Ultimately it costs a lot to generate a customer, entice them to return and to increase their basket size or their order value. As marketers, we are starting to look at changing the business model, getting customers and advocates hooked in over a longer time period.
Why? This allows us increased budgets for attracting new customers – as long as we then invest in service and experience to engage and retain them. It’s also true that those advocates will buy more and tell their friends.
In the B2C world, subscriptions used to be limited to media and entertainment, such as Sky, Netflix, National Geographic and Virgin Media. Today, you can subscribe to everything from shaving kits to veg boxes and even toys.
In theory, you could sit down on Jan 1st and have an intensive session of online subscribing that will have every one of your daily needs sorted for the next 12 months. When you realise you have subscriptions to hair dye, washing powder, movie merchandise and makeup, you know that convenience and a reward for your loyalty is king.
Even when looking for a car, we now are starting to seek subscription models. Alongside leasing, many are turning to PCP finance, in which only the devaluation of a car (plus interest) is paid in a set amount of time. This gives customers the autonomy to upgrade or buy at the end of their contract – a new angle on the subscription model.
So, getting customers to click that subscribe button is a no-brainer from a marketing point of view. Not only is it convenient for the customer, one conversion means ongoing guaranteed revenue, or at least it should. The problem is, and happily for the consumer, 12-month locked in subscriptions are largely a thing of the past… In many instances, ecommerce subscription products are created on a rolling month-by-month basis.
While you might have attracted a customer to subscribe, there’s no guarantee they’ll stay. If anything, once you have the sale, the work begins. Customers go through their own little hype curve when they commit to a subscription. There’s the discovery (‘Wow! Eyeliner delivered every month, who knew?’), the anticipation (‘I can’t wait to get eyeliner through the post every month, amazing!’), the evangelising (‘Hey everyone, getting eyeliner through the post is a REVELATION!’) and the calming (‘Oh look, my new eyeliner, I’d forgotten about that’).
Then the curve hits the downward slide – the wandering eye (‘They have much better eyeliner in that shop/box/subscription’) and then the break-up (‘Do I really need eyeliner every single month?’ or ‘I want eyeliner and lipstick every month – theirs is better’). How brands manage that curve is key to heading off the wandering eye and the break-up.
The same tools used to bring customers to a subscription model in the first place need to be deployed across the customer’s lifetime. Emotional marketing has a huge influence on how subscription models stay relevant to customers’ lives.
In the case of Harry’s shaving subscription, that means a combination of plucking the heartstrings (real employees sharing stories of their first shave) and sticking it to the man (founders standing in their boxers in an ad explaining why big FMCG threatened to ‘sue their pants off’).
But you don’t have to be a startup to create a subscription, nor is emotion beyond the reach of giants. P&G demonstrated the very threat subscription models face by highlighting social media posts of disgruntled Harry’s users, such as the one below. For every subscriber that is hooked, there is a poacher waiting to snare it away again.
Tried Dollar Shave but the blades just weren’t as good. Back w @Gillette. You get what you pay for! pic.twitter.com/AAl4ZKY0Aj
— John Caron (@jcaron2) 15 July 2015
User generated content (UGC) is at the heart of this battle. Whether the winner or the challenger, positive views and reviews can capture a new customer while negative ones give an existing customer pause for thought, even if their own experience is just fine. Sadly, few want to ally with the losing side.
Keeping the subscriptions fresh and relevant is a task for which UGC is ideally suited. Raving about the fresh beets in the veg box on Twitter, rhapsodising over the Funko Pop in the loot box reviews section – glowing reviews attract new customers but also reassure current subscribers that they’re making the right choice.
Subscription models are growing in popularity as they offer a way to keep customers loyal for longer, but they’re not an excuse for marketers to get lazy. While UGC is a critical tool to keeping that loyalty in the face of intense competition, it’s up to brands to encourage and cultivate it.
Promote sharing on social media and elicit reviews and keep preaching to the converted. Even devout followers aren’t immune to temptation.