- Author By Miva |
- Posted on
The explosive popularity of the subscription revenue model has prompted many online merchants to consider offering a subscription service. A monthly subscription business strategy can skyrocket customer lifetime value by turning one-time or occasional buyers into subscribers. But getting one off the ground comes with a unique set of challenges. The following are a few things you should think about before starting a subscription service.
What are your goals?
Before you set up a subscription service, you should define your objectives and motivations for doing so. Do you want to attract a new market? Looking to add a new revenue stream? Are you hoping to reduce purchase friction by automating the reorder process? Your goals will help determine how you design, promote, and measure the success of a new subscription program.
What customer needs are you addressing?
Ask yourself why a customer would want to become a subscriber. Would they be motivated by convenience, reduced cost, or both? Are they signing up to “set it and forget it” or for a curated product experience? Knowing what your customers need is crucial to the subscription creation process and can assist you in deciding which products, services, and solutions you focus on.
How are you going to market it?
Once you know what your customers need, how will you let them know you have the solution? Will you use your current channels to announce the subscription option or branch out to attract new markets? Subscription models tend to be popular among Millennials, so you might need to change up your current marketing strategy to focus on their preferred media and watering holes. A good value statement for your subscription service will provide an excellent starting point for your marketing efforts.
Can your processes scale to handle it?
Do you plan to offer unique, curated boxes each month? You’ll need to reallocate time to accommodate this or hire additional personnel. Is your inventory management process ready to handle automatic reordering? Automatic reordering can put significant strain on a fulfillment structure designed for irregular orders. Launching a new subscription service can take up a lot of time and strain your existing resources. Before you can start offering subscription options, take stock of your resources and processes. Some adjustments may need to be necessary to ensure scalability.
Can your eCommerce platform handle it?
If your eCommerce platform doesn’t come equipped with the ability to offer a subscription option on every product, you might hit a few snags when it comes to launching a new service. A subscription-enabling plugin might suffice, but these can come with a host of stability and reliability issues and end up being more trouble than they’re worth. Make sure your platform is robust enough to handle your new subscription service…and any others you hope to launch down the line.
Looking for more ways to increase revenue and customer lifetime value? See how Plant Therapy doubled their revenue in our webinar, Plant Therapy’s Journey to eCommerce Success.