The subscription business model is not a new concept. Most of us have been subscribing to a variety of products or services our whole lives. Think about it, some of us may remember having milk delivered to our homes. We’ve woken up to the newspaper landing on our doorstep. Some pull into the driveway and find filled water jugs resting by the garage. And yes, those book club memberships.
There’s something inherently attractive about the subscription business model. People across both B2C and B2B industries enjoy the convenience of regular product deliveries and 24/7 services—which is likely why the industry has grown so fast. Between 2012 and 2019, subscription businesses grew revenues nearly five times faster than S&P 500 companies.
What has changed about the subscription business model is how digital technologies have made it so much easier. Easier for the customer and easier for your business. Payment processes, customer relationship management systems and EPA have radically changed business capabilities.
The subscription eCommerce business model is based on a customer paying a regularly recurring amount in exchange for the use of a service or a product. And those products are far-reaching. Music, books, coffee, wine, beauty products...you name it and you can most likely find a business with a subscription to it.
Via these subscriptions, companies are moving from single transactions with customers to building long-term relationships and recurring revenues. These subscription commerce platforms focus on customer retention over customer acquisition. They focus on the way revenue is made so that a single customer pays multiple payments for prolonged access to a good or service instead of a large upfront one-time price.
Because of the increasing popularity of subscriptions, it has become vital for businesses wanting to offer them to find the right platform for their businesses. However, the most important part of finding the right platform is first figuring out what your specific needs are. These are the items you’ll want to consider when starting a customer subscription. Let’s break them down.
1. Think general: One of the most important things to remember about setting up a subscription-based business model is simplicity. Not only does your business model have to be simple to set up for you, but it must also be simple for customers to navigate. Also, ask yourself, can you add this to your existing eCommerce system? Does this platform offer the flexibility to grow? If you say no to either of these questions, the platform you’re considering may not be the one for you.
2. In-depth analytics and reporting: What you might not realize when adding subscriptions to your existing platform is that you may need more in-depth analytics and reporting. Everything about your subscribers and your product or service will need to be tracked. Make sure any platform you consider can provide you the answers to questions like these:
3. Workflows, triggers, and automation: Along with those in-depth analytics and reporting comes automation. The right subscription commerce platform will include the workflows, triggers, and automation necessary to help you retain customers.
For example, your platform should send reminders to subscribers when a credit card is about to expire. An email to remind them to add to their order or to re-engage if they’ve let their subscription lapse. The more automation in these areas, the better.
4. Payment options: Providing flexible payment options for your customers is a must. Offering a variety of options is even better. A good subscription platform will have the ability to offer them. While some customers prefer to enter their own credit cards, others prefer sites like PayPal, still others, mobile wallets like Apple and Google Pay. It’s a good idea to figure out what you want to offer and make sure your platform can.
5. Omnichannel experiences: There is no doubt customers today are looking for the omnichannel experience even if they don’t realize that’s what they’re doing. An omnichannel experience enables your customer to change devices and move fluidly between channels. This means that your subscription platform needs to unify that experience across multiple channels. Make it easy to navigate, interact, input information, and purchase on multiple devices.
6. Segmentation and personalization: Of course customer retention is the goal with a subscription eCommerce platform. With that in mind, you have to think about the customer experience and you have to be able to personalize it. Ask yourself these questions when researching your platform:
In addition to all of the above, we’ve put together this handy checklist to help you run through the features of your platform to determine if it's a good fit for your new subscription commerce business. The list is compiled of even more questions to ask yourself before choosing your platform.
We’ve said before that subscription eCommerce is the wave of the future. Well, as they say, the future is now. Subscription commerce can help you retain customers for longer and boost revenue over time.
With the increasing popularity of subscriptions and rapidly emerging new technologies, it’s vital for businesses to find the right eCommerce platform that will allow them to provide great customer experiences and evolve with customers’ needs and demands to continue providing value through subscription-based business models.
To learn more about how Slatwall Commerce can help you optimize your subscriber journey, contact us.