Leading subscription brands recognize how integral it can be to develop strategies to boost conversions. A question these brands often ask themselves is “How can we convert one-time transactional shoppers to loyal members?”
To thrive in the competitive ecommerce space, subscription brands should be diligent in how they layer protocols and processes designed to increase their conversion rates. There is no one-size-fits-all approach, which makes conversion such a challenging area to optimize.
Thanks to advice shared by Fresh Patch founder and president Andrew Feld, we’ve curated insightful recommendations on designing your site and establishing marketing projects built to encourage more shoppers to sign up as members.
We shouldn’t get ahead of ourselves. Let’s first understand the model of each type of subscription format and what value they each offer to customers.
Find the subscription framework ideal for your product
It's worth noting, not any one ecommerce subscription model is one-size-fits-all for business. Consider the various subscription approaches that could encourage your site visitors to move away from a one-off purchase into becoming a recurring shopper.
Replenishment (aka subscribe and save)
Replenishment subscriptions allow for the automatic purchasing of products on an ongoing basis and subscribers save a certain percentage on each purchase. Replenishment subscriptions enjoy higher retention rates than other subscription models. As a McKinsey report cites: 45% of those subscribing to replenishment products have subscribed for at least one year, about 10 percentage points higher than for curated or access subscriptions.
Also, replenishment services have a higher conversion rate than curation or access services (65%, 52%, and 51%, respectively).
Fresh Patch, which sells grass pads for training domestic pets, offers a 5% discount at checkout when shoppers are about to purchase a grass pad. Feld says shoppers coming to his company, a Bold Commerce partner, see value in not worrying about making orders every two weeks, say, and instead prefer discounted grass pads arriving regularly.
He adds how brands can take advantage of momentum ripping throughout their sector. “We’ve seen how the pet industry has been booming the last few years,” Feld says, “and our growth has definitely been like a J-curve.”
A replenishment model can convert shoppers by:
- Implementing a simple solution they can easily grasp.
- Revealing to them that they will know what to expect, and they can take comfort in that consistency.
- Enticing them on price savings they might not be able to get elsewhere.
The curation model delivers a selected variety of products or services to subscribers that are personalized based on subscriber’s stated preferences and/or informed by data analytics, such as purchase history.
By developing this long-term relationship with customers, brands have the opportunity to get to know their needs better and understand their preferences through first-party data. Surveys and questionnaires can glean that data from customers in order to create customized boxes, most commonly found among meal kit businesses such as Goodfood.
Birchbox, a Bold Commerce partner, brings that curatorial flow to their site, as they ask new visitors questions about their pet’s physical details and behavioural habits, with the goal of curating an ideal box for each customer.
A curation model can convert shoppers by:
- Providing a personalized experience focused on a customer’s needs.
- Surprising and delighting subscribers to keep them engaged, opening the door to deepen their connection to the brand.
- Subscribers are willing to offer more information on their needs and preferences, which results in more tailored offerings, building an ongoing cycle of customer feedback and curated deliveries.
With this subscription model, customers subscribe, and then gain access to exclusive products, services, educational materials, and experts. All content is highly personalized, strengthening the connection between the customer and the brand. Upselling on higher-level tiers of access is common in this model, allowing for potential to maximize customer lifetime value.
Powered by Bold Subscriptions, Badass Beard offers subscriptions for their tame-your-mane products through an access lens: subscribers can be chosen to be product testers, and they enjoy discounts at partner businesses, such as apparel companies and coffee businesses.
An access model can convert shoppers by:
- Working towards building a community of advocates, not customers, and allowing word-of-mouth marketing to encourage more customers to sign up.
- Incentivizing customers with promotions and access to services that likens them to VIP members, and further cementing brand loyalty. Adding perceived value by not just focusing on commodity acquisition of a product.
“When you are dealing in subscription model products, as opposed to more transactional or episodic ones, you have an obligation both to get to know your customer because you have to have a relationship for a long time, and to serve them in a way that is trustworthy,” says Robbie Kellman Baxter, author of The Membership Economy.
