The Future of Subscription Commerce

Themed subscription boxes like Birchbox, which ships a personalized box of beauty products, or MeUndies, which sends a set of designer underwear, are monthly bundles selling exciting niche products delivered to your door. But what about every day items like toothpaste, toilet paper, and shampoo? Herein lies the biggest subscription commerce opportunity.

First mover advantage is open to companies who make everyday shopping hassle free. Anecdotally, let’s assume that most consumers purchase food, moisturizer, shampoo, etc. from the same store, at predictable intervals. Further, let’s assume most shoppers resent having to repeat this mundane behavior. A simple service that automates ‘the essentials’ would be compelling in today’s burgeoning sub-commerce landscape.

Here are a few key components of setting up the subscription model from scratch:


An online presence

Numerous beauty, pet supply, and hobby retailers are selling product online with devoted customers. These companies have an advantage, having already carved out their brand presence. New businesses on the other hand, will require a robust marketing strategy to get customers in the door. Presale campaigns, media buys, PR, and direct mail are all important aspects in getting people aware of a new offering.


A subscription option at checkout

This is a simple step in the set up process, as companies who already use Shopify, Cratejoy, or ScriberBase as a subscription manager can easily create a subscription service option for their customers. Making the checkout options conspicuous helps to avoid confusion so customers don’t confuse a one-time purchase with a recurring one.


A reliable fulfillment solution

This is perhaps the single greatest challenge for most companies setting up a subscription model. Building a rhythm in concert with a fulfillment partner can be tough. Further, a reliable CRM system that automates the delivery of orders to the fulfillment house can avoid major logistical headaches and customer service issues. Customers expect merchants to deliver products soon after purchase. The longer the delay the more unhappy the customer is. Talk to your fulfillment partner about their capabilities to ensure they’re a good fit.


Scalability through Customer Service

Sound odd? It isn’t. A-players in the subscription space have incredible customer service. They make it easy for customers to reach them by email, phone, and chat. And, yes, they have real human beings answering the phones! No avoidance, no long delays, and no black holes when sending an email to the support department. From an ROI perspective, customer retention is key to the long-term success of a subscription service. Happy customers are long-term customers who remain loyal. So, while real estate agents rhyme off “location, location, location”, sub-commerce experts sing a similar tune: “retention, retention, retention”.


Managing recurring payments

Not all revenue is created equal. A subscription order is significantly more valuable than a single order. However, there are still challenges in dealing with recurring payments. Having a robust payment processor goes a long way! Keep a close relationship with your payment processor and ensure they have experience onboarding subscription merchants with similar billing models. This can help avoid high processing fees, billing errors and withholdings (or reserves).

What does it take to start a subscription business?

All the tools you need to start up a subscription business are available to you. Contact us to get started on your new business today!

What you need to start a subscription business.

It’s no surprise you’re looking to start a subscription business. They’re trendy, they’re profitable, and among the hottest start up models right now.
The re-emergence of subscription commerce has resulted in the birth of services that make it easy to start a subscription business model.


So what does it take to start up a monthly subscription business?

  • A Unique Idea
  • A Purpose
  • Your Customer
  • Financial & Operating Plan
  • Marketing Plan

Unique Idea

A subscription business idea can be within a category that already exists. It’s the execution, purpose, presentation, and even niche that can make your subscription business model unique. For example, a monthly book subscription service does exist, but your offering could be catchy simply by choosing books with specific genres, or themes. Be creative, bold, fun, and offer unique value in the information, experience, or branding of your offer.

Purpose

You need to know what purpose your business serves to create a satisfied consumer. The subscriber business model relies on repeat customers. Being consistent with your purpose and your brand will help to foster a genuine connection with customers that will keep them onboard as loyal subscribers. Loyalty is a key metric, as you want your customers to stay on board month over month.

Customer

Before you even decide what you’ll be putting in your subscription, you need to know who your subscriber is. A strong understanding of your customers will give insights into what products make sense to attract new subscribers, while retaining existing ones.

Once you have your ideal customer established, you need to figure out how you are going to “take care” of them. Customer Relationship Management tools (often referred to as CRM systems) and Call Centers are a great way of managing your customers. These tools open up two-way communication for feedback, satisfaction benchmarking, and brand advocacy.

Financing and Operating Plan

The management of financing and operating a new subscription commerce model is where most start-ups hit a wall. There is a lot to consider! How much to charge, how to source product, how to budget, how to ship, how to bill, etc. With all the moving parts things can appear complicated. But don’t fret! There are some great tools out there.

For example, taking advantage of specific outsourced shipping and payment services means not only having the process simplified, but also having your operations consolidated. In other words, many outsourced billing and shipping providers can be integrated into a centralized hub. This migration of operating functions can simplify the process and remove some big barriers.

Marketing Plan

Great. You’ve got your idea, your purpose, you know your customer, and you even have all the financial details covered – how is anyone going to know about your product?

Launch. The pre-launch phase of your new monthly subscription business is one of the most important stages for your start up. In this phase you need to build awareness and generate interest. Presale campaigns, media buys, PR, and direct mail can all be important aspects in getting people aware of your launch. Think about your marketing budget, and begin split testing some channels. Remember, you can always tweak as you go. The important thing is to get started.

Remarketing. Oftentimes, start up sub-commerce businesses will put most of the emphasis on the launch. The result is an empty remarketing tank.  Plan for remarketing.  After launch you will want marketing funds leftover for analysis to adjust and optimize campaigns.

What Does it Take to Start a Subscription Business?

All the tools you need to start up a subscription business are available to you. With a bit of passion and a great idea you have everything you need. Contact us to get started on your new business today!

Move Forward or Get Left Behind – The ScriberBase Whitepaper

For more information on the benefits of Subscription Commerce, download the Whitepaper written by ScriberBase founder Adam Levinter.

Learn how leveraging this powerful recurring revenue model has firmly established multi-million dollar brands like Netflix and Dollar Shave Club. Adam discusses the evolution of the Subscription Commerce industry, and how large-cap companies like Microsoft effectively utilize this business strategy. Discover how subscription services can add value to your business, and create a more valuable experience for your customer base. Download the Whitepaper to learn more.

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