If it’s starting to feel like subscriptions are everywhere you look, there’s a reason for that. After all, the global subscription eCommerce market is predicted to grow to $2419.69 billion by 2028. (For context: it was valued at $96.61 billion in 2022 — so yeah, it’s really taking off.)
Now the question for DTC founders becomes how to best stand out and get their subscription business noticed in the sea of other subscription offerings. I get it; it’s a big undertaking. But at the end of the day, a core part of a strong brand boils down to effective communication — which looks a little different in the retention-oriented subscription space.
I’m diving into the best subscription marketing strategies for boosting customer retention and creating long-lasting relationships with consumers to maximize customer lifetime value (LTV).
Hey, it’s a valid question. Before I can talk about specific strategies, it’s important to discuss why this conversation is even warranted in the first place.
Simply put, applying a traditional marketing strategy to a subscription business just won’t work nearly as well.
Pay-per-product businesses typically put their marketing efforts into increasing the number of purchases in general, whereas successful subscription businesses focus on retaining their existing subscribers. That’s because retention is a key driver in any thriving subscription business.
In general, returning customers are more likely to spend more money, refer friends, and try new products, making them 22 times more valuable than non-loyal customers. Of course, it’s also important for any business to draw in new consumers, but investing in current customers is an incredibly lucrative strategy unique to subscription marketing.
It’s pretty clear why the subscription business model is highly attractive for eCommerce brands. Beyond the opportunity to take advantage of a booming industry, I can sum up in two words one of the biggest draws to the subscription model: recurring revenue.
But what about on the other end of things? Why would a consumer voluntarily opt to regularly (and, sometimes, indefinitely) pay for a product? Even just fifteen years ago, this probably would’ve seemed like a tough sell. These days, clearly, that’s not the case.
There are four reasons why subscriptions have taken off from a consumer point of view, and it’s crucial to understand these draws in order to develop a subscription marketing strategy.
I’ll briefly break down the main draws:
“Subscribe and save.” We all know it. We’ve all heard it. The ability for consumers to save money in the long run is one of the biggest draws of the subscription model — and many businesses include a clear strikethrough of the regular price on their PDP to illustrate savings (like Neuro, for example).
Brands can further leverage the ‘savings’ component of subscriptions by strategically upselling through the lens of savings — like by offering bigger bundles that are more cost effective than buying each individual product alone. But more on that later.
When it comes to eCommerce, the pandemic absolutely catapulted the value consumers place on convenience. The ability to regularly receive necessary products without having to lift a finger — and being able to easily manage subscriptions from the comfort of home — were both highly attractive draws in a Covid-conscious world and continue to be today. Whether it’s a fun product like Pot Gang’s gardening box or an everyday essential like Unbloat’s anti-bloating capsules, subscriptions just make everything easier.
Yes, this goes hand-in-hand with convenience, but there’s a particular opportunity for subscriptions to capitalize on replenishments (especially the more mundane essentials that aren’t fun to shop for). It’s really annoying running out of, say, razor heads. Enter a razor subscription that gets delivered every time you need to replace your razor heads and you never again have to think about running out of razors. So long as people continue shaving, there will always be a need for this repeated delivery.
Subscriptions open the door for long-term relationships with brands, which is a highly unique experience that’s so full of potential. The more subscribers engage with a brand over time, the more brands can lean on data and analytics to learn about each individual subscriber.
This means more tailored recommendations and personalized interactions, an opportunity to reward loyal subscribers with discounts and additional perks, the chance to welcome these valued long-term subscribers to give feedback and have a direct impact on the brand — the opportunities are endless.
By understanding what typically draws consumers to subscriptions, brands can better position their offerings within the context of these benefits. Even in more creative and unusual marketing strategies, remembering to lean into savings, convenience, replenishment (when applicable), and the perks of a long-term relationship with a brand will ultimately be beneficial.
We’ve talked about why subscription marketing is unique and why consumers are flocking to subscriptions. Now how do eCommerce businesses create successful marketing campaigns?
Of course, I have to preface that there’s no one-size-fits-all strategy. Every brand is unique, and it often takes some level of trial and error to get it right. Having said that, these are some strategies that have been proven to be effective for a range of DTC brands.
Let’s dive in.
This goes for both retention purposes and acquiring new subscribers: overly promoting and clearly communicating the value of subscribing is a subscription marketing essential.
The first place to look is your PDP page. This is a prime opportunity to relay the benefits of subscribing and set the bar high for the transparency and autonomy that customers will get if they subscribe. Notice how Freestyle utilizes their bright brand colors to draw visitors’ eyes to the 15% discount subscribers get by auto-renewing. The brand also points out the exclusive swag, discounts, and surprise gifts available only to subscribers.
Beyond the PDP page, it’s important to continue to engage your current subscribers and even more important that they’re aware of all of the advantages they get by being a subscriber. I’ve seen many brands send emails outlining how consumers can engage in their customer account portal — like by redeeming loyalty rewards, cashing in on referral perks, and changing the frequency of their subscriptions.
For brands that give subscribers exclusive access to certain products, make that extremely transparent. The effect will be lost if your subscribers don’t realize this is an added perk. I say this often and I’ll say it again: subscribers should feel like VIPs every step of the way.
Customers that have yet to subscribe are also prime targets for subscription promotional emails. You can set up an automated email flow to target one-time and repeat buyers alike, making sure to illustrate all of the advantages of your subscription offering.
