One of the truisms in marketing is the value of customer retention. Yes, new customers are exciting, essential, and grab attention. But existing customers buy more often, spend more, refer more and cost less to serve than newer customers.
This holds regardless of the mode (ecommerce vs. brick-and-mortar) of purchase. After all, cost-per-acquisition (CPA) keeps rising as the digital landscape grows more competitive. To lower the CPA, brands across categories are setting their sights on subscriptions.
Subscriptions, which encourage ongoing engagement and consistent purchases, bring value. When a consumer subscribes to a brand, it creates consistency and continuity. The product shows up at their door or in their inbox almost magically and without thought. It’s one less thing for consumers to worry about.
This ease of access drives shopper satisfaction. Plus, because shoppers receive products regularly and on their preferred schedule, the brand remains top of mind. Subscription services cover and exceed the CPA. They also provide retailers with monthly recurring revenue (MRR). Furthermore, a subscription guarantees a relationship and secures customer retention.
Some direct-to-consumer (DTC) brands from a range of product categories have thriving subscription models. Let’s look at a few who are doing it right.
The Honest Company
Founded by Jessica Alba, the mission-driven consumer products company focuses on eco-friendly, safe and effective baby, personal care and beauty products.
The Honest Company offers two subscription options, including one geared to parents entitled the Diapers & Wipes Bundle. The explanation on the company’s website makes it clear the subscription will lead to ease and convenience, with a shoppers’ favorite products delivered “direct to your door on a schedule that works best for you.”
By giving busy parents a feeling of certainty (no more running out of key baby products), the brand is building loyalty. In addition, the subscription helps The Honest Company to become part of the lives of their target customers and meet other needs in current and future stages of their lives.
Bark is the maker of BarkBox, a monthly themed subscription service providing all-natural treats and clever toys for dogs. The company also provides dog products, services and experiences. BarkBox is a web-only subscription box.
Customers have three subscription options: one month, six months or 12 months. As part of the subscription process, customers create an online profile about their dog.
While what’s included in a BarkBox is standardized, the contents themselves are personalized based on the answers given about the dog while subscribing. Plus, each month has a different theme. The products are of a high quality, and there’s a money-back guarantee if a consumers’ dog doesn’t like every item in the box.
Pet owners love seeing their pets happy, and Bark is clearly on the same page. Their care for a consumer’s beloved pet inspires loyalty and drives customer retention.
FabFitFun is a lifestyle membership whose flagship product is the FabFitFun box. The box includes a selection of full-size products across beauty, fashion, fitness, wellness, home and tech – delivered each season. Subscribers can get curated selections from the team of tastemakers or customize their options.
FabFitFun box subscriptions can be either for one season or for a full year (four boxes in a year). All members – seasonal or yearly – also receive access to supporting digital content (FabFitFunTV and a magazine), the FabFitFun online Community, and members-only shopping experiences.
The box introduces the audience to brands and brings them to the ecommerce section of FabFitFun’s website which drives sales of future purchases. Plus, subscribers can easily add on products for a discount.
Lessons from Brands Doing Subscriptions Right
These three DTC brands are winning at subscriptions and offer four lessons that you can use.
- Offer a quick and easy registration process that still enables product personalization;
- Include products that excite your consumer and make their lives easier;
- Have multiple options for subscriptions and allow consumers to switch options; and
- Allow consumers to customize their subscription.
In the new era of ecommerce, retention and loyalty are top of mind. See the brands we have on tap to share their success stories at the Internet Retailer Conference & Expo (IRCE). Hear business leaders from Aisling Organics, Jane, Neighborhood Goods and others about how they’re embracing cutting-edge technology, curation and experience best practices to drive customer engagement, loyalty and long-term revenue.