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The Ultimate Guide to Starting a Subscription Service
December 10, 2018
While a subscription service isn’t the hot, new thing it once was, it can provide huge benefits to both customers and entrepreneurs.
One of the attractions of the subscription model is its accessibility to all kinds of sellers. It doesn’t require enormous capital to get started. Instead, a little hard work, ingenuity, creativity, and hustle can lead to success.
There’s some debate as to whether the trend will have long-term staying power, but sometimes that debate overlooks the fact that these programs are an excellent fit for the modern lifestyle.
As consumers grow more used to the convenience of subscriptions, we believe the market will continue to grow.
There are some major elements to ensuring success with your subscription service. You have to define your product, understand your customers, and eventually, manage your growth.
Table of Contents
First, you should be aware that there are a couple of different subscription models.
Some businesses are focused entirely on subscriptions, while others offer customers the opportunity to make one-time purchases in addition to subscribing.
Typically, startups tend more towards the leaner, subscription-only model, while more established eCommerce stores might incorporate a subscription model into their existing operations (though this isn’t the case in every situation).
One of the first things to consider when starting a subscription program is the focus you want for your offerings.
Some entrepreneurs have found success through semi-frivolous, playfully-minded subscription programs. But, as the field grows more crowded, we recommend looking at ways you can offer real value to your customers.
Even if your boxes are focused on fun, there should be a defensible reason for their existence. Perhaps they offer products that cannot be found elsewhere, or perhaps they speak to an underserved portion of the market.
Because people have so many different subscriptions options, you need to be able to clearly articulate the value your service brings to your customers’ lives.
However, you do not want to invest time and effort into something that doesn’t excite you.
If you’re not enthusiastic about the subscription theme you’re offering, your customers will be able to tell.
One thing every subscription service has going for it is the fact that receiving mail is an emotional experience for everyone. Those emotions are powerful and they help you sell your program.
However, while a customer will get an initial high from subscribing (if you’re doing your job right), it’s important to find ways to “keep the magic” going long term.
A few suggestions include:
Subscription businesses with an entirely practical or emotional focus will have a much steeper hill to climb. It’s important to keep both elements in mind so your subscribers are happy for years to come.
Subscription boxes have been trending for a few years now and no longer attract customers through sheer novelty alone.
They also exist in what is becoming a crowded marketplace. If you’re competing with several other similar programs, you can’t just coast.
However, the perk to this dynamic is that smaller businesses have a decent shot when competing against the big guys. A unique voice, great products, and a lot of work can help you stay competitive.
This can vary widely depending on the product you’re selling.
If it’s something like diapers or toilet paper, there is an exact science to the quantity and frequency you should be sending for each shipment.
If customers end up with a surplus of items, or they’re always running out before the next shipment, they might grow frustrated.
The same is true with subscription services dealing with consumables like coffee and food. To ensure freshness, shipments need to be organized and scheduled with military precision.
When you figure out the schedule that works best, make sure you are communicating it clearly to your customer from the first moment they land on your site. Same goes for your email marketing communications. Don’t inundate, but don’t neglect.
“How often will I get my products?” is certain to be one of their first questions.
When you’re running a subscription program, keeping customers becomes as important as finding new customers.
Because of this, you can’t neglect the needs and desires of your existing subscribers. Understanding your customers is central to any business, and especially for B2C companies.
One way of keeping your customers onboard is by offering rewards based on loyalty. Loyalty rewards can include any number of options:
Be creative! If you make being a subscriber seem unique, fun, and profitable, you’ll keep your customers invested in the experience.
Beware of making customers feel like they’re riding an out-of-control train. They should feel as though they have a hand in their destiny, meaning they can cancel or make adjustments to their subscription when needed.
Some programs like to make it difficult to unsubscribe, however, knowing they can quit easily will create a sense of security that keeps customers around.
Some programs have also done an excellent job creating a community for their subscribers. One of our former clients, Funko, is a great example of how to do this.
