Keeping Your Subscription Customers Happy and Loyal
Subscription e-commerce services like Birchbox and Dollar Shave Club are fairly simple business models that, when done right, are a win-win for both consumers and retailers. Consumers enjoy a low maintenance shopping experience, while retailers are rewarded with stickier customer retention and a more predictable cash flow.
Over the past few years, we’ve seen this market explode into every niche possible. From aspring artists to zombie lovers, there’s a subscription box for everyone. However, all this growth can bring challenges in scaling your business — in addition to keeping customers happy with their experience and loyal enough to keep subscribing. So how should retailers deal with these growing pains? Below are five tips for ensuring positive brand experiences and smoother business operations:
- Diversity keeps customers engaged: Product fatigue can lead to cancelled subscriptions, so many brands choose to diversify their assortment over time to include complementary offerings. For instance, fitness subscription company Fabletics recently introduced The Swim Shop. If a customer feels they’ve hit their max on yoga apparel, they might opt to order swimwear or one of the many other complementary products that Fabletics now offers rather than canceling their subscription. Diversifying your selection can also help attract new customers and grow your subscription base.
- Brand care is crucial: When a customer unpacks their subscription box, they're experiencing your brand. Everything from package condition to tissue paper selection is part of that experience. These little things go a long way in keeping customers interested in your brand and subscribing to your service.
- Package complexity is a factor: When thinking about your brand elements, also understand that the complexity of packaging can greatly impact your profitability. Costs range from materials and production to labor and warehousing the package materials. Companies should conduct packaging exercises to explore factors such as typical order size and assortment to determine ideal packaging materials and arrangements to control cost while still delivering your brand.
- Address data cleansing needs to be a priority: Data cleansing is a huge opportunity for e-commerce subscription companies. When a customer moves and forgets to update their address in the system (or inputs their address incorrectly in the first place), retailers are left with an undeliverable return and an unhappy customer. This can quickly become a logistical nightmare as you grow your subscription base. Address verification services are critical to ensure address accuracy, mitigate undeliverable returns and maintain strong customer satisfaction.
- Shipment schedules are a strategic decision: There are two common methods for scheduling subscription shipments. Some companies prefer a recurring “shared drop date” that's shared across all customers, while others prefer “anniversary drops dates” that are specific to each customer. Both solutions offer advantages and disadvantages, which is why your shipment schedule warrants special consideration. For example, shared drop dates ensure a tighter delivery timeline, but at the expense of flexible delivery windows which might frustrate potential customers. Anniversary drop dates offer greater convenience to the customer and distributes volume over time, but require the tighter management of resources (materials, inventory, staffing, etc.). In either event, a logistics partner can greatly assist with scheduling as you consider what's best for your business.
The e-commerce subscription business model is just a few years old, but has grown swiftly. As new subscription services continue to launch in more markets, keeping your existing subscribers happy and loyal will become crucial to the success of your business. The key is to keep it easy and not overcomplicate what's intended to be a fairly simple business model, while creating a unique brand experience at each delivery.
Chris Naso is the senior product manager at Newgistics, a provider of omnichannel solutions that span the physical and digital sides of commerce.