A subscription-based ecommerce model allows businesses to sell products or services in exchange for regular payments from customers. Customers subscribe for a set period of time and pay at regular intervals, either weekly, monthly or yearly, providing the business with a more stable revenue stream.
The strategy: a question of loyalty
This business model is based on the idea of offering a lower price or a discount to customers who want to subscribe. The ultimate goal is to encourage the customer to remain a subscriber as long as possible. To keep your customers engaged, it is also important to add value on an ongoing basis. For example, you could offer them new products or even additional benefits, such as exclusive discounts and gifts, to reinforce their loyalty to your brand.
What you need to know about subscription-based eCommerce
This type of eCommerce can be an opportunity for many companies to build customer loyalty and increase recurring sales. However, it is important to note that the subscription model can also present considerable challenges.
Here are 5 common mistakes to avoid for any business offering subscriptions:
1. Implement a complicated subscription process
If the subscription process is too complicated, consumers will drop out along the way. So you need to make sure that the subscription process is simple, fast and easy to understand. The path to accessing the subscription should be simplified, as well as the required registration information.
2. Don't offer added value
In order to get your customers to subscribe and stay subscribed, it is important to offer them added value, beyond standard products or services. You need to focus on creating a unique and satisfying experience for customers to differentiate yourself from the competition. If they don't get any additional benefit, they may decide to end their subscription or switch to a company offering a comparable product or service to yours.
3. Ignore customer feedback
Your customers' feedback is valuable in understanding the strengths and weaknesses of your subscription model. Therefore, you must take the time to collect and respond to your customers' feedback in order to continuously improve their subscription experience and benefit from increased customer loyalty to your brand.
4. Failing to adapt to changing customer needs
Customers' needs can change over time, so it's important to adapt your offering to keep them engaged. Therefore, your company should monitor trends and consumer voices on your platforms to determine if changes are needed to deliver a superior subscription experience.
5. Not monitoring retention rate
Retention rate is a key indicator of a successful subscription model. This rate refers to the proportion of customers who continue to use your products or services over a given period of time. In concrete terms, this KPI will tell you in real time if your products or services are performing well by demonstrating your ability to retain your customers.
Here are different types of successful eCommerce subscriptions:
Monthly box subscription
Customers subscribe to receive a selection of regular products inside a box, such as beauty products, hygiene products, etc. They can vary according to the consumer's tastes and preferences. The main advantages of this type of subscription are the discovery of new products and the convenience of receiving regular products without necessarily having to remember to buy them. However, these subscriptions can be cancelled at any time.
Online training and development subscriptions
Whether it is for personal development or to learn more about a particular field, there are several online training platforms to which it is possible to subscribe for a fixed period of time, in exchange for a fixed fee.
*It is possible to deliver video content on a flexible and customizable training platform with our dvore LMS solution. It can be used for employee training, customer training, or even for selling content on a subscription basis. To learn more, visit our online training solution by clicking here.
Subscription to a delivery service
You can subscribe to a delivery service to receive products on a regular basis, such as pre-prepared meals and groceries, without having to go out and buy them. This subscription usually offers the possibility of receiving exclusive products or special offers reserved for subscribers.
One aspect that must be considered is that it is common for this type of model that consumers only want to subscribe in order to obtain the proposed discount. Thus, they are free to unsubscribe at any time, which compromises the initial strategy, which is to build customer loyalty. You must be aware of the risk of this strategy and question its real sustainability.
Effective advice to minimize this risk
Try to find an effective way to encourage their long-term commitment, while adding value in the short term, on an ongoing basis. For example, you could create a loyalty system. Offer rewards to subscribers who remain loyal, such as free boxes or discounts on selected products. This strategy will encourage your customers to remain loyal to your brand.