There’s definitely an opportunity for you to add value to your customers with ecommerce subscriptions and grow your business in the process.

Marketing product subscriptions is not as complicated as it sounds. Having a dedicated out-of-the-box toolkit like Upscribe can help you manage and grow a subscription business with ease.

It’s what businesses like Ready,Set, Food and Beekeeper’s Naturals used to optimize their subscription process to achieve significant growth.

Let’s look at how subscription marketing can help you grow your business.

A brief look at ecommerce subscriptions and why they work

So what is a subscription? It’s a fixed recurring fee paid by a customer in exchange for receiving a product or service you offer at regular intervals. The customer chooses the frequency of payments between weekly, monthly or yearly intervals.

For example, a customer pays you a monthly subscription of $9.99 and in exchange receives health supplements from you every month. If you have 10 subscribers, you can accurately forecast $99.99 as your monthly recurring revenue, instead of having to find 10 new customers each month after once-off purchases.

Why it works

For your customer

Subscriptions have valuable benefits to customers. This is why 81% of consumers in the US have at least 1 active subscription. Benefits include:

  • Convenience: It’s convenient for the customer because they receive a product they need without having to worry about making the same purchase over and over again- it’s on autopay. 
  • Personalization: Customers have the ability to edit their orders by adding or removing products. They also receive product recommendations based on their preferences.
  • Added value: Having a subscription often works out cheaper than buying products once-off or with repeated purchases. So customers enjoy saving in the long run.

For your business

  • Lowers customer acquisition costs: With digital acquisition costs at an all-time high of 222%, having subscribers with repeat sales makes better business sense. You don’t have to worry about chasing new customers for one-time purchases. With low acquisition costs, you can focus on investing in nurturing relationships with existing customers for long-term benefit instead.
  • Recurring revenue: The major benefit of a subscription business is predictable, recurring revenue from existing subscribers. Think just how easy planning will be.
  • Inventory management: Not only does it make it easier to plan your inventory, but it also helps you get supplier discounts. Cash is king. Having a year’s subscriptions upfront in cash can give you bargaining power with suppliers.

Now that you can see the advantage of having a subscription business, here’s how you can create it.

How to create a subscription service

Upscribe has a comprehensive guide that you can follow to create your own subscription business.  You don’t want to create a subscription as an afterthought to your existing business. You need to have a proper strategy for how you’ll appeal to customers and what differentiates you from your competitors.

  1. Decide what you want to sell: If you’re just starting out you want to pick a subscription niche. If you have an existing business, ask yourself if your products make sense as a subscription. For example, is it something your customers purchase regularly or once off?
  2. Choose the right subscription model: Which subscription model will work best for you? Choose one that aligns with your business goals.
  3. Decide on pricing: You want to hit the pricing sweet spot. Customers should feel like they hit a bargain, but you should also make a profit. Whichever pricing structure you choose, make it flexible so that customers can change to one that suits their needs. 
  4. Build your storefront: You can use Shopify to build your storefront and use subscription management software like Upscribe, which provides integrated Shopify checkout for a unified brand experience.

Next, you’ll want to market your subscription business to the right customers.

Using Subscription marketing to grow your business

What is subscription marketing

Subscription marketing involves creating and implementing a specialized marketing strategy to reduce churn and increase new signups to your subscription business.

This includes having a comprehensive marketing plan and deciding what tools you’ll use to grow your subscription business.

Subscription marketing is different from transactional marketing because you’re asking a customer to sign up for an ongoing relationship and not a once-off purchase. They need to trust your business and be convinced that you’ll consistently provide them with value or they’ll leave. 

Foundations for a great subscription marketing strategy

Know your customers and why they buy

Have you targeted the right customers? The ones who’ll be willing to pay for your subscription on an ongoing basis? Take the guesswork out of the equation and actually talk to customers. Analytics can paint a picture of your customer’s behavior. This provides powerful insights which allow you to personalize their experiences. However, you need to dig deeper to find the why behind what they buy or don’t buy. 

This includes:

  • Surveys, 
  • Interviews 
  • Polls 

This way you’ll be sure who your customers are, what’s important to them and how to resonate best with them. 

Clearly communicate value

62% of customers said good value for the price was one of the biggest motivators for signing up for a subscription. But how will you define value? It’s usually a combination of the right offerings in relation to price. Graze offers better snacking with half the price off on the first purchase. Blue Apron on the other hand emphasizes fresh delicious meals at home with free shipping and $110 off the first purchase.

Prioritize customer experience

You have to exceed expectations to succeed in today’s digital landscape. One way of doing this is by creating a seamless customer experience.  You need to keep an eye on the entire customer journey to ensure you give a consistently positive experience. 

The way your customers perceive your brand will contribute to your brand reputation and increase brand loyalty. Customers buy more from brands they’re loyal to. In fact, 73% of customers cited experience as an important factor in their purchasing decisions. So getting it right matters.

Upscribe empowers you to create a delightful customer experience with its out-of-the-box tools.

We combine subscription management with the ease of self-service. 

  • You can create a beautiful customer portal with just a few clicks. 
  • The portal helps reduce subscriber friction by allowing them to easily manage their subscriptions. 
  • They can edit their next order, swap products or even gift friends. 
  • Meet them where they are by allowing them to do all this through email or SMS.

Use data to drive marketing and sales decisions

Leverage key metrics to assess the health of your subscription business and analyze the effectiveness of your subscription marketing strategies. You want to see what works and what’s not working. 

Customers are relying on you to give them personalized experiences. Data will help identify the gaps where your brand is failing to meet expectations so you can improve.

Data-driven insights  can also inform product recommendations and new experiences to delight subscribers.

Subscription marketing ideas to try

There are various subscription marketing strategies that you can use to start promoting your subscription business. These will help create awareness of your brand and encourage signups. But the focus of subscription marketing is not just to signup. That’s only the beginning.

For these to work, you have to see retention rates increasing and churn reducing. Here’s how you can do that:

Encourage advance payments

Annual subscriptions contribute to retention efforts. You get the security of knowing that a customer has made a commitment to stay with your brand.  Providing a discount for advance payment or a free month can encourage subscribers to pay upfront for an entire year. Display plan comparisons so that they see the best value and obvious benefits like how Fabfitfun does with their annual plan.

Create exclusivity

The Coca-Cola insiders club started a subscription service with a limited number of spaces for 3000 members, which were filled out in the first 3 hours. Members could look forward to exclusive access to new drinks, swag and surprises for $10 a month. They then had a waitlist where new members who wanted to be part of the club could wait for slots to open. Fabfitfun gives members-only discounts on certain products on their website. Make customers feel like they’re getting benefits that nobody else can.

Deflect churn

How will you stop subscribers that want to cancel their subscriptions? Why not offer them different options and a chance to rethink their decision? We give your subscribers the ability to skip a shipment, gift a subscription, add discounts or swap products if they try to cancel. Schedule a demo to see how it works.

Ask for referrals

Word of mouth is still the most trusted form of marketing. If you have happy customers, ask them to advocate for your brand and refer others to your brand. You can encourage referrals with reward points or free gifts/samples and even discounts for both parties.

Reward loyalty

Thank your subscribers for continuing to choose you. If you’re going to reward them, give them rewards that matter. Petsmart has an assortment of “treats” for its customers.

In the spirit of convenience, 53% of shoppers would like to have their loyalty or rewards programs activated automatically at checkout.

As subscription businesses continue to grow, competition will become tight. Having a customer-first approach and providing consistent value will keep you ahead. For more helpful tips on subscription marketing and growing your business, signup for the Upscribe newsletter.