Think Tank: Putting the Subscriber First

The subscription box market is booming and consumers are flocking to sign up for a seemingly endless variety of product offerings. In fact, estimates suggest that between 2013 and 2016 the number of monthly visits to subscription service sites increased by 3,000 percent.

Among this sea of subscription box offerings, it can appear challenging to curate a box that will stand out and attract a large subscriber base. This challenge is further complicated by the misconception that more focus should be put on subscriber acquisition. Consequently, often boxes fail because not enough resources were put toward subscriber retention. The key to making the subscription model work is to keep the subscriber first.

Define the model

A fundamental first step in creating a successful subscription box is to define an appropriate model. One such example is a replenish subscription that focuses on fulfilling a customer’s needs. This type of subscription contains commodity items, such as pet food or razors, and the demand for these products plays into the success of the boxes.

Subscribers are drawn to the convenience afforded by automatically receiving essentials, making them less likely to cancel their subscriptions. Despite this convenience factor, cultivating a great product experience is essential to sustaining replenish subscription boxes. The focus should be on building a relationship with the longtime subscribers. Whether it is including a free product sample or enclosing a handwritten note in the next box, creating a unique experience for the dedicated subscribers is essential in extending the long-term value of the box.

Curation subscriptions entail a unique, highly personalized product with an element that will surprise and delight the subscriber. Product examples include splurges, like makeup or workout apparel. This subscription model can be challenging if subscribers perceive the product to be ordinary and not worth the cost. Product fatigue is another threat to the sustainability of a curation subscription.

A subscriber’s need to be surprised and delighted must be satisfied. To reduce churn, subscription boxes should include items that meet the subscribers’ needs and wants and are different offerings every time. Putting the subscriber first should include an amazing, personalized experience and offering a box that reflects the time spent assembling items together.

Maintain your customers

Rather than constantly attracting new subscribers, retention is fundamental to the success of subscription boxes. In the subscription model it is less expensive to retain subscribers than it is to market for new ones. Once a customer decides to purchase, they are subscribed on a reoccurring basis depending on the model.

Where subscription businesses often face difficulties in growing due to high churn rates. Research has found that over one-third of subscribers cancel in less than three months and over half of subscribers cancel within six months. Staying connected to your loyal subscriber base is a great way to maintain your business while tailoring your subscription experience to address their feedback.

Customer Service

To alleviate the challenges of churn, the subscriber experience should extend beyond the products themselves and include quality customer service. Invest in customer service teams that will meet subscriber needs and are not salesy. Subscribers will be quick to cancel if there are issues, especially with curation type boxes. In most cases, curation boxes will lose 25 to 35 percent of subscribers after two months. Customer service representatives should promptly respond if feedback is provided and reach out to subscribers before they cancel. Rather than upselling a subscriber, these representatives should identify other creative ways to maintain subscribers.

For example, if a subscriber would like to cancel because of product fatigue, one solution is to move them from a monthly to quarterly plan. Now the subscriber will only receive four boxes rather than 12, and the subscription company has a retained subscriber and added long-term value.

The option of shifting to a quarterly box plan fulfills two voids. First, switching to a quarterly plan fixes the issue of having too many products. Secondly, a subscriber may cancel because of financial reasons. Rather than paying every month, now they’re only charged every three months. Alternatively, customer service representatives could offer coupons or a discount on the next box if the subscriber was unhappy with what they received. Either way, educating subscribers around other options is key to reducing churn and, most importantly, providing subscribers with a great experience.

To find success within the subscription box industry, it is all about curating the best experience. Whether it is providing subscribers a great experience through customer support or offering products that are personalized and valuable, the end result will be a more long-term, loyal subscriber base.

Chris George of the Subscription Trade Association, or SUBTA, is a serial entrepreneur, who launched his first company when he was 21 years old. In 2014, George cofounded The Gentleman’s Box, a leading subscription in men’s accessories. He has positioned himself as a thought leader in the subscription world, cofounding the first Subscription Box Summit with SUBTA.

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