3 Ways Emerging D-to-C Brands Can Create Subscription Experiences That Build Loyalty
Launching a direct-to-consumer (D-to-C) brand has never been easier, but growing it into a successful business is increasingly difficult. Customer acquisition has become all the more expensive and challenging, with costs increasing by 60 percent in recent years. To compete against big brand names and private label alternatives, emerging D-to-C brands must foster a new type of customer relationship — one that creates authentic connections and is built on convenience and personalization.
Brands of all sizes are discovering that subscriptions protect their customer base and extend customer lifetime value. In fact, companies with recurring revenue models are valued eight times greater than companies with a transaction-based business model. However, emerging D-to-C brands are often unsure of what capabilities are required to manage a successful subscription experience or the resources required to build one from scratch.
When launching subscriptions, brands should focus on the key areas of enrollment, retention and average order value to ensure that the experience will be able to grow and evolve along with the brand.
1. A Clear Path to Enrollment
Promoting the benefits of subscription enrollment at multiple touchpoints on a shopper’s journey can help brands grow their subscriber base. This includes messaging on the homepage, category page, product page or shopping cart. Furthermore, a dedicated FAQs page can detail the full value of becoming a subscriber.
In addition to making shoppers aware of the benefits subscribing provides, it’s important to offer multiple opportunities for subscription enrollment on your site. Then, a seamless, integrated checkout makes it as easy as possible to complete purchase and subscription enrollment. A common mistake that’s made is a “hijacked checkout,” or when a merchant transfers shoppers to a different site — and interface — to complete a subscription purchase.
Communicating how subscriptions can benefit the shopper and ensuring options to subscribe are visible at multiple points in the customer journey can transform browsers into new subscribers.
2. A Flexible Subscription Experience to Maximize Retention
While enrollment is important to grow a subscriber base, retention is essential to drive overall subscription performance and a reliable, recurring revenue stream. Smaller or niche brands are often known for their customer service and interactions that build loyalty. Subscription experiences also establish greater loyalty by fostering relationships, even as the company grows.
A common mistake brands make is not allowing customers to update their subscriptions out of fear of churn. However, offering subscribers more control over their recurring orders actually reduces the likelihood that subscribers cancel their subscriptions. For example, subscribers last 135 percent longer when they can skip an order and 71 percent longer when they can swap a product.
In addition, order data allows brands to proactively engage with customers and anticipate their needs, demonstrating the value of subscriptions and encouraging retention. To successfully engage with subscribers, brands must be able to predict future moments of need to offer timely and convenient prompts, with creative and relevant messages via email and other channels.
3. Incentives to Increase Average Order Value
Incentives are a way to reward loyal subscribers for their recurring purchases. Typically, this looks like a reward after a predetermined number of orders or points, and can be a free order, a gift with purchase, or an increased discount. Offering customers a “subscribe more, save more” offer can foster loyalty by offering greater discounts for additional subscriptions, ultimately increasing average order value. Brands can also provide additional opportunities for upsell by bundling orders and products.
Effective Subscription Experiences Assist in a Brand’s Growth
As emerging brands look for opportunities to grow their business, it’s critical to drive acquisition, retention and increase average order value. Shoppers crave convenience and control, as well as cost savings and rewards. Providing these benefits builds long-term relationships and loyalty as brands prove their worth to consumers. With these elements in a subscription experience, brands are poised for continued growth and success.
Casey Burt is director of customer success at Ordergroove, a subscription commerce platform.