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7 FACTORS TO DRIVE SUBSCRIPTION ACQUISITION AND RETENTION

Posted By: OceanX    |    Mon, 12/11/2017 - 04:15    |    0

This article was originally posted on Business 2 Community.  Read the original full article here or copied below

Subscriptions are increasingly popular, especially among Millennials. According to a recent study, 92 percent of Millennials have active subscriptions. But what makes them so attractive? It’s easy to identify: Successful subscription programs are now focused on the customer experience across the entire customer journey.

Wide acceptance and focus on the customer experience has meant people are no longer afraid to commit to a subscription. They can count on an easy cancellation process, no late fees, free or easy returns, and, in many cases, curated experiences based on their interests and data (think Stitch Fix and Le Tote).

It’s even more telling that massive brands, such as Gap and Under Armour, that have risen to global prominence through the traditional retail model are turning to subscriptions to find new growth. Gap currently offers two subscription boxes, BabyGap’s Outfit Box and the Old Navy Superbox, which is launching just in time for the holidays. Gap reports an influx of new customers and high customer retention from its boxes — plus, the brand is gathering a wealth of data from new subscribers.

How have brands like Gap, Old Navy, and Under Armour and subscription retailers like Stitch Fix, and Le Tote, and Loot Crate been able to drum up such an interest in their subscription programs? These seven factors not only attract customers to subscriptions, but they also offer value to keep them engaged over a long lifespan:

1. Exclusivity: Loot Crate, a subscription business based around pop culture trends, is excellent at providing its subscribers with exclusive products tied to movies, sports teams, video games, and other genres. In most cases, the only place someone can receive these items is through a Loot Crate subscription. The same is true for Winc, one of the largest wine subscription programs in the United States. The wines Winc ships are available to subscribers before they consider launching into other e-commerce or brick-and-mortar channels.

2. Curation:Customers expect memberships to offer more than the delivery of the same box everyone else receives. Stitch Fix creates a profile for each subscriber through surveys, data mining, and artificial intelligence. Human stylists use this information to build a selection of five items per box that each subscriber is likely to love — even though there is no obligation to buy. They use a mix of curation and customization based on the data to create an experience that improves over time.

3. Low commitment:Le Tote similarly offers its customers an apparel delivery. It uses information about each subscriber’s tastes and sizes, but once a subscriber receives the items, he or she can choose to buy the items outright or simply rent and return them. This lack of commitment can be just what a subscriber needs to sign up.

4. Fun: Boxes such as FabFitFun continue to thrive because receiving a shipment is a unique experience that consumers anticipate, wondering each month what surprises are in store. While FabFitFun’s subscribers know they will receive new and exciting health and fitness products each month, the themes and details vary from box to box, so opening a shipment can feel like opening a gift on Christmas morning.

5. Replenishment with a twist: Surprising subscribers is critical, so subscription programs focused on replenishment, such as Dollar Shave Club and newly launched BarkChef, need a twist to keep consumers interested. BarkChef regularly delivers perfectly portioned dog food, but it rewards subscribers with occasional treats or toys as a bonus. And Dollar Shave Club sends its customers razor blades and shaving cream, sure — but it does so while including witty packaging and other reading materials.

6. Ease of use:The relationship between a brand and its subscribers should be easy — and that goes beyond the expected low costs and hassle-free shipping and returns. Sending surveys and gathering information are necessary tactics for brands such as Stitch Fix to ensure each customer feels known and understood, but too much pestering can be off-putting. Brands shouldn’t ask for so much information that customers feel like shopping for themselves would be easier.

7. Influencer participation:Customers are drawn to influencers because they give brands a human element, and subscription brands like Ipsy use influencersto build excitement around their deliveries. Although some companies might be wary of entering this market due to cost, influencers don’t have to be movie stars: Deloitte reports that customers who discover a brand on social media are 129 percent more likely to convert, so brands should find rising YouTube stars or Instagram users and try to form relationships that are mutually beneficial.

Today, there are thousands of physical subscription options, and this number will only continue to grow. Look beyond the products you’re selling to find an emotional connection with subscribers. Products might get them to sign up, but a connection is what keeps them longer than the first month or two.

If you can begin to gain insights and empathize with their emotional needs and desires through these seven elements, you’ll be able to create a subscription with a high retention rate and droves of happy customers.

Want to learn more about the psychology of subscriptions? Download our psychology of subscriptions whitepaper today to discover even more ways to connect with your subscribers.
 

Category: Subscription Strategy New Membership Economy