There are many types of subscription models that ecommerce businesses use to generate recurring revenue. One of the most popular is recurring replenishment, specifically, the recurring products model.
Recurring subscriptions deliver your products on a regular interval of the customer’s choice. That being said, there’s still room to get creative.
Look at Dollar Shave Club. If you haven't seen the viral video they used to launch their subscription shaving razor company, take two minutes and enjoy:
This low-budget commercial racked up 4.75 million views in four months and 12,000 orders in 48 hours, setting the company on its path to their billion dollar exit.
Let's learn more about how you can use the Recurring Products subscription model to build your own success story.
Recurring Products
Did you know that 32% of all subscription purchases are recurring products? If you're selling a product that is consumable (like chocolate) or or runs out (like lotion), it makes sense to give customers the option to have it automatically replaced. This is especially useful for beauty and skincare products, where customers tend to pick a brand they like and stick with it. It can also work well for coffee, vitamins, food and beverages.
Recurring revenue is attractive for both business owners and investors because it allows you to better forecast income and lock in prepaid purchases. The trick is getting people to take the leap from one-time buyer to subscriber. Many stores offer a discount to customers when they subscribe, simply because recurring revenue is so valuable.
Amazon’s Subscribe & Save is a well-known example. The most effective way to let people know that subscribing is an option is to build it right into the product page, either in a custom widget, or right into the dropdown menu under quantity. With Bold Subscriptions you can also change the default quantity selection on a product page to ‘Subscribe’ — just make sure it’s easy to change to a one-time purchase.
Benefits
- It’s a simple way to start offering your products as subscriptions.
- When customers subscribe, they end up spending more in the long run compared to one-time purchases.
- It can help you determine which products are performing well to guide expansion of your subscription offering.
- If you are buying supplies or fresh ingredients to make your products to makes it easier to forecast your costs.
Opportunities
The number one challenge of a recurring product subscription is you could be leaving money on the table by letting customers subscribe to just one product. Look for ways to turn them into your most valuable customer group — or even advocates:
- Use strategic upsells and bundles to get customers to make their subscription bigger and better.
- Upsell current subscribers by email, or by putting coupons in their deliveries.
- Give them a discount or other incentive if they successfully recommend the subscription to a friend.
- Offer them the option to edit future deliveries so they can easily add more to their next order.
Let's look at some use cases with real life examples to back them up!
3 real-life examples of how to sell recurring products
Recurring products promotions are simple to set up and have tons of potential to get creative and think outside the box. Use these ideas to enhance your subscription to onboard customers, retain them, while increasing AOV.
1. Upsell and cross-sell complementary products and subscriptions
What is the difference between an upsell and cross-sell. It's pretty simple. Upselling is an offer that tries to get the customer to increase the size of their order by accepting a larger or better version of the item they are interested in.
Here's an upsell expample: a customer is about to checkout a 250 ml bottle of face cleanser for $9.99/month. Surprise — an offer pops up telling them they can get a 500 ml bottle for $14.99/month instead. It's the same subscription product, but a much better value price. The customer is happy and the merchant increases the order of the value. It's a win-win!
A cross-sell is a type of upsell, but refers to an offer that suggests complementary items to go with their purchase. For example, before the customer checks out their face cleanser subscription, a pop up offers them a package of cleansing wipes for just $4.99/month. Any good cross-sell should offer a complementary product that would organically be purchased along with the original purchase.
Another approach that many companies use is upselling the subscription itself. For example, “subscribe and save 10% on your order.” Let's look at a real example from Brick House Nutrition.
In addition to offering a “free gift” with subscription, they use an upsell discount to incentivize the customer to buy a subscription instead of just one product.
Customers who love the product and use it regularly will have no problem subscribing to get that extra 10% off.
2. Bundle products together to increase AOV
Product bundling is one of the oldest sales tricks in the book.
This involves offering products in a bundle for a discounted price. Here's an example: grouping four bath and soap products that would normally cost $107.99 if bought individually, and selling it as a “Bath Bundle” for $79.99.
The idea is that the merchant sells multiple products for a lower price in exchange for increasing the customers overall value order.
Many companies try to sell bundles as subscriptions to lock in a higher price-point on customers recurring revenue purchase. Spoiled cosmetics do a nice job selling bundled products as a subscription with their spoiled lips monthly club.
Rather than subscribing to one product, customers are invited to pick from one of many monthly lipstick clubs. This is a great way to increase the average order value while offering loyal customers a little bit of extra value.
3. Create an attractive onboarding experience
Onboarding refers to the entire process of getting a customer signed up for your subscription product.
This can include a quiz or questionnaire, or a series of questions about the product they are looking to purchase.
If you are selling coffee, you might ask them for whether they are looking for beans or ground, to specify the type of grind they like, the amount they are looking for, and how often they would like to receive their coffee.
A good, smooth onboarding experience should feel more like a conversation, the kind you might have with a friendly shop owner in a brick-and-mortar store. If there's too much information or too many questions, it can feel overwhelming. An onboarding flow that moves too quickly to the checkout can cause customers to abandon their cart.
Great onboarding requires a balance of flow, asking the right questions at the right time, and not being afraid to get a little creative. Onboarding is also an opportunity to create a fun shopping experience, and make the customer feel extra special.
Raw Coffee Company does a great job of walking the customer step-by-step through their coffee subscription onboarding process.
Eye-catching design, loads of white space, and and fun-to-follow 5-step flow make this onboarding process easy and enjoyable. You wouldn't skimp on quality when it comes to your product, so make sure your onboarding process is just as smooth.
Take your recurring product business to the next level
Upselling or cross-selling, using bundles to increase average order value, or optimizing your onboarding flow are just a few of the strategies you can implement to your subscription product to make it more successful.
Want to learn more about the 7 types of subscription models?
Check out our free ebook, 7 Subscription Models to Master.
Hopefully you picked up some tips and tricks you can apply to your own subscription product, or are feeling inspired to add a subscription option to your Shopify store. Download our free ebook and get a free trial of Bold Subscriptions for 100 days.
Have a question or idea about subscriptions you'd like to share? Leave a comment below and we'll be sure to respond. Thanks for reading!
This article originally appeared in the Bold Commerce blog and has been published here with permission.