Here’s a quick look at an example:
Avaline, an organically-farmed wine brand, does an excellent job clearly promoting the benefits of their subscription offering. Between discounts, flexibility, and added perks, Avaline presents a persuasive argument — with a direct, crisp call to action at the bottom. Working a promotional email like Avaline’s into your strategy is a smart way to convert one-time buyers into loyal subscribers.
As discussed, the best customers are current subscribers. The profitability of selling to an existing customer is 60 to 70%, so strategically marketing to these customers is a wise part of a subscription marketing strategy. A great way to do this is by utilizing in-cart upsells. Provide personalized, tailored recommendations to subscribers as a one-time add-on, or try marketing a discounted bundle option that gives subscribers the feeling of getting more for less (while increasing average order value).
Don’t Be Afraid to Leverage SMS Marketing
SMS marketing is on the rise — and there’s a reason for it. SMS messaging gets noticed, as it has a 95+% open rate. When we think about the number of emails we let sit unread versus the number of texts, this statistic starts to make a lot of sense.
Of course, SMS messaging has a much higher unsubscribe rate than its email counterpart, particularly in the first 30 days. Simply put, consumers have a far lower tolerance when it comes to texting — and that goes for the number of messages in general as well as the relevance of the message. But that doesn’t mean SMS marketing shouldn’t be touched. When used well, SMS can and has proven to be an incredibly powerful tool, and I’m not just talking about promotions (though those are great, too).
For one, it takes convenience to the next level. That’s one of the biggest draws of subscriptions in the first place. Brands can text order reminders to subscribers and give them the option to skip their next order directly in the text thread. Plus, it’s another great spot to send subscribers a link to their customer account portal to encourage further engagement and, again, highlight some of the many perks they can unlock thanks to their subscription. This can work wonders for improving customer retention and loyalty.
Or, if your brand wants to go above and beyond with SMS, there are so many creative opportunities to do so. Just look at L’AMARUE’s Skin Chat, a support feature where consumers can text any question or concern and get direct help from the brand. L’AMARUE’s Skin Chat aims to replicate one of the brand’s central pillars: the feeling of having a best friend to support you through your beauty journey.
By inviting consumers to come to them and establishing themselves as a trustworthy authority, L’AMARUE deepens their customer engagement and loyalty. Engaging your customers in a way that solidifies your brand’s messaging can help bring your customer experience to the next level.
This all comes down to a psych concept commonly used in marketing: social proof, or the idea that consumers look to what other people are doing to adapt their own behavior. Looking to others rather than trusting what a brand is saying carries significant weight — as in: over 90% of consumers around the world trust friends and family over traditional ads.
Reviews and “celebrity endorsements” (or, in our case, typically influencers or creators) are also subject to this “word-of-mouth marketing” effect. 88% of consumers trust reviews as much as personal recommendations, and 80% of consumers are more comfortable making an impulse purchase if an influencer recommends it.
In a business where relationships drive revenue, leveraging this kind of “relationship marketing” is a stellar way to get subscribers through the door.
Encourage subscribers to leave reviews — and you can even reward them for doing so. Ask your current subscribers for their favorite influencers/creators and try to connect with one who genuinely likes and uses your products. That authenticity will go a long way to boost social proof.
Another major way to flip the marketing funnel and focus on highly-engaged consumers is to incentivize this word-of-mouth behavior through gifting and/or referrals.
Offer to your existing subscriber base of loyal customers the opportunity to gift their next order to a friend or family member in lieu of skipping. You can also provide discounts or free products to those who refer a friend in the customer account portal. This is an excellent, cost-effective way to expose your products to a greater look-alike audience.
And here’s the best part: any referred customers that you successfully convert tend to spend on average 200% more than the average customer, so investing in increasing word-of-mouth marketing pays off in the end.
One way to prioritize retention is to be mindful of and strategic about churn, otherwise known as customers who stop buying from a brand.
When it comes to subscriptions, it’s essential that customers always know they have the option to cancel. But that doesn’t mean you have to stand by and let them leave. When a subscriber wants to cancel, it could be for a variety of reasons — and a great way to find out why is to ask.
Implementing a simple cancellation survey can help brands gain invaluable insight into why subscribers are choosing to leave, but beyond that, it can also help keep the subscribers around. Based on the reason the subscriber reports wanting to cancel, it’s a smart idea to present them with a relevant retention action.
For example: if the subscriber reports having a backlog of products, give them the option to pause or skip their next order to market the flexibility of the subscription. If the subscriber says the product is getting too expensive, present them with a discount for their next order. Plus, any patterns that appear in the cancellation reasons can be used to make adjustments to the brand overall — i.e., if 90% of consumers are reporting the product is too expensive, it might be time to consider a price adjustment or provide discounts to everyone after a few months to encourage subscribers to stick around.
The subscription market is booming and will only continue to grow, leaving an opportunity for DTC eCommerce brands to take advantage. By implementing strategic subscription marketing tactics that cater to customer retention and play up convenience and savings, brands can drive impressive recurring revenue and increase their overall LTV.
This post is a product of a partnership between Smartrr and Triple Whale. Try Triple Whale to access and leverage key data to transform your business, and check out Smartrr to level up your subscription offering and increase customer engagement.
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