Between 2012 and 2019, subscription marketing grew 350%, led by major players like Amazon Prime, Disney Plus, Netflix and Spotify. But it’s not just about the big players; everyone from children’s mindfulness to craft beer brands are offering their customers regular, subscription-based content delivered to their door.
And with COVID-19 seeing us spend more time indoors, subscription marketing has become a choice weapon in the marketing mix. Thinking of following suit? Here’s how to make subscription marketing a success.
Why businesses love subscription marketing
Subscription marketing is the selling of your product to your customers on a regular, ongoing basis, with a view to encouraging long-term repeat purchases that benefit your business and offer great value to your consumers.
It’s a great way to secure repeat custom, to build trust, and to nurture brand loyalty. Companies love it as it means reliable regular revenue, it’s easier to predict stock levels, and provides a ready-made research data pool, offering useful insights into customer behaviour. But the benefits don’t stop there.
Consumers love subscriptions, too
Subscriptions are hugely advantageous to a consumer, largely because they solve lots of life’s irritations. Firstly, consumers love a bargain. Subscriptions often offer discounted prices compared to buying in store. It’s also a great way to tempt new customers to try before they buy.
Subscription marketing appeals to younger audiences who crave convenience as much as quality.
Convenience is another biggie. Buying the things you want and need without leaving the house has become the norm. And subscriptions mean topping-up has never been easier. Research shows that younger generations like millennials are 35% more likely to choose a subscription for shaving products and 28% more likely for beauty products.
Not forgetting the fact that people really do want it to be Christmas every day. Waiting for Santa (the postman) to knock and deliver your well-earned crate of craft beer or weekend outfit adds a little frisson of excitement to any day.
A product of necessity
Subscription marketing, already a growing force, really took off in response to the COVID-19 pandemic. Confined to our homes and needing convenience more than ever, subscription models dramatically increased. Digital products, new services, and upgraded regular ones quickly evolved to meet the need.
The challenges subscription marketing presents
Subscriptions are a brilliantly fruitful way to increase revenue and grow a loyal following. But like everything, it doesn’t come without its challenges.
Keeping subscribers subscribing
The biggest challenge for a subscription business is the cost to acquiring new customers. Have you crafted relevant, engaging, and well-targeted marketing comms to attract a following? Do you have the logistics in place to ensure timely delivery? Have you spent the necessary resources in researching your audience – and your pricing strategy?
Buyers’ remorse is a real risk with subscription models. They can, at any time, come to the realisation that they may have made an error – or that their £7.99 a month is better spent on Disney Plus or a bottle of plonk. It’s your job to get people interested – and, once they become subscribers, to keep them interested. You need to make what you do a routine part of people’s lives so they see it as a value-adding purchase and don’t press that ‘Cancel subscription’ button.
A great way to do this is through surprising and delighting your customers. Tactics such as adding intriguing new product ranges, throwing in freebies when customers hit certain milestones (“To celebrate our six month anniversary, here’s a free…”), and offering a discounted price for loyal club members will keep people interested in what you do beyond just the product you sell.
Up your digital game, too. Even if what you sell is physical, having a well-produced, value-adding and easy-to-navigate website that intrigues and engages makes sure you don’t suffer an experience debt and makes your brand an enjoyable experience, online and off.
Use inbound marketing
Inbound marketing is the process of using ‘pull’ content such as blogs, social media, email campaigns, and search engine optimisation to raise brand awareness, engage leads, convert them to customers, and delight them long after they’ve signed up.
A big part of this, as mentioned earlier, is a UX-friendly, well-designed, and conversion-optimised website that ranks well on Google. But you also need to drive people to the site through articles, press releases, a strong social media game, email, live stream demos and so on.
Picture your brand operations as a wheel. Your website is the hub in the middle, around which content ‘spokes’ (social, email, blogs etc) stem. They bring people in from the edge by raising awareness, funnelling them into the centre of the wheel where people are clicking on your site and subscribing to your product.
Supported by a CRM such as HubSpot, you can score leads, keep track of warm prospects, and create a history of every contact with every consumer, so your customer service is always on-point. And remember, it’s this customer service – as well as promotions, new products, and regularly producing engaging content – that keeps people at the centre of your brand wheel.
Get your pricing right
As we’ve said, your subscription product will have a lot of competition – from fitness and food (and fitness food) to the entertainment giants of Amazon and AppleTV. So getting your pricing right, in a way that makes people feel they’re getting good value compared to a £7.99 Netflix subscription (no mean feat), is crucial.
Using discounts is a good tactic to win new customers, but they can also put off current subscribers who are paying full price. The trick is offering existing customers plenty of pricing incentives too, rather than reserving them for newcomers.
Make sure payment methods work
One of the biggest reasons for customers leaving subscriptions (a business’ ‘churn rate’) is failed payment methods. 40% of subscription brand’s churn is down to a failed payment and 70% of consumers fail to re-attempt to make payment when their card declines or payment method expires.
How your subscription marketing strategy can reap rewards
Freebies and discounts
Attract attention and give potential customers a reason to try out your brand. Some businesses offer products for free or experiment with a ‘freemium’ version to see what customers respond to. As an acquisition tactic, it should be used as part of a long-term strategy.
Differentiation is key
Make your brand stand out by differentiating your offering from your competitors. Try new products, tailor offers and create new combinations of discounts. It’s a free market research and development opportunity too, so make the most of it.
Don’t underestimate the power of influencers. As trusted voices to thousands of followers, they’re a great way to reach even more potential customers. Send them amazing products and deals to review, demonstrate and wax lyrical about. It works. In fact, 75% of companies have turned to influencer marketing.
Drill down into your mailing list
Use your mailing list to segment new customer groups and offer them tailored subscription entry discounts or seasonal special offers. It can drive potential subscribers to sign up, it builds your customer relationship, and is another touchpoint that lets you talk directly to your customers.
Generate relevant persuasive content
Use clever content to demonstrate your product, your services and your expertise. Make use of tips and masterclasses across your social feeds, email campaigns and blog posts to regularly engage and educate potential and existing customers.
Ready to make the leap?
Subscription services not only provide a reliable cash flow to weather an unpredictable storm, they offer more opportunities to engage with your audience, cross sell and gather data to inform your next sales strategy.
All of which, as it happens, is stuff we can help with. All you need to do is go here and get in touch.