The growth of this market is staggering---increasing at a rate of 200% per year and generating over $5 billion in 2017 alone. With over 10,000 subscription-based businesses, it’s attracting all types of sellers and new ideas. Once people saw how successful companies like Birchbox were with their model, they wanted to mimic a successful subscription box business. And with low barriers to entry, it is an appealing start-up for many entrepreneurs. When all is said and done, however, making sure your subscription box company stays relevant to your customers is vital to staying in business.
Offering good value for the money is one of the key components of a successful subscription box company. According to Liz Cadman, founder of My Subscription Addiction, subscribers are looking for a box to double the value of what they’ve paid: “It helps them justify the risk of spending money when they don’t exactly know what is in the box.”
Choose the Right Products
Creating value through the products offered each month is key. While subscription box companies can usually get products at a low cost or for free, the right mix of products for your customer base is more important than just putting in any free product that you can get. Samples should be premium or actual full-sized products. Overall, the subscription box should work “as one” to enhance the experience of each individual product.
Use Email and Social Media
Once a subscriber is signed up, the work doesn’t stop. Retention and subscriber growth both take a lot of work. It’s a good idea to connect with your subscribers throughout their lifecycle via email. Trigger-based email campaigns can result in four times more revenue and 18 times more profit, according to Forrester Research. There are always opportunities to test parts of your email campaign to boost conversions as well.
Similarly, interact with your customers on your social media pages. This is a forum to test new ideas and get feedback from your customer base. It is also a chance to keep your customers updated with sneak peeks and product discounts.
Expand Your Revenue Stream
Online shopping is clearly here to stay and there may be other opportunities to have your customers buy the products you are featuring in your box. Birchbox is an excellent example of a sub box company that does not only make money from monthly subscriptions: the company uses its website to sell the products it puts in its boxes and has opened a brick-and-mortar store in Soho, NYC. The company feels this expansion is necessary to ensure the brand grows.
Before making any changes to your subscription box model, check with your customers first. While it might be exciting to be able to try something new, your subscribers might not agree. Getting feedback from your subscriber base is important. Analytics tools can also help you understand your customer and their buying behavior, as well as how well your website is working.
In the end, successful subscription boxes understand that customers’ experiences with their box need to be optimized and enhanced every single month. And, retaining customers is just as important as growing new ones.