Optimising the subscription experience is critical to growing sales revenue and maximising ROI. Learn how to increase subscription sales with these 7 strategies.
Only 20 percent of subscription businesses successfully increase customer retention. Yet the most attractive attributes of the subscription business model—from predictable revenue and steady cash flow to strong customer relationships—require successful and sustained customer retention.
If you cannot retain customers, it becomes challenging to increase subscription sales or scale your business. Without a solid customer retention strategy, your business may struggle to cover operating costs and maintain sustainability, possibly leading to closure.
The only ways to keep your recurring revenue flowing is to add new subscribers and continually increase revenue from existing subscribers. So, how do you attract new subscribers and get your current ones to spend more money?
How to increase subscription sales.
Implementing the subscription business model offers the opportunity for multiple sales from the same customers.
However, the model does not guarantee a steady stream of new subscribers or monthly revenue growth.
A subscription is not a contract that forever binds a customer to your business. Subscribers can cancel their subscriptions anytime and take their business elsewhere if you do not meet their expectations.
A high customer retention rate is crucial for increasing your subscription sales and ROI. Hence, it's imperative to focus on customer retention efforts to ensure that subscribers perceive ongoing value in your product or service, ultimately reducing churn and supporting business growth.
Even if you successfully retain most of your customers, you must add new ones to grow your subscription sales and scale the business. Here are a few ways of doing both:
1. Make it clear you offer subscriptions.
Customers will only know that you offer subscription options if you tell them. Hence, you must actively promote your subscription product.
Using the example of a neighbourhood butchery, suppose you have added a subscription meat box as an extra sales channel.
Your main advantage is that you likely know most of your regular customers well. They essentially walk into your butcher shop, already primed for purchase, eliminating the need to allocate funds towards advertising and other marketing efforts to capture their attention.
Your regular walk-in customers are the easiest to convince and convert to subscribers. You can also leverage your relationship with them to test, validate, and improve your subscription product ideas.
In addition to telling your repeat customers in person that you are now offering a weekly curated meat subscription box, you can also put promotional banners in your store and advertise on your receipts and wrapping.
Another subscription sales promotion idea is to start a community or group on your Whatsapp business account and add regular customers. Whatsapp groups and communities represent an even more engaged marketing channel than an email list.
Given their familiarity with your establishment, repeat customers are typically more inclined to provide their contact details and engage with your promotional communications, thereby facilitating ongoing marketing efforts.
2. Simplify your subscription process.
Informing your repeat customers about your subscription offerings is essential for boosting subscription sales. However, their decision to sign up hinges on the simplicity and brevity of the process. If it's long and complex, some prospective customers will quit before they finish the sign-up process, while others will not even bother.
A seamless registration process is the essential foundation for establishing a thriving subscription business connection. However, it merely marks the beginning of the journey.
Simplifying your forms and making them more efficient to sign will encourage more sign-ups. Remove all unnecessary steps from your sign-up process. Ask for and only collect information from customers necessary to identify and bill them.
A few ways to simplify the sign-up process include:
- Asking people to type their password only once and adding a box they can check to unmask it.
- Autocompleting city and country codes. This is better than asking people to search long drop-down lists.
- using a hidden text field generated with client-side Javascript instead of CAPTCHAs to combat spam.
The above techniques will help optimise your sign-up process and help you convert more prospective customers. The following few tips will boost sales from existing subscribers.
3. Implement cross-selling and upselling.
Signing up new subscribers is one way of increasing subscription sales. Another is to get your existing subscribers to spend more money. By increasing your average order value, you also relieve yourself of the pressure to sign up new subscribers every month.
The two best ways to increase sales from the same customers are cross-selling and upselling. Cross-selling is when you suggest products that customers can add to their subscriptions, increasing the value of their transactions.
If you have many subscribers, the best cross-selling approach would be to segment your customers into different groups based on their purchase history.
For instance, you can segment customers based on their meat preferences. Some customers like white meats, others prefer red meat, while a select group may enjoy sausages and other processed meats better. Products you could recommend to subscribers depending on meat type include species and sauces.
Upselling is when you recommend a more premium and higher-priced option than a customer subscribes to. For instance, you can suggest a cured meat box instead of a regular fresh meat subscription.