Now that you’re informed of the various paths to go down with your subscription business, here are some strategies you can implement to help increase your conversions.
Best Practices: Building personalized site flows
There are a few reasons behind the rise of Fresh Patch’s conversion rate, now hovering close to 4% after first gaining subscribers at around a 2% rate. Feld credits his various site flows, and one leveraging customization, as one factor into their success in converting transactional shoppers to subscribers.
With one path leading shoppers to purchase an item and take advantage of the subscribe and save offer, Fresh Patch also has features a “Get Started” button to navigate customers through the process of purchasing an ideal product for their pet dog, cat or rabbit.
“We’ve seen a lot of value in building out that hand-holding process,” Feld says, “and we’ve seen a lot of new traffic divert through that funnel.”
Fresh Patch’s emphasis on personalization reflects a burgeoning trend among many subscription brands, some of whom extend their customer surveys to impressive lengths in order to gather relevant first-party data and better serve customized offers to shoppers.
For example, personalized makeup business Ipsy asks new visitors more than 12 questions about their skincare needs, such as skin color, eye color, hair type, skin concerns, comfortability with makeup, favorite cosmetic brands, etc. Then Ipsy curates a box of cosmetic brands in tune with the answers to those questions.
Personalization shouldn’t be seen as an add-on but a must-have. A 2019 global survey of 3,000 consumers reported that two-thirds of them expect personalization as a standard of service and believe they are recognized as an individual when sent special offers. Also, a separate survey found that three-quarters of customers feel frustrated when website content is not personalized.
Best Practices: Consistent email marketing campaigns
If there’s one area that Feld wishes he would’ve adopted earlier in Fresh Patch’s 12-year journey, it’s email marketing. “We’re now two years into developing and using that database of emails, but we should’ve done it sooner. We left money on the table,” he admits, stressing a key insight for subscription brands: don’t delay on important marketing strategies.
Marketers see email marketing as a vital way to recapture customers that may have not completed a transaction or fully joined as a member. It’s another key strategy to combat cart abandonment.
In a survey, 78% of marketers in 2020 said email is important to overall company success, compared to 71% in 2019. Also, 74% of Baby Boomers think email is the most personal channel to receive communications from brands, followed by 72% of Gen X, 64% of Millennials, and 60% of Gen Z.
At Fresh Patch, they use email marketing to remind transactional shoppers about the savings they can incur by subscribing to the business, while also ensuring that messaging appears on packaging. It’s part of an overall outlook focused on gentle reminders about Fresh Patch’s subscription options, and Feld says it was important not to overdo it with too many emails that some customers would be view as spammy.
Best practices: Optimizing the speed of your mobile site
One area subscription brands shouldn’t neglect is the performance of their mobile site. Customers have come to expect a frictionless and fast experience when they purchase products and sign up for memberships online.
“Make sure your customer journey is optimized for the mobile experience. We’ve all been to mobile sites where something wonky happened and we begin to second-guess purchasing from that brand.”
Once your dev teams has ensured the mobile site functions well, testing performance speeds is recommended. An expert product manager suggests analyzing “what page-speed gives the optimal conversion to next page. In other words, what page-speed do we get the most percentage of customers from the page where we are trying to improve performance on, to the next page in the site flow.
If your analytics tools aren't up to the task to help with this, industry research have suggested that 3 seconds is a typical tipping point for the majority of users to abandon a page.”
Even a fractional improvement can reap benefits. A Deloitte study found that a 0.1 second improvement in site speed resulted in retail consumers spending almost 10% more, and an increase of page views of 8% among luxury brandThe future of successful subscription programs will be brightest for those brands that personalize their offers and cultivate strong relationships with their community. Once that becomes the norm for the brand, they can watch their conversion rates soar.
Stay tuned for our third instalment, where we’ll discuss how to foster long-term relationships with customers by adopting and actioning a membership mindset.