If you aren’t already thinking about starting a subscription service for your brand, you really should be. Even pre-pandemic, subscription businesses were exploding with growth.
But the COVID-19 pandemic has really changed (and continues to change) how consumers shop. Brands and retailers across the world have experienced a surge in online orders. In a recent Bazaarvoice global survey, almost a third (30%) of global respondents said they shop online once or more a week, even now that lockdowns are lifting.
Another side effect of the pandemic has been the uptake in subscription services.
About 19% of all global respondents in our survey confirmed that they’d signed up for a subscription service during the pandemic, and 83% of those respondents are willing to continue to pay for their subscriptions in the future.
For consumers, subscriptions offer convenience, high-quality products, reliability, and great value, while brands and retailers benefit from locking in repeat revenue.
Thinking of starting a subscription service for your products? Ask yourself these seven questions to determine if the subscription model is a good fit for your brand.
1. Would my product lend itself to a subscription?
Popular product categories for subscription boxes today include food, beverages, electronics, health and fitness, fashion, and beauty. These are all products or experiences that people consume regularly and frequently need to repurchase. If your business falls into one of these categories or if you notice that certain products you offer get repurchased over and over again, you’re probably a good candidate for a subscription model.
2. Would shoppers want to subscribe?
Rather than a one-off purchase and short-term relationship, brands need to ensure consumers continue to find value in the product for the long term. Customer purchase data and user-generated content (UGC) can give brands an advantage here. Insights from both can help tailor and personalize your services from delivery to discounts.
Which products do customers frequently repurchase? How often do they repurchase them? The answers to these questions could help you set the right cadences for your subscription models.
Do customer reviews mention that people always want certain products on-hand or want mini-sizes? UGC gives you all of the insights you need straight from the customers’ mouths. By utilizing it properly, you’ll set the right foundation for your new subscription service.
3. What would costs look like for my subscription business?
How much your subscription service costs the business depends on several factors. Once you’ve determined what you want your subscription to be, figure out how much it will cost to send the customer the most value possible. Don’t forget to include shipping costs, marketing costs, labor, and any other costs in this. Then you can move on to the next question to determine pricing.
4. How should I price my subscription?
Like the last answer, this depends. You want to see high margins but don’t want to be unaffordable for your customers. To get an idea of what’s “normal” in your industry, check out the competition. What do they charge? You may not be able to match their prices, but it’s important to know what your customers are comparing you against. Another way to figure out what customers would pay for a particular service would be to ask them. Send out surveys to loyal customers and get their opinion on how much they think your potential subscription is worth.
Many subscription services use tiered pricing depending on what the customer signs up for. If the customer chooses an option with more value, they’ll pay more money per month than other subscribers.
5. How do I drum up interest for my subscription offering?
It’s much cheaper to retain existing customers than acquire new ones. If you’re a brand or retailer who already has a solid customer base, start there for your subscription business. Beta test your new model to your most loyal shoppers and re-purchasers. Gather their feedback in the form of UGC for your product detail pages, subscription pages, social content, and other marketing collateral.
Also, consider influencer marketing to drum up excitement for the launch. Social media plays a key role in helping people discover new products and brands. After seeing a product or service on Instagram, 92% of users say they have taken some kind of action, such as buying the product online, visiting the brand’s website, or following the brand on social media, according to research commissioned by Facebook.
Social media influencers are also helpful in spreading the word about products to their network of followers. According to a Morning Consult report, influencers especially resonate with younger demographics, with more than half of Gen Z and millennials saying they trust influencers’ advice about brands and products.
6. How can I retain subscribers?
Listening to customer feedback is key to retaining customers. Send out surveys with each subscription box and ask the customer to review the products you sent. You’ll see three significant benefits from this:
- You’ll learn which vendors and products your customers like so you can keep improving future packages.
- You’ll be able to display individual product reviews on your product display pages for new customers looking to purchase your products. According to consumer research, the majority (75%) of shoppers use reviews to discover and evaluate products.
- You’ll build long-lasting, valuable relationships with your subscription base. Brands and retailers we’ve talked to said that reviews have an impact far beyond the product page. According to those we surveyed for our 2019 Shopper Experience Index, over half (52%) said they help increase brand loyalty, 53% cited a positive impact on in-store sales, and 63% said they improve SEO.
Another way to retain customers is to ensure you’re surprising and delighting them with every package you send. Don’t let your subscriptions go stale. Continue to find new ways to impress people, like providing new brands and products you know they’ll love.
7. How can I attract new subscribers?
Our Shopper Experience Index found that brands and retailers report that visual UGC (like photos and videos) creates a more engaging shopping experience and increases discoverability.
To find new subscribers, give current subscribers multiple ways to rave about your subscription box online., like by running a sampling campaign. Encourage them to use specific hashtags when posting about your products and then repurpose that content for your marketing collateral and product pages.
The opportunity is ripe for brands and retailers to truly understand shopping habits, adapt to consumers’ new ways of buying, and instill trust to create long-lasting relationships. As shopping behaviors change, you might have to alter how you get your products in shoppers’ hands, and a subscription box can be a great way to do that.
If you aren’t already thinking about starting a subscription service for your brand, you certainly should be.