How Well Do You Know Your Subscription Box Subscriber?

How Well Do You Know Your Subscription Box Subscriber?

Your idea for a subscription box might be unique, creative, and generate a lot of buzz…initially.  However that initial interest is not enough to sustain a business long-term.   Customer retention after the first few months is a challenge for all subscription box companies.  Knowing who you are selling to might help retain them as a customer.

An article by marketingprofs.com entitled ‘Lifecycle Marketing for Subscription-Based Services:  Four Subscriber Personas’, states that as many as 80% of customers cancel their subscription within the first three months.  That is a high percentage, especially considering the money invested to bring the subscriber on in the first place.  The article cites four different personalities that marketers must cater to in order to create a long-lasting relationship with their customers.

Promo Abusers:

This type of customer loves a good promotion so they just could not resist the “$20 off your first box” that appeared in their inbox.  Promo abusers also notorious for cancelling right after they sign up.  In fact, between 30-40% of customers who signup via a promotion cancel the subscription before the second payment.  Some even re-use the promo to create a new subscription after cancelling the original one.

These customers need to be retained quickly, so rewarding them for loyalty is one way to encourage them to stay.  For example, after so many consecutive paid orders, they will receive a discount on the next one.  Or, get that elusive second purchase by using a popup with a reward or discount during the first order.

New Subscribers: 

New subscribers are not loyal customers yet, as they are deciding whether or not to continue the membership.  Those that have a better initial experience will become loyal subscribers faster.   Analyzing ratings and subscriber comments is one way to understand the customer experience.  Customers who cancelled after their first payment and rated their experience have a 18% lower rating than the rest of customers so companies can respond to them quickly with incentives before they cancel their subscription.  Giving points towards a reward or discount for every rating or survey encourages engagement.

Active Subscribers:

Members who have received several deliveries generate the most revenue so it is important to keep them satisfied.  About 75% of active subscribers ask to skip a delivery at some point.   The ratio of deliveries skipped is in direct correlation to the predicted future value of the subscriber:

Active customers need to get the right offer to improve engagement and strengthen loyalty.  Product recommendations as an add-on to their next delivery works well for these customers, as does enticing the customer with a reward for completing an activity like a survey or rating.

Churned Subscribers:

Customers who have already cancelled their membership are very difficult to re-instate.  A good amount (10-25%) of churned subscribers continue to visit the company website, and the more often they visit, the higher the probability that they will renew.   Marketers should concentrate on churned subscribers that have a higher chance for renewal, such as those who have given positive ratings in the past.  They are 55% more like to reactivate than those with few positive ratings.   Timing is everything with churned subscribers who must be contacted immediately after visiting the website in order to re-activate.

Retaining subscription-based customers requires a different model.   A personalized approach is the key to a successful subscription box business.  Let Kable help you maximize your retention efforts based on your subscriber base at https://www.kablefulfillment.com.