Why launching or leveraging a subscription offer for Black Friday and Cyber Monday is better than relying on discounts alone.
Limited time discounts. Coupons. Bundled offers. Referral discounts. Strategies to boost Black Friday and Cyber Monday (BFCM) sales are endless. Why? Because they work. According to Shopify, 97% of retailers cite discounting as their top pricing strategy.
This time of the year customers expect to see discounted prices. Some may have been delaying a purchase decision to check the possible Black Friday discounted price. For businesses, the problem with this customer behavior is the Lifetime Value (LTV) of this customer may not justify the discount. You’ve slashed your margins to get the sale and win on volume, but at the end of the day, what’s the percentage of customers that will buy from you at a regular price?
So while it’s undeniable these different kinds of offers can help stores boost sales in the short-term, thinking long term is critical. Adding subscriptions to your BFCM strategy creates the opportunity for a percentage of those increased sales to become recurring and last much longer once the gift-giving season is over.
Why Subscriptions Should be Part of Your Black Friday and Cyber Monday Strategy
With the proliferation of choices that consumers have, it’s hard to purely rely on customer satisfaction with your product to drive repeated sales. That’s why leading brands are driving long-term relationships and recurring revenue through repeated purchases with value-added offerings in a subscription. And it’s working:
- Subscriptions have grown 100% year-over-year since 2011, while the global ecommerce growth rate has been about 20% per year.
- Nearly 60% of Americans have multiple subscriptions. Consumers enjoy the convenience and the membership benefits that come with subscriptions done right.
For brands, the key advantages of focusing on a subscription program this holiday season include:
- Predictable recurring revenue.
- Better inventory management.
- Higher Customer Lifetime Value.
- Lower retention spend.
- Increased return on Customer Acquisition Costs (CAC).
- Closer relationship with customers.
To help you diversify your strategy, and not rely exclusively on discounts and sales this holiday season, here are three ways to take advantage of the biggest selling season of the year with a subscription offer.
- Create subscriber-only offers
This time of the year shoppers are searching for the best deals available. Implementing a subscriber-only offer with exclusive perks can go a long way to securing holiday sales while increasing longevity and lifetime value of subscribers.
Examples of value added offers include early access to new or limited edition products, exclusive access to a specific collection, double reward points, or free shipping.
This kind of offer not only drives new subscribers, but also demonstrates the value of your subscription to existing subscribers, helping to lower churn rates. Subscribers see the advantages of your program beyond the product or service itself.
If you’re new to subscriptions, our ebook 7 Subscriptions Models to Master will help you with detailed definitions, benefits, optimization strategies and real-life examples about all seven models, and how leading businesses are mixing and matching them for the best results.
2. Instead of discounts, offer a free gift with subscription
The free-gift-with-purchase is a sales tactic used to entice and convert buyers. Offering a discount or providing free shipping can sometimes be seen as taking away from the value of the product. The free-gift-with-subscription, though, is used to add value to the subscription program. It encourages customers to buy by providing more for the same price.
Generally, gifts are also exclusive and limited. They are offered as a promotion, meaning that the gift is only offered for a set period of time or “while supplies last.” This is meant to increase the exclusivity and urgency of the promotion that other discounts might not have the ability to do. BFCM is the perfect opportunity to set up a “limited time deal” and create that sense of urgency.
Liquid Death has a cult-like following and has tapped into offering a t-shirt as a gift with subscription as their value-add hook. The new subscribers excitedly rep the brand in their new shirts as part of the Liquid Death community, while the brand avoids product discounting or subscribe-and-save offers to drive new subscription sign ups.
Despite initial concerns that customers might churn out after receiving their free shirt, Liquid Death has seen the effort create increased brand loyalty and a deeper connection with customers. The simple act of giving out an exclusive, branded gift with a subscription actually became a huge driver for their subscription business.
Liquid Death’s free shirt with subscription has proven to be a good strategy for increased brand loyalty.
What kind of free gift could your brand offer to subscribers for BFCM? If you have a coffee subscription, how about a branded mug? For beauty brands, how about a branded mirror or makeup bag?
Whether you’re launching a new subscription program or scaling up your existing one, the free-gift-with-subscription is a great strategy that should be tested at any point in your subscription journey.
3. Create compelling and valuable memberships
Brands are losing customers with every passing year they don’t offer subscriptions. This holiday season will be no exception, in fact it will continue to accelerate as more and more consumers turn to subscriptions as a preferred way to shop.
The best brands are scaling their subscription businesses like never before. The reason is simple. They understand the difference between subscription and membership:
Beyond understanding the difference, leading brands also know how to create extremely compelling and valuable memberships. Subscription should be a component of a membership, but it should never be the only value your customers receive.
If you want to stay ahead of the subscription curve on BFCM, take a step back and think about what your Membership program is all about, and how you can add extra value. Consider a mix of ideas like access to member-only content, exclusive events and groups, special pricing, or exclusive access to products.
A great rule of thumb is the perceived value of your membership should be no less than 3 times the price — ideally more if possible. For example, if your membership is $49.99 a month, and that includes a subscription product, the perceived value to the customer, with all the other benefits you include, should be no less than $150.
This holiday season is going to be great for subscription brands, and subscribers, but not unless you understand how to create a truly valuable Membership program.
Keep track of your voluntary churn rate after the holidays
Here’s the thing about keeping new subscribers after the holidays and beyond: It’s more of a data question than a marketing one. For subscription brands, in our experience, the most effective strategy is to identify churn signals.
Voluntary churn is the percentage of your subscribers who actively cancel or don’t renew their subscription during a given time period.
It’s smart to know why customers stick around, but it’s also key to know why they might leave. Some of those signals might be a sudden drop in email open rate or limited website visits.
But the good news about the holiday season is you can utilize this time period to gather massive amounts of data from your increased traffic, which gives you a more robust picture of your customer habits. With that, you will be able to predict when a customer might be a churn risk, and then adjust your retention strategy.
A lot of customers auto-renew, so focus your efforts on acquiring subscription customers. Once they are loyal customers, reward them by keeping them in the loop about your business, upcoming promotions, and invite them to join you on social media.
For all subscription businesses, detailed and continuous measurement of operational performance is critical to building and executing a strategy that will drive growth and success, determine where to invest, when to invest, and where to cut back. An accurate dataset enables you to make informed strategic decisions that drive your business forward in the right direction.
It’s not too late to leverage your subscription offer this Black Friday and Cyber Monday
Don’t rely exclusively on discounts and sales this holiday season. Start the process of building and nurturing relationships with your audience ahead of time. Your audience will have a genuine connection to your brand and will be far more likely to shop with you than with competitors that lean on heavily discounted items on BFCM as their only strategy.
Whether you’re new to subscriptions, or are on a different subscription solution, we’re ready to help launch or migrate you to Bold Subscriptions, the subscription platform trusted by over 20,000 of the best subscription brands in the world.