One of the easiest ways to simplify your life is to decide once, and then just set it and forget it. Subscription programs are one of the easiest ways to do this. You find a product you love—from beauty to laundry to snacks to apparel and so much more. Order once, and then the product magically appears as wanted on a reoccurring basis. Or, subscribe to a themed subscription box to get new beauty, pet, clothing, or other items that suit your interests – curated just for you.
More and more e-commerce businesses are providing this type of service to their customers. And customers are responding with rave reviews! After all, it’s a win for the customer because they save time and money, and it’s so convenient. Plus, it’s a win for you and your bottom line!
If your business model is based on a one-and-done transaction strategy, you’re leaving not only money but relationships on the table. A subscription-based business model provides for regularly recurring revenue (from biweekly to yearly), focusing on customer retention and relationships rather than just on customer acquisition.
4 Advantages of the Subscription Model
If you don’t yet have a subscription-based model, or if you’re trying to figure out how to leverage your current subscription, you may wonder if the advantages are real. The answer is absolutely yes. Here’s why:
1. Predictable Revenue
When following a pay-once model, you are constantly working hard to attract and convert new customers. This is not only expensive, it’s time-consuming and can lead to unpredictable results.
Once a customer signs up for a subscription, you earn payments on a regular basis. And because that amount is determined in advance, you can better predict your monthly revenue and ensure you have inventory and supplies to ensure your customer receives their orders on time. You’ll also enjoy a higher revenue stream than from a single purchase—in some cases, many times higher.
2. Decreased Customer Acquisition Costs
Customer acquisition comes with a cost for each new customer. Some companies can end up spending hundreds of dollars for each new customer. With ongoing subscription costs, the customer acquisition costs decrease as long as your customer continues to stay loyal. You, therefore, have a greater incentive to keep them happy by maintaining and strengthening your relationship and offers, so they continue to return month after month.
3. Up- and Cross-Selling Opportunities
Once you have a new customer and have built a foundation of trust, you can use data to better market additional or complementary products or services. Because you have already built trust and knowledge about your customers’ wants, needs, and values, you can customize offers that they’re more likely to find appealing with various pricing options and upgrade opportunities.
4. Improve the Customer Experience
The top goal should be to provide an amazing customer experience. Exceeding your customers’ expectations – from the products themselves to the unboxing experience, to consistent, on-time delivery is perhaps the most important key to a successful subscription business. The focus is on retention and customer loyalty. Your customers now have more choices than ever before, so it’s vital to continue to refine and improve their experience and engage with them to grow your business.
Partnering with a trusted provider that understands subscription fulfillment (also called continuity fulfillment) is critical to ensuring a great customer experience. A great logistics partner like QuickBox will streamline the process from the moment a new subscription is created – providing services ranging from box assembly and kitting, custom branded packaging, and fast delivery to your customers’ homes. Ready to get started? Contact QuickBox today.