Stitch Fix, Blue Apron, Sock Fancy, Dollar Shave Club, Proactiv, Michael Hyatt’s Platform University, DropBox, a baby learning toys subscription and Color Me Monthly. All of these are businesses whose subscription services I have used or am currently using. And that list doesn’t include the traditional monthly magazines and podcasts that automatically come into my mailbox – real or virtual.
Consumers love receiving products without the hassle of shopping. They like what they like and love the predictability of getting their favorites (and sometimes new surprises), just in time. More and more businesses are getting on board to offer subscription products and services. This can represent a large recurring revenue stream instead of the traditional one-time purchase. Subscriptions are a great way to build customer loyalty and get loads of new referrals from happy users.
Consider some of these other companies with monthly, quarterly or annual subscriptions: QVC “Auto-delivery” on all kinds of products, including beauty, food, jewelry and candles, Birchbox: monthly beauty samples, Netflix, magazines, book-of-the-month-club, fruit-of-the-month club like Harry & David, snacks, coffee, pet supplies, and a plethora of baby and children’s toy and clothing subscriptions. There are loads of different products being delivered to doorsteps today to busy men and women who don’t have time or don’t want to shop.
Take Blue Apron, for example. No longer do you have to decide what to cook. It’s done for you. So is the shopping. You get the recipes step-by-step and everything needed to whip up a delicious, nutritious meal in no time.
My new favorite is Stitch Fix. Since I don’t love to shop for clothes, this is perfect for me. An extensive survey starts the process, including price points, sizes and clothing preferences. Then once a month, a surprise box of 5 items (your Fix) lands on your doorstep. If you decide to keep all of the items, you receive a 25% discount. Otherwise, box up what you don’t like and send it back. For free. You just provide feedback and your orders get more refined to what you like and want. Yay!
As a subscriber, most of these services have affiliate links that you can share with your friends. When a friend then subscribes, you get cash towards your next shipment. Double yay.
As a business, you get very happy customers and lots more referrals.
Are subscriptions right for your business? Depends. Both products and services can use a subscription model. Here are some of benefits if you decide to offer a subscription service of some kind.
- This is all about delivering awesome customer experiences, which make you memorable and sharable. This is not a once-and-done. You are building long lasting customer relationships which lead to more referrals.
- You will get to know your customers preferences way better because you have built a tight relationship with them. Get to know their likes, dislikes, needs, wants, preferences… Because you are listening to them online and through feedback, you will be able to tailor and customize the user experience.
- Customers will look forward with excitement to receiving your product by their front door. Sometimes the delivery is a known, like Dollar Shave Club. Sometimes it’s a surprise, like Birchbox. It’s like Christmas morning every month!
- According to a recent survey by Hitwise, visits to subscription box sites have increased almost 3,000% in the United States since 2013, reaching 21.4 million visits during the month of January.
If subscriptions are new for you, keep in mind that while you are out there generating new leads, you also need to consider long-term metrics. Those include lifetime customer value, retention rates, and referral rates.
Have a little brainstorm session with some of your people and see what you can put together for recurring revenue in your business. My recent post mentioned Gift-of-the-Month-Clubs. You might be surprised to find a subscription service that your clients LOVE! And speaking of that, maybe you should gift your favorite clients with a subscription service to something THEY would love.