Subscription strategies… Many of Fortune Magazine’s Top 500 enterprises (and subscription websites) are implementing them to provide a more sustainable business model, but what exactly is a subscription strategy?
And can small or medium-sized enterprises utilize these strategies for themselves? The short answer is yes. Companies of any size can use a subscription strategy to achieve massive success.
But let’s first define what a subscription strategy is.
What Is A Subscription Strategy?
A subscription strategy is a business or marketing plan that aims to keep rebilling customers over time for continued service or additional products. The goal is to keep acquired customers buying on a regular basis through some sort of regular ongoing agreement, thereby maximizing revenue and profitability.
Economically speaking, retaining customers is cheaper than acquiring customers, so billing existing customers on an ongoing basis is much more profitable than attracting and selling to new customers on a one time basis. Being able to sell subscription products is entirely different from one-time purchases.
When strategizing about selling a subscription product, your aim needs to be focused on building a long-term relationship with consumers. At the core of developing your strategy is selling your customers on the intrinsic values of what makes your subscription product worth investing in repeatedly.
It’s worth considering how others are doing this successfully. For instance, what is the subscription strategy for the Dollar Shave Club? The answer is that they consistently deliver on the promise that customers can subscribe to a convenient service of receiving simple, elegant, and premium shaving products.
To ensure your subscription strategy works, you need to understand your target demographic. Whether you conduct your own market research, purchase market research, or have worked in the industry for several years, you must understand what makes them tick.
Once you know your audience, it’s time to adopt three insights into your subscription strategy:
- Educate Customers About Your Company’s Proposition
Your target demographic must understand what you’re selling them. Enticing potential clients via a free trial is an example of allowing potential clients to learn about the value of your product.
Building a paywall that blocks new users from using your subscription service completely alienates potential clients from experiencing or understanding your product.
- Be Consistent With Value And Measure It!
Business owners will follow two metrics closely when adopting a subscription business model.
The first is the engagement from your subscribers when they are informed of or have received your product. Examples would be either a click-through rate on emails or a client leaving a positive review on a product listing.
The second metric is subscriber loyalty, which is how long they’ve been signed up for your service or if they’ve recommended your product publicly online.
Ensuring these metrics are positive is essential, as the modern world is filled with distractions, and even retaining the attention of a loyal customer can be a challenge.
To retain their attention, you must consistently deliver on your consumer promise to meet your subscriber’s expectations. This will ensure they stay with your business.
And while monitoring the positive feedback, make sure to be transparent about it. Sharing positive reviews, measurements, and metrics (e.g., how many more subscribers have signed on to your service) reminds your customers that they’ve made the right choice to stay with you.
However, there’s a difference between being consistent and stagnant.
- Prioritize Being At The Cutting Edge
Continuous innovation is critical to retain your subscribers. There are very few things that can’t be improved upon.
An example of continuous innovation is updating online assets. Building up the content that will live on your site takes time, but content creation is an ongoing and fluid process nowadays.
You need to keep innovating and improving users’ experiences. Running tests about upload speeds, Google rankings, and more need to be done daily. And old content should constantly be updated.
And always be informed about new developments in your sector, and even share this information with your subscribers.
Now that we’ve answered the question of what is a subscription strategy, we encourage you to adopt them and venture out successfully.