I recently succumbed to the pressure of Valentine’s Day, and not wanting to go too soppy, traditional or lavish with a gift, started to look into short-term subscription services.
Subscription services seem to be taking over the world one post box/inbox at a time. From the more conventional Netflix and beauty boxes of the world through to silky underpants or sanitary towels – if you can fit it through a letter box or connect it to the internet – it’s fair game.
Returning to the task at hand, there was plenty to choose from. Cigars – too pricy, socks – too cliché, razor blades – out of the question … beards are good. Coffee – Yes. Thoughtful, yet mutually beneficial.
So off I went. On my search to find a reasonably priced coffee subscription service – and it got me to thinking – how do you do a subscription service right?
Wake up and Smell the Coffee
We are lazy consumers. We are trending towards a more simple and hassle-free shopping experience so we’re turning to subscription services. Businesses who are operating using this model are seeing incredible growth. The models are scalable, flexible and inspire loyalty – or rely on our inherent laziness.
Moving away from project agreements and one-off purchases towards securing revenue under a subscription means companies can avoid inconsistent service due to recalculating costs. You can be agile and adapt to the needs of the consumer.
As well as more consistency in revenue, it also makes it easier to:
- Calculate a lifetime value for your customers
- Forecast revenue
- Keep your product line curated
- Get to know your core buyer persona really well
Sounds wonderful right? But how can companies make sure the subscribers stay subscribed? Let’s look at how my experience panned out and why marketing automation can really become a subscription service’s best friend.
Doing It Right
As a subscription service fan on a voyage to find good coffee, I’ve consistently come cross three big bugbears which subscription services need to address:
1. Lack of Transparency
Kate Hudson’s athletic wear company, Fabletics, famously found itself under fire after customers complained they had no idea they were signing up for a subscription service. If you’re going to run a subscription service with recurring fees or additional costs, call a spade a spade and make sure it’s clear to customers.
I experienced a similar lack of transparency with the first shortlisted coffee company. £6.50 per delivery they said. It will be delicious they said. Cue add to basket where an extra £2.50 per month is added for postage …
2. The ‘Off-Radar’ Approach
Going off grid with your customer comms in the hope that your subscribers will just forget about you and continue to pay is not the path to reducing churn.
As a case in point, I moved into a new house six months ago and I’m still receiving a monthly subscription box for the old owner. What’s going on?
A) Why hasn’t she noticed?
B) Are the products so boring that she’s forgotten about them?
C) Why isn’t the company sending dispatch notices or regular emails to keep her engaged?
When she remembers, she’ll likely be miffed and she’ll likely cancel.
Once I’d selected a coffee company, I experienced a similar lacklustre approach. There was no order confirmation and two days later they emailed a discount code for a three-month sign-up. They’ve been off-radar since.
Don’t they want to tell us our coffee is on its way? Don’t they want to know if we enjoyed it so they can tailor next month’s bag to our preferences? Apparently not.
You need to target user behaviour and actions to keep your audience engaged and informed. Dispatch notices need to be sent along with regular updates. Charm your customers with fantastic personalised service and exciting products. Don’t trick or bore them into staying with you.
3. The Cancellation Black Hole
Netflix are a shining of example of a company doing this right. If you want to cancel, it’s one simple button within the account interface. It isn’t hidden on the other side of the rainbow and you don’t have to jump through flaming hoops to find it.
The coffee subscription service scored well here. They took one payment for the three-month period and there won’t be any recurring charges. No terms and conditions which state I have to notify them after the initial period if I don’t wish to continue.
The experience you deliver to customers should assist them and make them want to stay with you. If they want to cancel let them. Then just use your amazing marketing automation to send them special offers to lure them back on board.
How to Win at CEM and Marketing Automation
The common denominator when it comes to service gaps is the lack of a good customer engagement strategy.
Subscription services are a goldmine for customer engagement. Or at least, they should be…
If someone has signed up to a subscription service, they have shown an early sign of loyalty. It’s your job to grow that loyalty and maintain it. But where many subscription models fail is in defining and delivering a strong customer experience.
The three elements should be:
- Consistency – staying front of mind, and consistent (and regular) in messaging, you build brand loyalty
- Engagement – encouraging and monitoring engagement will help you develop the relationship
- Personalisation – use your data! Behaviour, purchasing, predictive… personalise your customer comms and you’ll keep your customers
Subscriptions are all about customer experience. And customer experience is all about how you use your data to improve the buying process.
So automate, be consistent, and ensure that you are able to personalise to a high degree based on what users have done, and what they have bought, and what you’ll notice is that users become increasingly loyal.