Ever wonder if subscription services are for you? – You’re not alone!
You may have heard of this term before, but you aren’t quite sure what it is and why you may need it. Worry not, because this blog post is going to break down the need-to-knows about subscription services: what they are, reasons to use them, and reasons not to use them. After reading this, you’ll be one step closer to knowing whether you need subscription services for your eCommerce site or not.
Subscription Services: What They Are
Subscription services (read: newspapers, Netflix, cable, etc.) aren’t new to businesses. In fact, many businesses utilize these subscription services to provide ongoing services to their customers while customers provide recurring or ongoing payments.
There are generally three types of subscription services:
- Replenishment Subscription Services offer the convenience of scheduled deliveries on a regular basis. Another benefit for the customer is that this option allows them to save money on every order.
Example: Dollar Shave Club
- Curation Subscription Services offer product suggestions that are targeted exactly to each customer while providing variety in each shipment (because sometimes the surprise is nicer than having to decide what you’re getting!).
Example: Stitch Fix
- Access Subscription Services provide products that are hard to find anywhere else. Hello, exclusives!
Example: Thrive Market
As you can see, each of the models provide some sort of product of service to the customer on a regular basis. A typical way to do this is by having the customer sign up, or subscribe, to the service, and pay an automatic monthly recurring fee. Okay, now you know what they are, now let’s talk about why you might use them.
Top 3 Reasons to Use Subscription Services
#1: Increased Customer Retention
By implementing this model, you can increase customer retention in a passive way. Customers like services of value. This is a great opportunity to show them that you can consistently deliver the same services and gain more value over time. This helps customers build that trust with you that is crucial for long-term success and overall happiness. You can also create a steady stream of cash from the subscription model, as your customers aren’t just one-time customers.
#2: Increased Engagement Opportunities
By constantly providing services to your customers, it is inevitable that you will also be communicating with them often (well, you should be, at least!). There are many opportunities for you to engage with your customers over the course of their subscription. Whether you market add-ons to their current subscriptions or exclusive drops just for them, every opportunity provides a chance for you to communicate with your audience! Engagement is a great way to ensure that your customer feels special and display that you care about their journey – not just their money.
RELATED READING: How Selling Can Transform Your Client Connection
#3: Ability to Personalize
Customers are people, just like us. They enjoy feeling special, especially when it’s their favorite businesses thinking about them (that’s you!). Personalization is a great way to make sure that you are keeping your customers happy, and you can personalize your product or service offerings with this model. When customers are happy with the services you provide, they will continue to obtain those services, which in turn builds a loyal customer base, increases retention, and allows you to enhance your relationship with each and every customer.
3 Reasons Not to Use Them
#1: Potential to be Repetitive
There are some companies that provide you with the same products each month. Like with most other things, the same thing after so long can become boring. If you do choose to provide a subscription service, don’t forget to add variety! There are plenty of services that specialize in only sending you a variety of items, and they are definitely worth checking out when you start to build your model!
#2: Risk of Turnover
Having an eCommerce subscription service can feel risky because the customer signs up (and cancels) at any time they please. This also makes it more difficult to determine how you will classify turnover. When building a loyal customer or client base, it is important to show them from the start that you really care about them and are interested in helping solve their problem. They are not interested in companies that are cold and obviously only in it for the money. This is your chance to show them you are different!
#3: Competition
There are a ton of subscription services these days, so how can you make sure that yours is standing out from the rest? An easy way to stay on top of your competition is to cultivate those close relationships with customers online and keep your services personalized and relevant. By maintaining value, you are promising your customers that you are different from the rest of the competition and that it will stay that way.
Like most things, there are pros and cons to each and every decision we make.
ECommerce subscription services can offer a lot of value to your customers, such as saving money on each delivery, access to exclusive products or classes, and more. While a subscription service might not benefit every business, you can use this guide to help you decide if eCommerce subscription services are right for you!
Happy Evolving!
