Recently I blogged about the subscription commerce (I call it subcom) movement.
The post received a lot of good feedback and several CEOs of the companies featured reached out to me. I was able to talk with a few of them since then and gain more insight into this emerging space. KISSmetrics was even nice enough to turn my graphic into a full-blown infographic.
So to keep the discussion going I’ve been keeping notes about the main ingredients of a good subcom business. Here are my thoughts so far, after poking around, talking to folks and signing up for many of them.
Two very pretty buzzwords that are a big part of the subcom movement. Since many of these subscription services focus on a narrow niche it’s implied that the people behind the site really know the space well. When you sign up to a subcom you really want to feel it’s the best possible experience. Everything from the tone of the marketing, the design, and of course the product offering should shine through as very authoritative.
Simplified Ecommerce Funnel
The checkout process on a subscription service can be much different from your standard ecommerce user flow. For a subcom experience it’s best to strip away as much as possible in fact. Take a very Apple-esque approach to your design and user experience. Take away from it until it just works. This is where A/B testing becomes a critical exercise for any new subcom.
People can be lazy and associate high value to solutions that save them time. It’s not enough on its own to carry a subcom business but if you can marry convenience with a few of these other ingredients you’re on the right track. If you can provide the convenience without charging a massive premium you’re doing really well. Bathroom consumables seem like a huge market that is going to really take advantage of the convenience of auto-ship.
It’s important for all subcoms that subscribers never feel like they have “too much of a good thing”. For example if you sold a perishable item you would never want the customer stockpiling too much in their pantry. As soon as they start to think they have too much of a product they’re on the ropes, possibly ready to unsubscribe. One nice thing some companies are doing is giving customers the option to pause or skip a subscription. This is a win-win because the seller doesn’t lose the customer and the customer can always reactivate themselves at a later time.
The Zappos Experience
Most readers are likely familiar with the Zappos experience, specifically around customer care. Basically going above and beyond to keep a customer (and employees) happy. Since most subcom businesses start off small it’s probably important to instill these values from the beginning. I had one monthly membership club call me personally to check my order details only to follow that up with an email right from the CEO. That level of personal touch is not typical today but can help define a company. I love the personal touch and I’m sure I’m not alone.
Some might argue that it’s the little things in life that matter. For a subcom it’s really about a lot of small delights. In fact some of these businesses are nothing but small delights in the form of many product samples. Other subcoms are supplementing their core offering with small delights. Those little things go a long way to keeping the customer happy, subscribed.
Content was king of course until the Huffington Post turned into a sausage factory. Just like sausage, you really don’t want to know how it’s made. However, with subscription commerce there are a lot of great opportunities to create content around the brand and its audience. I’m talking about going beyond just a blog to super-serving customers with compiling content across multiple channels each month. Only a few existing subcom businesses are doing this well right now.
Are there more key ingredients to subcom businesses? Let me know in the comments below.
Marketing Terms Meanings
- Average Revenue Per User (ARPU)
- Annual Recurring Revenue (ARR)
- Average Order Value (AOV)
- Customer Acquisition Cost (CAC)
- Conversion Rate Optimization (CRO)
- Cost Per Click (CPC)
- Cost Per Lead (CPL)
- Cost Per Mille (CPM)
- Call To Action (CTA)
- Click Through Rate (CTR)
- Google Analytics (GA)
- Gross Merchandise Value (GMV)
- Key Performance Indicators (KPI)
- LifeTime Value (LTV)
- Monthly Recurring Revenue (MRR)
- Month on Month (MoM)
- Net Promoter Score (NPS)
- Search Engine Optimization (SEO)
- Search Engine Results Page (SERP)
- Social Media (SoMe)
- Unique Selling Proposition (USP)
- Urchin Tracking Module (UTM)
- Word of Mouth (WOM)