Interviews, insight & analysis on Ecommerce

How to retain customers in a subscription business

By Dan Ziv, TouchNote CEO

As the ability to shop in physical stores was restricted over lockdown there was a boom in ecommerce, and especially in subscriptions. Consumers subscribed to food, entertainment and other ways of procuring and spreading joy to the point that in March 2021, one in five UK consumers had signed up to a subscription service that delivered goods to their door. Total retail subscriptions rose by a staggering 50% in lockdown, a main catalyst being to alleviate loneliness. 

For a while, subscription businesses were enjoying the increased demand. But now the world is opening up again, and consumers are free to visit physical stores, subscription businesses face the challenge of retaining the customers they earned in lockdown. But how? 

Create the wider experience

If everyone is offering a subscription service, how is yours different? This is the question subscription businesses grapple with on a daily basis. But the answer can be quite simple – make your product engaging through the customer’s experience with it. 

In conversations with friends, customers don’t just talk about the product they receive via a subscription, but the joy of ordering, receiving, or unboxing it.. It’s the end to end  process, from start to finish. For a subscription service, this can take the form of a recognisable box, some added extras each month, or even a wider unboxing video. For other services, the company may even organise events around the delivery each month – birchbox and their unboxings, Netflix hosting online premieres and many more.  

The end result is not just a product that a customer pays for and receives, but a wider experience of happiness, satisfaction, and appreciation for the brand. If we assume that all customers are considering a competitor, then we should always give them a reason to stay. Creating a wider experience around the product can do just that. 

Increase the value proposition

83% of subscription retailers have launched an average of three new subscription products, or services, since January 2021. At TouchNote, we’re one of them. Our gifting service, which combines our core card-sending subscription with an optional gift, was launched earlier this year, alongside a range of new services.  

Subscription businesses don’t just compete with each other, but with traditional retailers and other ecommerce outfits as well. To maintain consumer attention and loyalty, subscription services need to focus their attention on constantly evolving the service they provide to keep demonstrating value to consumers. With this in mind, new product offerings are essential. These new propositions should only focus on value to the business as a by-product, and be rather chosen for how they complement how customers already use the current offering. In particular, they should expand on those parts of the offer which your customer already engages with. 

It’s not easy, and it takes time. Most subscription businesses have launched three this year, but many more have been trialled, binned, or left at the drawing board. By getting in place the right process of research, plus trial and error, companies can ensure their service is worthwhile and avoid unnecessary churn. 

Talk to your customer

The relationship between a subscription service and a customer is unique, and in some aspects more challenging than that of a traditional retailer. Unlike traditional in-person retailers, the customer makes a consistent connection with the subscription service. Naturally, this leads to a higher bar for this relationship. 

To meet this higher bar, the relationship needs to be built on the foundations of communication and mutual understanding. Through your product, your overall brand and your marketing, you communicate your business to the customer. But how can companies ensure they’re communicating the right message?

The short answer here is feedback loops. Companies need to know who their customers are, what they like, and what they’re looking to get out of a subscription service. At TouchNote, we gather this information via app reviews, and our customer analytics partners. From here, we can understand what our customers are looking for, and build the service around them.  

Retaining subscribers isn’t easy, and none of the solutions here should be seen as a quick fix or silver bullet. An element of churn is inevitable for all subscription businesses, but that doesn’t mean companies can’t do their best to retain subscribers. 

If companies take advantage of developing new product offerings, creating a wider experience and developing an insightful, meaningful relationship with their customer, then the sky is the limit for their subscription service. 

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