Subscription marketing refocuses the consumer’s mind from solving their problems to having them taken care of forever. Learn how to promote your subscription product.
The subscription market is reaching saturation point in the West. Meanwhile, it's in its infancy in Kenya and the rest of the developing world.
While this gives the subscription business model the look of gold, there has been no accompanying gold rush. And there are reasons for this. Subscriptions and one-time purchases are two different beasts. The former presents a decidedly unique marketing challenge.
The main challenge is convincing customers and prospects alike that your subscription offer is worth the recurring cost.
This article is a deep dive into subscription marketing. We will examine why convincing customers accustomed to one-time purchases to switch to subscription payments is hard and offer tips on overcoming this challenge.
Subscription marketing is the processes and strategies you use to attract customers to your subscription product offerings. It also includes what you do to retain existing subscribers.
The main goals of your marketing as a subscription business are to make customers aware of your subscription offer, convince them to subscribe, and - importantly - retain them for the long term.
This requires a more nuanced approach than usual since you are trying to change the consumer’s mindset and sell simultaneously. The subscription business model entails not just asking customers to change the way they buy but also how they assess value.
The main challenge with marketing a subscription service is changing customer psychology from buying to subscribing. This requires you to package your offers so the customer can understand the value they will get.
In a traditional, one-purchase model, customers pay full price for a product they will use to solve a problem by themselves. When you sell a service, they pay full price for you to solve their problem.
When they have to solve the problem or need it solved again, they will pay again, and may use a different supplier or provider.
In a subscription business model, however, you are promising the customer that they will not have to worry about the problem ever again. The only caveat is they will have to pay you a recurring fee.
In Kenya, consumers are accustomed to one-time purchases. Their mindset is to own the solutions to their problems.
Convincing such a market that paying a perpetual monthly fee unlocks more value beyond the convenience of never having to worry about a problem again is the marketing challenge you must overcome.
If the market is not sure what they are getting or they are skeptical about the value they will get for the monthly fee you are charging, they will not sign up. They will not buy.
In that regard, at first, subscription marketing is about refocusing the consumer’s mind on their problem or pain point as it is about convincing them to buy. You must redirect their minds from problem to need, from ownership to solution.
For example, when a person buys a car, what they are really after is mobility. In fact, ownership itself comes with challenges and costs, including maintenance, repair, and insurance. A car subscription would remove the burden of ownership while guaranteed them mobility.
But it’s about how you package and communicate the car subscription that’s important. If people are confused about the mechanics of your offer, they will quite reasonably refuse to buy.
Ultimately, people buy products to solve problems. But for physical goods especially, there is also pride in owning something of value, even though it comes with running costs.
Subscribing to a weekly lawn care service should be cheaper and more convenient than investing a considerable amount of money upfront to buy and maintain equipment and mow the lawn yourself.
But that may not be enough incentive for a person who is not familiar with subscription services and has always taken pride of their prized gardening and lawn care equipment.
People are skeptical of change despite the benefits it promises. In our example, one of the reasons will be the uncertainty of whether your lawn care subscription service will be reliable.
They will worry about replacing what has worked well for them for what promises to be more convenient and economical but is not guaranteed to be. This is the challenge of selling subscriptions.
So, your success in promoting a subscription offer depends on how well you unpack not just the subscription experience but the subscription benefits as well.
We should look at this challenge primarily in the context of a business that is switching to or adding subscriptions as an extra sales channel.
We must also assume that the benefits of adding a subscription channel are what has forced you into the decision. Among these are:
To convince your customers to accept subscription pricing, you must articulate what’s in it for them. You should confidently answer the question, why should they care?
There is always the nuclear option of switching entirely to a subscription model, regardless of the objections of some of your customers.
But to avoid losing those customers who aren’t convinced that a subscription is the right option, you must try to find out and address the reason for their friction.
Here are some ways of doing that:
Unless you are switching to a subscription model in response to customers’ demands for a tailored experience, you must first understand their perspective on value.
You have an easier time of this if most of your customers look at your product as a means to a solution, not an asset.
Either way, you must clearly explain how your subscription offer will relieve their pains and improve their lives. This assumes you have studied your customers and know what specific problems you are solving.
For example, to remodel your DVD sales business to a streaming service like Netflix, you must be sure that your customers value the convenience of watching any movie on demand more than owning a video library. A VHS tape or DVD collector is not a viable prospect for a streaming service.
If what they want is access to the largest video library, you must know how much they think will be a fair monthly subscription fee. The best way to do this is to ask them.
As you research your customers to understand their needs, note their expressed and inferred needs because you may not get clear answers.
Shifting to a subscription pricing model must not appear to customers as a way to squeeze more money out of them. To avoid creating this impression, you must be transparent about what and how much you charge.
Make it clear how the new pricing strategy isn’t about increasing prices. It should be about improving efficiency, delivering more value, boosting convenience for loyal customers, and enhancing the customer experience.