However, whether upselling or cross-selling, ensure the process is convenient for customers. If customers have to tap many buttons to upgrade, you are not doing it right. Give them a chance to upgrade by suggesting it on multiple points of the shopping experience, including the check-out page.
Also, note that you must genuinely add value to their subscriptions to upsell your customers successfully. The upgrade has to be well worth it, offering tangible benefits like free delivery and exclusive discounts.
4. Deliver an exceptional yet flexible subscription product.
It isn't easy to upsell existing customers when the subscription experience barely meets their expectations. A more pressing task will be to convince them not to leave your business for your competition.
To get subscribers to stay with you and, hopefully, spend more, you must optimise your subscription experience to deliver exceptional value. Make it hard for subscribers to leave your business but easier for them to spend more money with you.
Ensure it is easy for customers to find what they are looking for, whether it is a subscription option that closely meets their needs or an inquiry over a billing error on their account.
To encourage upsells, give customers more options. For those happy enough with your product to buy for their friends and family, make it easy for them to gift subscriptions to others.
A great way to encourage cross-sells is to add a 'frequently purchased together' suggestion at check-out.
Flexibility is also an essential characteristic of high-growth subscription businesses. Offering customers the chance to customise their meat boxes makes them feel included and valued.
If a customer realises that they subscribed to the wrong subscription box, make it easy for them to swap. This is a better alternative to losing the customer to a rival because you need to make it hard for them to swap products.
Be prepared to adapt your subscription product—including your pricing and plans—to changing customer needs. Importantly, be transparent with your pricing. Price increases should not leave customers feeling blindsided.
5. Strive to win back inactive subscribers.
It is five times more expensive to acquire a new customer than to win back an inactive one.
There is always a chance that customers who cancel their subscriptions will return when their circumstances have changed. Consider them to be taking a break rather than a lost customer.
Customers cancel for different reasons, including budgetary constraints and changing needs.
For a meat box subscription business, a customer may cancel because they are travelling and will be away for a considerable time. Customers like these would prefer to pause their subscriptions instead of cancelling, so make it easy for them to do so.
If they are going away for a short time, some customers may prefer that you delay shipping their meat box rather than pause the subscription.
Customers struggling to pay their subscription fees may also prefer to pause their subscriptions than cancel them outright.
Netflix provides the best example of how a subscription business can win back inactive subscribers. From the frequency of their reminders to their emails' tone and clever messaging, you never feel like you are being spammed or coerced into resubscribing.
For Netflix, a cancelled subscription is never a 'goodbye' 'or 'we are sad to see you go' but a 'see you later'.
6. Reward customers for their loyalty.
Customers like to feel valued and appreciated. So much so that 75 percent of consumers surveyed for this study prefer companies that offer rewards.
Consider designing a loyalty program that rewards customers with discounts and other benefits when they reach a particular order total or hit important milestones. Clearly communicate these rewards on your product and check-out pages for maximum effect.
A reward program worth its weight should offer extra benefits to what subscribers get as standard on their subscriptions.
Rewards foster a sense of loyalty and allow customers to actively engage with your brand. This breeds familiarity and attachment to your company, making it hard for them to unsubscribe.
7. Automate your billing system to improve accuracy and transparency.
A disappointingly high number of subscription cancellations are due to billing disputes. And if losing customers wasn't bad enough, statistics show that as much as 30 percent of subscription payments fail.
Therefore, your subscription business could fail not because you did not have customers but because of inefficient billing processes.
Unfulfilled orders, failed payments, and overcharges are a few billing issues that can seriously hurt the subscription experience.
You can fix most billing issues by automating the billing and subscription management process.
Billing automation will eliminate billing errors that tick off customers. A good subscription management software streamlines the process of creating subscription plans and gives subscribers control over their subscriptions.
Intasend offers the best automated billing and subscription management software in the Kenyan market. An Intasend business account will also avail tools for collecting customer payments on your website or app, making bulk and scheduled payments to vendors and suppliers, and disbursing salaries, loans, and other funds.
Sign up for an Intasend business account today or book a demo to explore our market-leading tools that streamline business payments, collections, and disbursements.