Their subscribers are part of an exclusive club. They get to interact with each other, have conversations around their boxes and feel as though they’re part of something special.
When you bring your subscribers into a community, it also means they’re more likely to spread the word about your service in real life and online. A happy customer is one of the best ambassadors for your brand.
Subscription programs have also found success creating gift options that can be sent to family and friends, or offering discounts when a client refers a new subscriber.
Keep in mind that your website needs to be responsive and mobile-friendly. While percentages dictate that the original program sign up will occur on desktop, customers expect to be able to manage their subscriptions on the go.
It’s also important that their experience be engaging. Great design goes a long way toward communicating your value and exciting the customer. Why use a thousand words when the photo will suffice? There are tons of free sources of amazing stock photos online.
This should also go without saying, but it’s also worth mentioning that consistency in product quality is vitally important.
The moment a customer suspects the quality of your products is dropping off, you run a higher risk of losing them.
A subscription program can take off quickly and it’s important that a business plans ahead for growth before launching.
Because subscriptions services are a newer innovation, there is room for creativity in how you choose to shape yours. It isn’t a one-size-fits-all branch within the eCommerce industry.
There are clear benefits to allowing your customers to customize their subscriptions, however, each customization introduces a new range of complexities to your system and process.
In each case, you need to determine whether the benefits are worth the cost. Out-of-the-box subscription plugins don’t always offer exactly what you need and it’s important to recognize that customizations affect each step in your process.
However, customers adore the opportunity to control their experiences and allowing them to, for example, adjust the frequency of their shipments, can be a huge selling point.
A few common customizations:
More so than with normal eCommerce transactions, subscription programs are susceptible to the pitfalls of dealing with expired or changing credit card numbers.
Without a system in place for dealing with this eventuality, you might find yourself scrambling at every cycle to collect new billing information from your subscribers. Make sure your billing schedule is clearly communicated to avoid panicked emails and phone calls.
Consider including customer accounts on your website so your subscribers can easily log in and see when they were last billed, when their next charge will occur, update their billing information, and view or edit other details about their subscription.
It’s never a bad idea to keep your ears to the pulse of the industry. On your way to work, or on your morning jog, you can listen to one of a host of podcasts that feature great insights into the world of eCommerce strategy and marketing hacks.
One of the most challenging aspects of running a subscription program is getting the shipping right.
You will constantly be receiving, packing and sending out products. Depending on your business model, your items could also be different for every cycle.
As we discussed above, attractive packaging is an important element of the subscription model. This makes the shipping process difficult to automate, making you dependent on your warehouse workers.
Testing is vital. Creating a schedule that’s realistic and considers the natural ebb and flow of work that comes with subscription programs will also make everything flow smoothly and keep your workers from pulling their hair out.
Many people start businesses with the intention of keeping clear reports and tracking metrics each step of the way, but once things start getting crazy and the work piles up, those plans can be the first thing to go.
Stay on top of your reporting! This will allow you to understand what is working and adjust quickly when strategies are not successful. Going too far down the wrong path is costlier than redirecting at the first signs of trouble.
For subscription programs to be successful, they need to be scalable. Solutions that work with a small number of subscribers do not always translate once a subscription base has grown.
It’s important to keep one eye on the growth of your company and consider whether you’re getting your customers acclimated to services and products that aren’t sustainable at a larger scale.
Things to keep in mind:
Launching a subscription program, or a new feature for a subscription program, comes with a unique set of technical challenges. Having a developer at hand with deep, technical knowledge is invaluable.
Built Mighty has worked with a number of businesses on their subscription programs. We’ve seen the errors and issues that come up at smaller and larger scales and we know how to create solutions that automate processes, saving you time and allowing you to grow.
If you’re looking for a web development partner to help iron out the bugs and get your subscription program purring, send us a note at [email protected].
Your team is about to get a whole lot mightier.
If it sounds like we might be a good fit, send us a message. We’ll get back to you within 24 hours. And then we can hit the ground running.