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Three Steps To Follow When Evaluating Launching A Subscription Offering

three-steps-to-follow-when-evaluating-launching-a-subscription-offering

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Adding subscriptions to your Shopify ecommerce store can be a great way to generate profitable growth for your business without needing to spend an immense amount of time and effort. And while the process of adding a subscription product to your store may be relatively straightforward, it is best to properly plan a subscription strategy for your business before you just “go live” with a subscription offering. 

The brands that have lasting success with subscriptions understand their business holistically and are not just introducing subscriptions for the sake of offering something new. They are launching subscriptions with the mindset that their new subscription offering is going to take their business to the next level. This takes careful planning and developing a subscription strategy that is built for the long-term.

In this piece, we will take you through the best ways to prepare your brand for launching a successful subscription strategy. Taking the time upfront to understand the types of subscription products to offer and understanding how your customers would react to a subscription offering will be the difference between a successful and unsuccessful subscription business. Read on to learn about the three steps that you should follow when considering launching a subscription offering. 

Step 1: Understand key metrics to know if subscriptions are a right fit for your brand 

While it’s easy to read stats like ecommerce brands that offer subscriptions grow 26% faster and are 14% more profitable than those brands that don’t offer subscriptions and get excited, simply offering subscriptions is not enough. If your brand doesn’t generate a lot of repeat purchases or you decide to launch subscriptions with a product that doesn’t cater well to subscriptions to begin with, then your subscription business is doomed from the start. 

In an effort to put your best foot forward and set your subscription business up for success from the outset, dive deep into your ecommerce businesses metrics. Particularly, you’ll want to understand key metrics as they relate to the introduction of subscriptions. The types of metrics that you’ll want to understand are:

  • What are your most popular products? 
  • Are there certain products that your customers are reordering more than others? 
  • What percent of your customers are repeat customers?
  • What is the average number of days between purchases for repeat customers

Ecommerce growth

Knowing the answers to these questions is just a starting point. After you are able to get the answers to these questions, you’ll want to objectively examine them to understand if subscriptions make sense for your brand based on the findings. For example, if you discover  that only 2% of your customers are repeat customers and of those repeat customers, they repurchase from you once a year then that is a strong indicator that your brand is likely not cut out for subscriptions. However, if you find out that 20% of your customers are repeat customers and these customers repurchase from you on average once every 30 days, then that’s a strong indication that your brand is a good fit for subscriptions. 

Taking the time to dive into your businesses metrics is a key part of the evaluation process of evaluating adding a subscriptions offering for your brand. This should be the first and likely most important step of the evaluation process.

Step 2: Interview your current customers about subscriptions 

So you took the time to dive into your ecommerce stores metrics and the findings indicated that your brand would be a fit for a subscription offering. Now that you have the quantitative data to support adding subscriptions to your brands offering, it’s important to capture the qualitative data to support adding a subscription offering by talking to your current customers about a potential subscription offering. 

Taking the time to understand what your current customers would want and need in a subscription offering will help to not only provide a strong foundation for initially subscription business, but will ensure that it is around for the long-run. By building a subscription program that your customers actually want, you will have a leg up on your competition and it will be more likely that your customers will turn into loyal subscribers which in turn will help give your brand serious staying power. 

In order to get your customers to talk to you about a subscription program, perhaps offer them a discount off of a future order. Prior to getting your customers to talk to you, develop a list of carefully crafted questions that ask them about what they would want in a potential subscription program offering. Examples of these types of questions include:

  • Would you be interested in a subscription offering? And if so, what would you be looking for in one? 
  • How often would you want to receive shipments in a subscription offering? 
  • What would be a valuable benefit for you if you were to become a subscriber? 
  • What are some challenges that you would see if you were to become a subscriber? 
  • What would be some benefits for you if you were to subscribe to my brand? 

Having the answers to these questions from 15-20 of your current customers would really not only help you understand your customers better, but would also help you craft a powerful subscription program that your customers not only want but one that they would be less likely to churn from. Talking to this many customers may take time, but it is time well spent because these customers will be helping you build a subscription program that helps you drive profitable growth

Step 3: Set live a easy “reorder” solution to test your customers appetite for subscriptions

Let’s say that at this point you have both the quantitative and qualitative data to support launching a subscription offering but still want to be 100% sure that your customers will respond well to subscriptions prior to launching your program. You can do a “trial” run of sorts and see how your current repeat customers respond to being able to reorder from you in a single click

Make it easy for your logged in customers to reorder from you through the “my account” page or send them email or sms notifications that it’s time for them to reorder. See how many of these customers actually respond around the reminder for them to reorder. If you find out that a large percentage of them do follow through and place the reorder off of the email or sms reminder, then you will have the data that you need to fully support launching a subscription offering. And on the flip side of the spectrum, if you don’t see a large number of your customers reordering from you off of the notifications reach out to them and ask why they aren’t reordering. 

Single click reorder

Having this type of data can further help you refine your subscription offering; either by helping to determine the cadence of subscription offering or by helping to determine a potential discount that you should be offering to get customers to commit to becoming a subscriber. 

As we’ve outlined above, in order to have the most success with your subscription offering, you should take the time to carefully understand your business and your customers’ wants and needs prior to launching a subscription business. Upscribe will give you the tools that you need to launch and scale your subscription business. If you want to learn more about how Upscribe can help you, schedule a demo with our team today. 

This originally appeared on Upscribe and is made available here to cast a wider net.
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