Introduction
There is little doubting the power of the subscription service. No matter where you are in the world, the subscription model is booming and shows no signs of stopping. In 2019, before the coronavirus pandemic had begun, it was claimed that we were entering an era characterized as “the end of ownership”.
After the pandemic struck and people around the globe moved their spending online, the sector continued to grow. In the US in 2020, the subscription market expanded by just over 66%, and in the UK, the market is expected to grow by 77% and be worth £1Billion by 2022.
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The Subscription Economy Index
Studies show a 437% increase in the subscription economy index from the beginning of 2012 to the end of 2020.
So just what are these businesses doing, and why are consumers lapping up their services?
What Are Subscription-Based Products?
It was once the case that, when customers wanted to own something, they had to know what it was and where to get it. The manner in which subscription-based products differ from this dynamic is twofold.
First, the onus isn’t on the customer to be proactive. Anyone who has subscribed to a magazine or newspaper – an analogy that works best for those who remember how to send fax – will already be familiar with the idea of getting something delivered to you on a daily, weekly, or monthly basis. This model operates with the idea that the customer is happy to repeatedly engage with the content from an outlet.
Second, the service offered by the business is more flexible. While some subscriptions deliver a product that the customer knows, others curate their products from different brands. These can exist anywhere, from food and drink to music, hair and beauty to literature.
Subscription services have positioned themselves as experts in their niche. They provide new and perhaps previously undiscovered products for customers to explore. They are now curators that are trusted by their customers.
This method has certainly worked for VMP, as their worth grew to more than $10million in five years, a real-life example of how they have converted more through their subscription offering.
It’s a wonderful time to be in this space, with the rewards being huge, provided you get it right. In this post, we’ll share five key things to consider to turn your subscription-based product into a success.
Transparency
For a company that offers different packages, the idea of hiding your most valuable product behind a paywall can seem tempting. Offering exclusivity to your most valued customers is a way to display that you care about the people spending the most money with you.
However, studies suggest that doing so can alienate you from approximately 90% of potential subscribers, with a “hard” paywall often creating an assumption that you have something to hide.
Displaying your entire product range eradicates this potential issue. It instills confidence in the prospective customer that they’re unlikely to get caught out by your business. It also conveys a more accessible message and ensures you aren’t relying heavily on your basic or entry-level products.
Flexibility
We’ve all been there. Mindlessly browsing the internet, unsure of what it is you are actually looking for and then you find it. A product that you didn’t know you needed, but are now obsessed with. You flick through the description, check the reviews from customers, and everything is going well.
Everyone loves this magical item – be it a book, a moisturizer, a new sweet treat – and you will as well. You’re about to add it to your cart and enter a new chapter of your life, free of all the troubles you once had. And then wham. You see the price.
As far as belt-tightening goes, a global pandemic is a pretty unrivaled force. If things were tight for people before we all went into a series of lockdowns, then, for many, they’re even tighter now.
Businesses that accept and incorporate this into their strategy will find the greatest success in the months to come. There are few better ways for a subscription-based service to do this than through its pricing.
Allowing customers who want, to pay for your service in a variety of different ways – as in the images below – ensures that no one gets left out. The use of a really easy-to-use cart migration, like LitExtension, can perform miracles in this regard. It also allows customers to tailor their experience to what works best for them. That is something which no consumer would ever refuse.
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Craft Gin Club
Clarity
Trying to navigate a change in your business, whether it be weighing up the advantages and disadvantages of switching from PBX to VoIP or upgrading the bandwidth of your server, is impossible without a high level of clarity.
In fact, moving outside of business altogether, surveys have shown that humans are innately resistant to change. Persuading people to try something new is an immensely complex task. A clear and obvious proposition can make it easier.
The easiest way to achieve such clarity is to ensure that you don’t assume anything about what the customer already knows about subscriptions.
Whilst the subscription industry is unmistakably in the ascendancy, more than 3 out of 4 Americans do not partake in a box-of-the-month subscription.
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Figure
By devising a website that has slick UX design, accessible language, and simple graphics, you aren’t discounting anyone before they even begin to explore your business proposition.
Advertising
So, you’ve created your subscription-based product or service. You’ve built a strong website around it. And you’re getting a few new customers every day. But it isn’t exploding yet.
How do you get the word out there? What is the best way to reach a mass audience and convert more people to your brand? The answer is actually pretty simple. Influencer marketing.
Yes, we’ve all seen – and found ourselves rolling our eyes at – influencers and some of their questionable online behavior. From eating tide pods to nearly electrocuting themselves with their own money, the people who make their living online can rarely be relied upon to convey a moral authority of any kind. But they do have an audience and, in the best-case scenario, a lot of prospective customers at their disposal.
Shipping a free sample to a well-known influencer whose content exists within your niche, and asking them to produce content around it, can be a game changer for your business.
Nearly 90% of marketers found that the return on investment (ROI) for campaigns that use influencer marketing is equivalent to or better than those which don’t.
And now that platforms like Instagram and Facebook are offering a platform to shop on their own site, the integration of your campaign on a site with existing cart migration will only improve these figures. All you need to do is launch the campaign and then track your subscription metrics to figure out the sales and revenue that the campaign is driving for your business. Based on that, you can figure out the ROI of your campaign too.
9/10 experts are pointing towards something that can enhance the performance of your business. So, it is worth trying out.
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Influencer Marketing
Engagement
You’ve sent some free samples out to some influencers and received a great upsurge in sales. Your business is now growing by the day. You’re in profit, but you’re noticing that, after a few months, people are canceling and moving elsewhere. How do you go about ensuring that you keep hold of your customers for years?
People’s attention spans are now shorter than that of a goldfish. Technology has upgraded at a rate that has made mobile phones infinitely smaller than they once were and means that we exist in a world where there is an answer to the problem of how to get fax without a fax machine. The immediacy of our world means that, as consumers, we are all too readily distracted by the next big thing that comes along. And these “next big things” are coming along thicker and faster than ever.
There’s only so much excitement you can engineer from the business side. To ensure greater levels of customer buy-in for longer, building online communities around your business could be the solution. Indeed, some studies have found these outperform any other kind of promotion you attempt.
As a subscription-based business, the human connection that physical retailers enjoy can be pretty hard to manufacture. Thankfully, community-based social media sites like Reddit can offer a solution.
Engaging with consumers at their online “watering hole” is a great way to inject a more personable side to your business. Answering any queries they have, or being pre-emptive with announcements creates a sense of togetherness that digital businesses often neglect.
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Reddit – a Community-based Social Media Sites
Conclusion
Illustrated above are the undeniable benefits of delivering a properly functioning subscription experience. Using the guidance above, and remembering the five elements that ensure that your subscription service is successful, should allow you to convert more customers by using this model.
No business is foolproof and nothing in this world is guaranteed. If any twelve months has proven that, then the year we’ve just had is it. But the above steps and things to remember highlight age-old business guidance around value for money. They also guide us how to effectively advertise, and put the control in the customer’s hands.
If you can implement these, and with a little luck along the way, your subscription service truly could be the next big thing.