These days, it seems as if every brand is developing its own subscription service. From newcomers like HelloFresh to the original trailblazers like Netflix, more and more companies are jumping on the bandwagon. And it’s no surprise, as more than one-third of Americans believe they’ll increase their number of subscription services in the next two years. It’s a good time to make the most of your consumer relationships through subscription marketing.
The convenience-based subscription model successfully shifts risk from the buyer to the seller and streamlines the shopping process. With a plethora of options and impressive statistics, many marketers are beginning to ask themselves how they can apply the subscription model to their own businesses. Here are some tips to help you do just that.
Start Slow
From beauty boxes like Ipsy to at-home meals like Blue Apron and everyday items like Dollar Shave Club, the subscription market has covered all the bases. Even with the mass amount of options, the influx of new subscription services remains consistent, with a number of established brands seeing steady growth. Well-known media services provider Spotify had 100 million premium subscribers worldwide as of the first quarter of 2019, while fellow big-name brand Hulu reported having 26.8 million paid subscribers.
While the stream of new subscription services is undeniable, it’s important for marketers to be wary of potential pitfalls to avoid when entering the industry. It’s exciting to enter a new arena, but coming out of the gate too strong can be more detrimental than impressive in the eyes of consumers. Marketers that start with a scalable channel — online cost per acquisition (CPA) display, for example — reduce their risk of burning ad dollars early on by spending only when their campaign objective is met.
Reinvent Your Product
For subscription marketers, success means staying on top of your game and constructing reasons for consumers to remain with your brand, as opposed to the outdated model which relies heavily on making it difficult for customers to sever ties. Victory in the subscription space is seldom the result of an innovation thrown abruptly into the market but instead comes as the result of diligent audience and competitor research that results in creating value for the consumer.
Rather than start from scratch when building out new sales strategies, companies should encourage customers to look at products in a different way, essentially creating a re-launch while guaranteeing repeat business. Brands must offer something customers aren’t expecting in an ongoing effort to keep their products relevant and attractive. By stepping into the subscription space, companies can focus on customer acquisition and retention but in a new way and a new arena.
Begin With The Basics
Subscription services are often positioned as a quick and efficient way for consumers to get what they need, when they need it. Everything from finance to fitness can be delivered right to the door with the push of a button. With the ease the subscription process provides, customers are willing to repeatedly pay a set fee for one service.
Before subscription marketers can get their products into consumers’ hands, they must nail down the basics. First, brands should clearly define their target audiences. Second, brands should establish strong value propositions that resonate with their audiences and explain their business models. Subscription marketing tactics should be less about what your brand is selling, and more about interacting directly with the consumer and forming emotional connections. Potential buyers will ask themselves, why should I buy from this brand? It’s a marketer’s responsibility to communicate a unique selling point (USP) to the audience that encourages potential buyers to take action.
Get Help Where You Need It
Money can be an everyday stress for many people. Now, budgeting is made easy because subscriptions will typically tailor products or services to fit into each customer’s monthly budget, enabling buyers to avoid the pressure of saving up while simultaneously controlling future spending. Marketers should think of a subscription service as enabling immediate gratification.
Likewise, implementing a set monthly fee allows for a brand to reliably predict the revenue they will receive and avoid the unpredictability of one-time sales. With that being said, credit card merchant processing is a tricky business, and it is often beneficial to partner with individuals or companies that offer direct expertise in this department.
E-Commerce And The DTC Model
There’s no doubt the expansion and adoption of digital media and e-commerce have made it easier to go direct to consumer (DTC) and have been the building blocks to successfully and efficiently reaching consumers. The DTC model paved the way for digital media brands to provide consumers with exactly what they want, when they want it, directly from a brand, in a personalized way.
If you are looking to make an impact in the subscription space, it’s important to understand the basics. Always remember four areas of expertise when building out your subscription team: media, offer development, creative and technology. Lastly, ensure each strategy you implement within your subscription model is working toward the goal of lifetime value.
Interest in subscription-based models will grow, but the real success in the subscription landscape comes when marketers understand driving repeat conversions is more important than one-time sales. Subscription services should have value for the company and the consumer. If marketers play their cards right, these services can become mutually beneficial partnerships.
