How to Increase eCommerce Subscriptions for CPG Brands
Quick Summary The eCommerce market has expanded dramatically in the past five years; you can buy just about anything you want online. This is great for consumers, but it means there’s a lot more competition for many brands. Finding a way to stand out from the crowd is essential, especially for Consumer Packaged Goods (CPG) brands.
That’s why subscriptions are invaluable for CPG eCommerce brands. The number of products that offer subscriptions has skyrocketed by 100% in the past five years, and consumers appreciate it. Many CPG brands are popular precisely because they provide subscriptions — consider HelloFresh and Dollar Shave Club, for example.
Subscriptions aren’t just a matter of customer preference, though. CPG brands are increasingly moving to various subscription models because of the benefits they offer.
Subscriptions enforce customer loyalty. For instance, if a customer has a subscription to Dollar Shave Club, they’re probably not going to buy a different razor the next time they go shopping. Subscriptions also offer an automatic revenue stream for your business. You know that you can count on that revenue each week or month instead of estimating based on past non-subscription sales numbers.
If you want to compete with subscription CPG brands, you should work on increasing eCommerce subscriptions, too. Keep reading to learn about the three different subscription models and six ways you can increase eCommerce subscriptions to your brand.
The Three Types of Subscription Models
Subscriptions are much more than simple monthly deliveries. There are three main subscription models that your eCommerce business may offer. Understanding the model you’re already using will help you tailor your offerings to increase sign-ups and reduce churn.
Replenish products: The simplest form of subscription is the replenishment model. This subscription service will send refills of products the customer ordered on a regular basis. For example, OneBlade Shave will send new razor blades on the schedule requested by the customer. These services prioritize flexible scheduling and the ability to skip a delivery.
Curate products: Curated subscription services offer special collections of products tailored to the customer or built around different themes. Many curated services will take customer information into account, even if deliveries are themed. For example, a pet subscription service could consider the pet’s size and dietary requirements even while sending seasonal food boxes.
Offer exclusive products: Services that offer exclusive access to products rely on that exclusivity to win subscribers. That requires providing truly “exclusive” content. The subscription service can use bulk ordering to give the subscribers unique discounts. It could also develop dedicated contracts with providers to offer products early or offer items that aren’t for sale anywhere else.
How to Increase Subscriptions and Decrease Churn
Once you understand the service you’re offering, you can start improving it. There are many ways to improve your subscription rates and reduce cancellations. The following six tactics will help you make your subscription service more effective and build customer loyalty. Bonus: see how we helped OneBlade Shave increase their subscriptions by over 500%.
Make Subscribing More Convenient
Consumers are all about convenience. If you’re offering CPG goods, one of the best things you can do for your subscription rates is to make it easier to subscribe than reordering manually. It should be as easy to sign up for regular deliveries as it is to buy something once.
There are a couple of ways you can accomplish this. The simplest is to put subscriptions front and center on your site. Place your most popular entry-level subscriptions on your homepage so people see them every time they visit. Meanwhile, de-emphasize the non-subscription items.
Next, you can make subscriptions the default. Instead of requiring people to choose a subscription instead of a one-time purchase, you can design the check-out system to prioritize subscriptions. This requires the customer to opt-out instead of opt-in. It’s a minor change that can have an outsized effect on the number of new subscribers you gain each month.
Finally, you can offer one-click subscription buttons. Place a “Subscribe” button on different product pages that automatically adds the item to the user’s regular delivery. This prevents users from getting to the shopping cart and “thinking twice” about what they’re about to add.
Personalize Curation Boxes
If you offer curated subscriptions, you should put a lot of emphasis on personalization. People sign up for curated boxes because they want something special that’s chosen with them in mind. The more you can fine-tune your deliveries, the more your customers will love what they receive.
This is why you should collect as much user data as you can. The more you know about each subscriber, the better your choices will be. Depending on the nature of your brand, you can personalize subscription deliveries based on user information like:
Age: Older subscribers may be more interested in “throwback” products and classics, while younger customers are more likely to appreciate unique and trendy items.
