Should You Be Offering A Subscription Service To Your Customers?
1st October 2020
It seems like there is a subscription service for almost everything these days. From entertainment to magazines and food to beauty boxes. Subscription-based business models have enjoyed growth in recent years, with the market forecast to reach £1billion in value by 2022!
With new factors such as Covid-19 affecting the high street and forcing us to stay home, online shopping is more in-demand than ever before. Subscriptions proved to be exceptionally popular during lockdown that Gusto, a recipe box, announced it was creating an additional 1,000 jobs! Thanks to a huge increase in sales.
Convenience & Exclusivity
Speed and convenience are two of the most important factors for today’s customers. In an era where customers can order most items on next day delivery, consumers are becoming more and more impatient to get what they want and need. A great aspect of any subscription service is that these consumers can leave some of the decision-making up to others. Following on from this is exclusivity! This is what sells a lot of subscription-based boxes. Whether that’s because customers feel they’re getting a better deal on products which are hard to find in stores. Or because they know they’re getting an exclusive deal. Think GlossyBox.
Personalisation
We recently wrote a blog about how to offer a personalised experience. Customers value brands who tailor their products or services to their needs. To start off on the right track, many subscription businesses ask their customers to fill out a survey about them. If we use GlossyBox as our example again, customers create a profile. What their skin type is, what their main concerns are etc… Ensuring that the customers are getting products that suit and fulfil their needs.
Predictable Revenue & Improved CLV
Now we know for a business to be successful it also needs to make money. Subscription services allow you to scale your business whilst steadily growing revenue. Did you know it costs up to 7 times more to get a new customer than to retain your existing ones? With any subscription service, you only have to pay once to secure the customer. Afterwards, the value of your product/service keeps them subscribed. Therefore producing recurring revenue for your brand.
