The subscription business model is a lot more than new. But as mobile commerce and e-commerce have taken off, so as the recurring revenue models with various businesses based on subscription. While it is easy to attract new customers to a subscription business, especially if your marketing skills are good, keeping them is another thing. And without recurring revenue, the business cannot be there.
So, what are the steps that businesses currently use or plan subscription models take to decrease the churning of the customers and ensure a steady revenue stream? These are some of the tips in customer retention and acquisition from successful subscription businesses.
1. LET THE CUSTOMERS TRY BEFORE BUY
Allow them to try your product and get hooked on it before charging them. Consider going with a free trial and make sure to keep the pricing simple. At first, the pricing structure can be more for the first month, than an additional cost every month. Customers can find this confusing, so it is better to simplify and saw an increase in subscription rates.
2. RESEARCH TO DECIDE IF APPLYING SUBSCRIPTION MODEL IS BENEFICIAL FOR THE BUSINESS
The entire business scope needs to make sense for a subscription model. It is essential having a product that the clients are looking for and need replenishing urgently. After that, ask yourself the following questions, like, “Does any other person offer a similar thing? Is the market large enough to sustain the business? Can the product be delivered on a continuous basis? How your subscription service will fix an issue or add value to the lives of the customers?
3. OFFER DISCOUNTS ON LONGER-TERM SUBSCRIPTIONS
There are two kinds of consumers: one who will use the product forever and the other ones are those who are only looking for a trial. By offering different subscription options, and discount to the customers who are ready to pay upfront for six months or more, you get the chance of attracting more customers and this will automatically lead to an increase in revenue.
4. OFFER SOMETHING UNIQUE
Successful subscription box business companies add value outside of the solution itself, often through community or content. There are so many different ways from which the value can be added. It can either be done through the community, content, or stories. Make sure to do it in a way that will be beneficial for the identity of a brand.
5. USE A FULFILMENT SERVICE
Dozens of companies help subscription businesses with the dirty work of packing, picking, and shipping. Unless you love glue-mouth and paper-cuts, do a favour to yourself and find the right partner for this. It can be cheap and simple if you consider doing it correctly.
6. DON’T SKIMP WHILE PACKING
The packaging from outside can either leave a bad or good effect on customers. Do not use a USPS flat-rate priority box, it will look cheap and feels the same. If your business is premium and doing well, consider going with the premium packaging. With different ways, it can be shipped easily while keeping high-quality in mind and costs low. It will make a huge difference in how the customers perceive the box and increase retention significantly.
7. MAKE USE OF ANALYTICS TO DECREASE CHURN AND SPOT PROBLEMS
Keep everything tracked with analytics, primarily the attribution for digital spend and conversion funnel. Define your key performance indicators and make sure that the team consistently goes through them on dashboards regularly.
8. STAY ON TOP OF THE CUSTOMERS AND MAKE RENEWAL PROCESS AUTOMATIC OR SIMPLE
Personalized communication is considered to be the biggest factor in reducing churn and re-engaging consumers. Collect a lot of data as much as you can about the customers and email the personalized information and offers on their mail to let them know about the renew before churning, which usually takes place at the period of three, six, or twelve months. Let customers give an option to auto-renew, or have a frictionless system for renewals. If you will make the task simple for subscribers, there are more chances for them to stay. You also have the option to make renewal automatic.
9. OFFER EXCELLENT CUSTOMER SERVICE
Make sure to keep your customer support ready in case the subscribers are facing issues. It should be your policy to always help the customers first. Only keep the passionate and helping people in your team.
10. BILL WITH INTUITIVE AND ACCURATE INVOICES
The bills should not be complex, instead, simple to understand, accurate, and branded appropriately. Your billing system should effectively manage the data points needed to calculate bills accurately and clearly. Think of it as a step in establishing a long-lasting and transparent customer relationship.
Practice your thinking: look for affordable, scalable, and easy back-to-back solutions which can be implemented easily. Avoid expensive installations. If something isn’t working out, drop it and move on.
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