Location: Consumers in cold climates will probably like hot chocolate in a food delivery box more than those in hot climates.
Allergies: Always ask about consumer allergies so you don’t send products containing peanuts or latex to someone who’s allergic, for instance.
Color preferences: Choosing products for a box based on a user’s favorite color adds an extra level of personalization to your service.
Past purchases: If a customer has bought things from your brand before signing up for a subscription box, take that information into account to build future deliveries.
Past ratings and reviews: Collect customer ratings to ensure you don’t send a product to someone who’s negatively reviewed it in the past.
There are thousands of CPG subscription services online. You shouldn’t be exactly like any of them. Instead, you should be creative to help your brand stand out.
Think about ways you can stand out in:
The CPG Industry: How are people marketing CPG products? What would catch your attention in a CPG ad?
Your specific product industry: Look for patterns in the ways your competitors sell your particular product(s). What can you do to stand out? If everyone selling wine subscriptions focuses on high-end wines, you could focus on selling fun and quirky vintage wine instead.
The subscription industry: What do you notice about subscription marketing and services as a whole? Can you improve it? If everyone does monthly boxes, could you do weekly deliveries?
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Be Impossible to Refuse
One problem that’s emerging with the rise of subscription services is a sense of feeling overwhelmed. Many consumers are starting to suffer from “subscription fatigue.” They have so many monthly subscriptions that they feel overloaded and start canceling them indiscriminately. This can be a significant cause of churn for subscription services.
You can avoid losing people to subscription fatigue by making your service impossible to refuse. Figure out what people like about what you offer and how you can improve it.
Do you offer low prices? Could you lower them further?
Do you offer convenience? Can you make your deliveries even more convenient?
Do you offer prestige or exclusivity? Can you offer even more exclusive items?
The goal is for your subscribers to identify your service as one they can’t get rid of. You need to offer them something they want that they simply can’t get anywhere else.
Offer Ways to Simplify
People subscribe to deliveries because it’s simpler than buying things manually. If you find more ways to simplify your customers’ lives, you can start increasing eCommerce subscriptions and keep old customers engaged. A few ways you might simplify your service include:
Offer auto-pay: If your subscription service doesn’t already have auto-pay, you should add it right away. Forcing consumers to manually pay every subscription period will push away consumers who want something easy. Auto-pay will automatically pull funds from the customer’s credit card, so they don’t have to think about it.
Perform automatic renewals: A step above auto-pay is automatic renewal. If your subscription service lasts for a specific period, inform customers that their subscription will renew unless they specifically cancel it. As a result, your customers aren’t forced to decide whether they want to opt-in to another period. This prevents a common churn point, since having to opt-out is more work.
Provide long-term subscription discount rates: Some customers don’t like seeing weekly or monthly charges on their cards. Offering a discount for quarterly or annual subscriptions gives you more revenue upfront and keeps people engaged for longer.
Dedicate Time to Monitoring Data
Last but not least, take time to review your data. It’s easy to get caught up in the day-to-day aspects of running an eCommerce business. If you’re working on increasing eCommerce subscriptions, though, you need to set aside time for reviewing your KPIs.
Check your subscription-specific data at least once a subscription period. For example, if you do weekly deliveries, review them once a week. Pay attention to KPIs like new sign-ups, cancellations, and upgrades. You can catch problems early and easily connect marketing efforts to specific upswings and downswings in new customers.
Increasing eCommerce Subscriptions Can Be Easy
Subscriptions are popular in eCommerce, especially for CPG products. Whether you’re just getting started with eCommerce subscriptions or you want to improve your current service, it’s easier than you’d think. By personalizing your subscription service, monitoring your data, and studying your competition to find ways to stand out, you start increasing eCommerce subscriptions and cut churn right away.
ReCharge is a great platform CPG brand owners can use to easily deploy and manage their brand’s subscriptions. They work with over 15 thousand merchants, including PetSmart and LOLA. Chat with us today about integrating this impressive app onto your Shopify store.