While you do that, ensure your pricing and product (subscription plan) pages clearly display your prices. You must specify what billing cycle you are using in each case.
Another important decision to make is what pricing model you will use. There is no one best pricing model. The right model will be one that serves both your own and your customers’ needs. Is it:
Customers do not want to have to work to spend their money. Whether doing their own shopping online or signing up for a subscription box, they want to do it in a few clicks. That is the e-commerce standard now.
Your retention rates will also be pretty poor if customers have to make constant follow-ups on delayed shipments.
Optimising the subscriber experience should be an ongoing task. It shouldn’t end after the customer subscribes. It continues right through the customer journey.
This process balances what the customer wants versus what the business wants. If you don’t strike the right balance, the customer does not subscribe or will churn before long.
When customers are asked to change how they have always solved problems or satisfied their needs, the picture they see is that of risk. You have to remove or minimise this risk to sign them up to your subscription offer.
The best way of minimising risk for customers is to highlight how a subscription service is better than outright ownership. Highlighting the benefits of subscribing over one-time purchases takes prospects' minds away from the perceived risks.
If that doesn’t succeed, you can offer discounts as an incentive. A smarter way of doing this is by promising substantial discounts to those who sign up for yearly plans. That guarantees you at least a year of sales, meaning more predictable revenue for your business.
One of the main attractions for subscriptions for customers is the promise to check out once and never have to do it again.
This benefit is hard to sell if buying a subscription involves long forms and back-and-forth emails with the sales team. The sign up forms should be short, with the pricing and terms clearly spelled out.
Your subscription marketing strategy should go beyond educating prospects and changing the prospect’s psychology from owning to subscribing.
Because the subscription market is attracting many new players, convincing the market to choose your subscription offer over the competition’s will only grow tougher.
Here are some ways to promote your subscription offers and drive revenue:
It’s asking customers a lot to expect them to sign up for a service they aren’t sure works for them or if at all. They need to know you are confident in the product yourself.
Would you use the subscription service yourself?
If you are sure that your subscription product meets your customers’ needs, you should have no issue letting them try it for free before signing up. The free trial will help build trust by letting customers sample the product without commitments.
A point to note is that the free trial period should neither be too short or too long.
You must give prospects enough time to test the product and build engagement with the brand. But the time should not be too long that it robs the business of revenue it needs to provide a quality subscription experience.
Free trials are also useful where it is hard to describe your subscription product and its benefits or where the market struggles to understand your value proposition.
Sometimes, it is not enough to offer free trials. Customers may still take decide not to sign up after the free trial or take their time to do so.
To push them into a subscription, you can dangle a compelling offer before them, like a 50% discount on the annual plan if they sign up within a month. Usually, such an offer is too tempting to pass up on.
Limited-time deals put a cap on how much time consumers have to take up your offer.
You can take advantage of shopping season events like Black Friday when consumers are in spending mood to offer your limited-time subscription offers.
This acquisition strategy works because customers are not being forced to make a commitment. You are only limiting the time they have to test if the subscription offer delivers enough value before paying for it.
Consumers are always looking for ways to save money. What better way to promote your subscription offers than to highlight the savings customers will enjoy if they sign up?
Note, however, that you must be able to show how and where customers will save by signing up for your subscription service. Use actual figures to highlight the savings.
It helps to sell your subscription product if customers have a choice. Instead of offering one subscription plan, find a way of offering several.
Use your content to promote your flexible subscription plans as part of your goal to accommodate various needs and budgets.
Sell these plans at different price points, perhaps offering premium features and benefits as upgrade options to cater to all budgets and open upselling opportunities.
Consumers are wary of getting locked into rigid subscription plans, unless they are sure the plans meet their specific needs. One way of addressing this fear is by offering them the option of customising their subscription plans.
Some customers will be so happy with your subscription product that they want to share the experience with friends and family. These present a promotion opportunity. Indulge them by offering them the option to gift a subscription.
Granted, chances are low that these gifted subscriptions will be renewed because the beneficiaries never signed up in the first place. But there’s always that chance that they will love the product so much they will want to renew the subscription.
The holidays are again a good time to promote these offers as people are naturally in gifting mode. Some may actually be struggling for gift ideas.
Influencer marketing is having a moment. Even saying that is to understate the impact signing up the right influencer can have on your promotion campaigns.
Influencers are particularly useful for promoting subscription boxes. Unboxing videos featuring celebrities and influencers provide great shareable content for social media.
Use influencers not just to boost publicity around your subscription box but to differentiate your product from the competition. But to do this, you must pick the right celebrity or influencer. Picking the wrong influencer may harm your brand.
A marketer’s job is never done. But you can get off to a great start and make your job much easier by giving your subscription business the right foundation. A big part of your subscription product is the software it runs on.
The Intasend automatic billing and subscription management software is designed for Kenyan businesses looking to automate their customer payments and those wanting to start a subscription business or add subscription options to their sales.