No, you’re not imagining it – there’s literally a subscription for everything! From beef jerky to artisan candles, you can get just about anything delivered straight to your front door on a monthly, bimonthly, or quarterly basis.
So, what’s with the rise in popularity of subscription-based products and offerings? And how can you get in on this lucrative sales model while retaining subscribers for the long term? We break down 4 customer retention strategies for you in this article.
Costco Leads the Way in Keeping Customers
According to Alex Barseghian, Forbes Council Member and author of Localmotion, the bulk-buy retailer Costco had a lot to do with the rise in popularity for subscriptions, due in large part to their pricing model.
“Costco played a major role in changing the game. While it’s not a monthly subscription cost like we normally think of, the company built its business by limiting customer access,” says Barseghian.
“At first, business owners paid to access Costco’s stores. After that, Costco welcomed individual members who were happy to pay an annual fee in exchange for access to goods that were way cheaper than they could get from Costco’s competitors.”
The lure of the subscription comes down to getting more for less than you would pay for otherwise and exclusive brand loyalty. Costco fits that model, as does Dollar Shave Club, BarkBox, Birchbox, and products ordered with the Amazon “Subscribe and Save” feature.
Here at ClickBank, we have many sellers offering products for sale on a recurring subscription basis – which makes them and their affiliates happy! Here’s what you need to know to retain more subscribers for your product.
Top 4 Customer Retention Strategies for Subscribers
If you want to add a subscription element to your offer (or if you’ve already added one), one of the main hurdles you may run into is identifying how to keep subscribers and reduce churn rate.
From industry giants like Costco to growing brands like The Sip, subscription customer retention strategies are critical and uniquely designed to keep people from leaving. Even small changes to how you approach your offer can make a huge difference in whether subscribers stick around.
So, here are our tried-and-true top four strategies for subscriber retention:
- Watch the Numbers to Keep Subscribers
- Keep the Subscription Value Consistent
- Use Those Social Media Channels
- Offer Subscriber Exclusive Savings
1) Watch the Numbers to Keep Subscribers
Keeping tabs on churn is one of the greatest ways to ensure that you’re retaining your subscriber base.
If you’re not familiar with churn, here’s a quick definition from Wikipedia:
“Churn rate (sometimes called attrition rate), in its broadest sense, is a measure of the number of individuals or items moving out of a collective group over a specific period. It is one of two primary factors that determine the steady-state level of customers a business will support.”
Churn provides the greatest insight into what you can do to optimize your subscription offering. It is the key that will unlock your ability to keep subscribers subscribed. If you don’t have this information, you can’t take data-driven steps toward improvement.
There are a lot of ways you can calculate churn – however, the most common is this one:
For ClickBank clients who sell recurring products, our new and improved subscription analytics not only provide churn rate, but also include:
- Subscription activity
- Stick
- Trial to paid
- Monthly recurring revenue
- Average revenue per user
Learning how to read and monitor these numbers empowers vendors to make business decisions based on supporting data. Find out more about our updated subscription analytics here.
2) Keep the Subscription Value Consistent
Subscribers are likely to unsubscribe in droves if the subscription installments following their first one are underwhelming, lacking in value or presentation, or not aligned with the experience that they expected. To keep the excitement and anticipation high, make sure to remind subscribers that their membership or subscription delivery is on its way and allow them to either preview their subscription or customize their subscription.
This customer retention tactic is a common one for Birchbox. Each month, subscribers are reminded that they have a specific window of time when they can add to or customize their subscription box. This reduces subscription disappointment and increases customer satisfaction!
Also, keep in mind that subscription value isn’t only judged from the contents provided. Brand and company loyalty play a big part in why people decide to sign up and pay for something they haven’t experienced yet. Make sure your subscription products and offerings are branded, and that the imagery and messaging are consistent with what your customers expect.
3) Use Those Social Media Channels
Novelty diminishes over time. This is true for literally everything. To mitigate this phenomenon, product owners need to use communication to build anticipation, create a branded experience, answer customer questions, and provide a lens into the people behind the product.
BarkBox has particularly wonderful (and entertaining) Instagram content that does all of that. Granted, their subject matter is mostly dogs (and who doesn’t love dogs?) – but even with a newbie subscription offer, you can curate a social media experience to allow for interaction and provide product insights and sneak peeks for your subscribers.
As a bonus, when you keep subscribers engaged on social media, your brand stays top of mind. Let’s face it: people can get busy and forget what they’re subscribed to sometimes!
Fortunately, customers are more likely to use and appreciate your product if they’re reminded about it on a regular basis – especially if they see you talking about new features or providing additional value right there on Facebook, Instagram, YouTube, etc.
4) Offer Subscriber Exclusive Savings
Offering exclusive savings to subscribers is where Costco really gets it right! In fact, this tactic is one of the backbones of a quality subscription offer. The idea of incentivizing subscribers with savings (rather than convenience only) is a great retention method – and it’s how this bulk buys giant got started.
Don’t worry – you don’t need a warehouse in Seattle to keep subscribers interested! All you have to do is provide a quality product consistently for less than you would sell it individually.
Once a subscriber has committed, you can also rely on the fact that you have their money and attention for as long as they remain subscribed, so why not invite them in to buy ad hoc products for a lesser amount? This could be in the form of offering subscription add-ons, subscription points, birthday bonuses, and more.
The psychology here is important: once a customer is already bought in, it feels like they’re missing out if they DON’T take advantage of exclusive savings – which means you as a seller have plenty of opportunities for upsells that make you more money, but also keep customers engaged within your brand ecosystem!
Customer Retention Strategy Wrap-up
Once you incorporate these 4 customer retention strategies into your subscription offering, you’ll have everything you need to keep those subscriber numbers up!
The good news is, this stuff isn’t rocket science! Subscriber retention is really just the foundations of good business: data, value, communication, and customer satisfaction. Keep those tenets at the forefront of your mind as you implement tactics to reduce churn and you’ll have a customer base that stays loyal and sticks around for awhile!
To find out more about how ClickBank helps vendors monitor their churn, sign up for an account here.
Already have an account? Take a look at the Knowledge Base to learn more.