Launch a successful subscription program by understanding customer needs and focusing on consumables that provide convenience. This episode from Matt Holman of QPilot reveals the strategies to counter "subscription fatigue" and build recurring revenue through tailored offerings. Learn how to identify product opportunities and refine your value proposition to foster long-term customer relationships.
Key takeaways
Identify 'consumable' products that customers buy regularly, like pet food or supplements, as these are ideal for subscription models due to convenience and time-saving for the customer.
Before launching, deeply understand your target customer: their current purchasing habits, unmet needs, and what value proposition your subscription can offer that competitors don't.
Differentiate between "membership" subscriptions (like Amazon Prime perks) and "automatic repeat purchase" subscriptions (like monthly boxes) to correctly position your offering and manage customer expectations.
Address "subscription fatigue" by ensuring your service genuinely adds value and convenience, rather than just being another recurring charge for products easily found elsewhere.
Leverage subscriptions to not only generate recurring revenue but also to build closer, more durable relationships with your customer base by consistently providing value and convenience.
In this week's podcast, we talked to Matthew Holman from Qpilot about how to run a successful Subscription scheme.
What is an eCommerce subscription
Subscriptions are a part of eCommerce, which is experiencing strong growth. A four or five-fold increase is expected over the next few years.
There are two main types of eCommerce subscription Membership subscription, i.e. giving discounts and deals, e.g. Amazon Prime
Automatic repeat purchases of physical goods, e.g. monthly subscription box Many subscription services have been launched recently, and some commentators have suggested that subscription fatigue is setting in. However, if you can get it right, a subscription service will generate recurring revenue and help form a close relationship with your customers.
What kinds of products do subscriptions work best for?
Subscriptions are typically used for consumables, i.e. things which are used regularly e.g. Fresh food
Food supplements
Dog food
Health and beauty products These items are things which are used on a daily or regular basis and the customer is shopping for frequently. Getting products on a subscription saves the customer time.
Steps to launch a subscription business
Step 1. Understand your customer
To launch a successful subscription business, you need to understand your consumer and consider whether there are products they are currently getting elsewhere. Think about how you can add value to the consumer. Are there certain products which customers buy regularly?
Are there products that would complement your current range that could be sold on a subscription basis? For example, could you start a pet food subscription offer if you sell pet accessories?
Why should the consumer buy from you? Step 2. Iron out your offer
What does this episode say about subscriptions & ltv?
Identify 'consumable' products that customers buy regularly, like pet food or supplements, as these are ideal for subscription models due to convenience and time-saving for the customer.
What does this episode say about customer retention?
Before launching, deeply understand your target customer: their current purchasing habits, unmet needs, and what value proposition your subscription can offer that competitors don't.
What does this episode say about product & merchandising?
Differentiate between "membership" subscriptions (like Amazon Prime perks) and "automatic repeat purchase" subscriptions (like monthly boxes) to correctly position your offering and manage customer expectations.
What does this episode say about subscriptions & ltv?
Address "subscription fatigue" by ensuring your service genuinely adds value and convenience, rather than just being another recurring charge for products easily found elsewhere.
What does this episode say about subscriptions & ltv?
Leverage subscriptions to not only generate recurring revenue but also to build closer, more durable relationships with your customer base by consistently providing value and convenience.
