In the first part of this article series, we covered why subscription-based business models are worth your time. If you are an eCommerce enthusiast or a business owner you might want to ensure and leverage all the ways that grant you access to ongoing revenue.
It doesn’t matter if you don’t yet have a subscription model for your business, you can read to learn how to design yours. However, focusing on making subscription plans doesn’t mean stopping selling to new customers. Think of it as a funnel. By having more loyal and returning customers you are going to attract more visitors to your store. The vice versa is also true. Enter the reputation business.
How can eCommerce stores adopt subscription models?
According to Deloitte, 75% of online stores are going to provide a subscription by 2023. This doesn’t mean that everything is going to be sold through memberships. Although some new startups focus solely on subscription it is an option to include it in your current model.
Subscriptions are also a great way of making loyalty programs. Here are 3 types of subscriptions you can deploy in your strategy:
Curation – provide surprise and delight more than anything else
Replenishment – saving time and effort by focusing on “never running out”
Access subscriptions – are high ticket services like VIP kind of exclusiveness
Understand your customers by analysing their needs. What do they need regularly? Can you provide them with a curated form of your line of business? What VIP bundle do your customers crave? Dollar Shave Club used Gillet’s ad to jumpstart their brand. Almost a 2-minute long video turned off man against Gillet because of the emasculating vibes it sent as if trying to stereotype them. The impact is gigantic. Dollar Shave Club grew $200 million in sales within 5 years and owns almost 7% of the US shaving market. On the day of Gillet’s ad they responded with a simple tweet “Welcome to the Club.”. They’re gaining subscribers at a rate of 10% a year and as we already mentioned, they have almost 4 million subscribers.
Dollar Shave Club is the first brand that has ever offered a subscription for razor blades. Important questions for design:
What motivates customers to subscribe to your plan?
What triggers customers to subscribe today?
What keeps customers lock-in?
Subscriptions work best after validating the right package for your target customer. In the beginning, you can outline a few ideas to keep in mind what you are willing to test. It might take time until you capitalize on a plan.
“With a subscription business model, the company receives periodic payment to deliver (give access to) a product or service”
Designing plans for your subscriptions is at the core of success. It is a process that involves testing different approaches. Consider options on how to gamify and build hierarchy to create seducing customer plans. It requires empathy and generosity to attract the right people in your funnel.
The right vision is really to aim for lifetime subscriptions. However, it might not work quite as planned as this a noteworthy aspiration. Make it painful for customers to cancel the subscription.
Spotify is an illustrative example. If you cancel your plan you have 14 days until your playlists disappear. This could be something of value to you as a customer, especially when you spent years collecting songs and arranging them by genre, artists, mood, and so on. Spotify leverages your usage and uses it against you if you decide to go away. It lets you assess your life without the service really quick. Another example is Audible. Try closing the free trial and then you will encounter a series of landing pages offering you more free credits – those you can use for more audiobooks – as well as different types of subscription plans.
There is a distinction between having the freedom to choose from quitting a service and being trapped, however valuable it is. To illustrate this point imagine Apple notes. They aren’t transferable to any other digital notebook organizer. Though the value proposition of Apple is “a closed architecture” which becomes an obstacle if you decide you are no longer a fan of Apple. On the flip side, Google Drive’s files are easily transferable to Dropbox and iCloud which provide freedom at any moment.
Long Term Perspective
Culture is at the foundation of any business. Providing exceptional services long term is not enough. It has to make sense for the customer and help him identify with himself. Is he talking about your business? When is he talking about it? What does he say?
These are the signs of a successful market penetration and culture development. No hype, but desire. Tell the customer’s story through your business. Invite them backstage to feel close to your brand. Stay accessible to spark interesting conversations. Listen and be of value by adapting to the demand over time to overdeliver.
Try to avoid:
Fixed service every month
Limited plans for one target group
Distant and slow customer service
Best practices include:
Increasing value: content quality, quantity, and variety
Flexible terms: monthly, quarterly, annually
Convenience and accessibility: delivery and utility options
Tools for Subscription
Here are some suggestions you can consider for a WordPress website:
If you are a creator or service type of business Patreon is your choice.
Besides, there are options for Magento as well.
Add subscription options to your varied product catalogue
Collect payments automatically
Generate advanced product subscription report
You can check the list of reliable subscription extensions here.
No matter which CMS and tools you are about to use to design your subscription-based model, you still need to plant the seeds first.
Analyze your customers and decide what service and value you desire to provide. It is worth testing your assumptions on a smaller scale before going all in. Reach us if you need help with that. We offer an initial consultation to personalize our expertise to your business and industry.
As a rule of thumb, utilizing the membership strategy should entail great customer support. Also, strive to make it accessible and easy to subscribe while harder to opt-out. Always be mindful that earning a positive review and feedback is more valuable than losing a customer.