Last updated: December 7, 2021 eCommerce
With the holiday season approaching, subscriptions are becoming an increasingly popular option when purchasing for friends and loved ones: nearly a third of consumers say they have received a subscription as a gift, and 44% are likely to give a subscription as a gift. As more consumers plan to shift their shopping online, and because such a wide variety of products are offered as subscriptions, a subscription can be a quick, convenient way to provide someone with a gift that feels perfectly curated to their interests or needs.
For brands, gift subscriptions are a great way to acquire new customers, but they present a unique retention challenge: the person receiving your product didn’t select it for themselves. On the other hand, the purchaser has essentially done the leg work of your marketing efforts by putting your product in front of someone likely to want, need, or use it—and allowing them to try it without any upfront investment on their end.
By developing and nurturing relationships with gift recipients, brands have a golden opportunity to turn these almost accidental users into lifelong customers. Here are steps you can take to engage and retain them:
Show off your product
There’s a good chance that the recipient wasn’t familiar with your company prior to receiving the gifted subscription. Put your best foot forward and help them develop a positive association with your brand. The quicker your product feels indispensable, the better chance you have at retaining this customer.
One of the primary reasons consumers cancel subscriptions is if they don’t deliver a superior experience, perhaps due to poor product quality or dissatisfaction with assortment. Take steps to make a connection and deliver a first-rate experience from the moment the first delivery arrives. Craft a unique unboxing experience, or personalize an introductory message with the recipient’s name. And be sure to include an overview of your company’s mission and values.
Nail care company Olive & June, for example, provides customers with a company overview from the founder, as well as a pamphlet with tips from professional manicurists and a detailed overview of their product offerings.
Make it easy to create and manage an account
Creating a seamless experience for the recipient to take over management of their subscription makes them more eager—and likely—to continue using the service. Make sure your initial box also provides clear instructions on how the recipient can create an account and contact your company for assistance.
Once the recipient has made an account, this should be a place where they can easily manage all their preferences—from the styles or sizes included in their box, to how frequently deliveries occur, to billing options. Though your priority is retention, it’s still important to allow customers to easily cancel, pause, or return the subscription if possible.
Gift givers, even with the best intentions, don’t always get it right. Creating a smooth cancelation and customer service process that leaves customers with a positive association with your brand can increase the chances that they come back later.
Focus your marketing efforts on the recipient—not the gifter.
Remember: The person who purchased a gift subscription might not have any need for your product or services. Or, they could already be a customer who thought someone else might enjoy the same experience. Either way, this person should not be the focus of your marketing. Avoid any negative impact to your brand by inundating the purchaser with marketing materials they don’t need.
Setting up customer details correctly from day one helps you collect the right data and market effectively. For example, Cratejoy offers a feature that allows purchasers to indicate at checkout whether or not the gift will automatically renew, and features clear subscription handoff communication when the initial gift is expiring.
Using tactics like this, segment your gift recipients and tailor your marketing messages to showcase your brand, demonstrate the value of the product, and plant the seed for continuing with the subscription. Depending on the information you have about the recipient, you can use a mix of email, direct mail, SMS marketing, and more to educate your new customers about the value they are getting from a subscription and encourage them to keep using your service.
Provide enticing offers ahead of the gift period ending.
Since the recipient didn’t set the terms of their subscription, it’s helpful to clearly communicate when their subscription is set to end—and to let them know in advance what their options are to continue or upgrade their plan. As with any subscriber, flexibility is one of the most important capabilities you can offer to gift recipients.
Outline what pricing tiers, delivery cadences, or other product items are available. Consider offering an initial discount, like 15% off their first three months. Or, in case the gift wasn’t exactly what they needed, showcase what other products or delivery options might be available to encourage customers to stick with you past their gift period. Offering variety is one key strategy to help with retention, as 30% of consumers credited a lack of new experiences as a factor in their decision to cancel a subscription.
Ask for feedback and collect data.
The real power of subscriptions lies in data, and the more you have, the better equipped you are to use it for retention—not just acquisition or growth. Satisfaction surveys and behavioral data can help you learn more about your gift recipients and what types of products, services, or offers are likeliest to keep them subscribed.
Even if you do end up ultimately experiencing churn from customers who were gifted a subscription, try to gain information about why they opted not to renew. Ask users why they are canceling and offer a wide range of options across categories like price, product features, services and more. This information can be essential for future retargeting efforts.
Providing your gift recipients with a superior experience, flexible account management, relevant upgrade offers and more can bring these customers into your subscriber base and increase their lifetime value, turning a gift recipient into a lifelong member.
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What you should do now
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