Reinforcing the ‘member mindset’ and understanding the value of subscriptions
This is the third in our 10-part Beyond the Product subscription series. In our next chapter, we’ll discuss what the best brands will be doing to upsell-cross-sell, and upgrade subscribers in the coming year, and what those strategies could ultimately mean for the bottom line.
When businesses develop a “member mindset” and add subscription solutions to their online stores, they can level up customer relationships while also guiding them towards memorable experiences they can return to again and again.
That was one of the key takeaways shared by Robbie Kellman Baxter, author and expert on subscription services, during an episode of the Own Your Commerce podcast hosted by Jay Myers, co-founder of Bold Commerce.
How can businesses leverage the power of onboarding? Why does working backwards help fight churn? And what is the biggest facepalm moment for subscription-friendly brands? Baxter answered these questions, and many more, in an engaging discussion that touched on vital factors for subscription success in the digital age.
The member mindset approach
Subscriptions should be top-of-mind for brand owners seeking recurring revenue and strong customer loyalty, as a Bold Commerce white paper noted. In a survey of more than 8,000 brand managers, 71% said they view subscriptions as important or extremely important to the health of their business.
Baxter notes in the episode how establishing a “member mindset” within an organization is practically essential these days because that approach says, “I'm going to have a long-term relationship with this customer because I am going to solve an ongoing problem for them or help them achieve an ongoing goal and I am going to continue to layer value in and evolve my offering to deliver on that goal to the best of my abilities.”
Going that route could also boost the valuation of a business seeking acquisition, according to John Warrillow, creator of The Value Builder System. “The more guaranteed revenue you can offer a potential acquirer, the more valuable your business is going to be. Because a high percentage of the revenue of a subscription-based business is recurring, its value will be up to eight times that of a comparable business with very little recurring revenue.”
Adding subscriptions to an online store seeks to solve a customer’s pain point…or rather, it should, Baxter stresses. When discussing how she avoids shopping for clothes as much as possible, she says, “If the right clothes for the occasion magically appeared in my closet just in time, I would pay a huge premium for that on an ongoing basis forever.”
How does Bold Subscriptions work for various brands? Find out more in this case study of Sitka Salmon.
The importance of onboarding
Leaving onboarding as an afterthought can be a dangerous mistake, says Baxter. Making it easier for visitors to your site to join should be prioritized and fine-tuned.
“When you have a brand new customer that is paying attention to you in that moment, there is a half-life on enthusiasm, so you want to take that moment when they're considering your business and your product and remove all friction and give them a great experience, which most companies try to do,” Baxter says.
Onboarding effectively also requires brands to lay out the appeal of joining as a member upfront. Subscription brands should focus on guiding them and “surfacing the features that they're entitled to, and it's about saying do you know that now that you're getting our dog food every week, do you know you're also part of the dog food community and there's a special area for people with puppies? Did you know that we're going to meet at such and such a dog park in your community? It's about making sure that they're getting the value that they're paying for.”
Battling customer churn by working backwards
Brands that aren’t tracking customer churn may find it difficult to know if their subscription program is healthy, as a Bold Commerce post noted, and Baxter reveals a valuable method to combat that ecommerce scourge: work backwards to determine what is driving that churn.
She likens the idea to a house party where she’s heard every band, tasted all the food and sipped all the drinks and she’s on the prowl for something novel. Applied to a subscription brand, “I've used up the membership, so then what you need to do is you need to expand what you offer. There are so many ties one Dad can wear, I've just had enough. I am maxed out. Maybe you should give me socks now, maybe you should give me cuff links, but the tie department is all full.”
That’s the equivalent of enjoying the idea of the party, but the bar sported long lines and the dance floor was too crowded. “That's a product problem as well, but it's more of an operational issue,” Baxter says, “so you might have an operational problem. Working your way backwards, a lot of the problems come in to what I think of is that onboarding phase, or failure to launch is what lot of people say.”
When brands fail to reel in visitors during that onboarding process, reaching their KPIs as a subscription business can be even more difficult.
If you’re interested in discovering how Bold Subscriptions can work for your brand, go here to learn more.
A terrible idea? Hiding the cancel button
One of the most egregious mistakes a subscription brand can make is hiding the “cancel subscription” button. “People feel really cheated when that happens,” Baxter says.
Don’t be sneaky about it, either, she advises. “You can't have silver font on a gray background in eight-point font telling people what they need to do to cancel.” That kind of camouflage will only irritate customers and bruise brand loyalty, she adds.
Want to keep the conversation going?
Tune into the full episode for a comprehensive discussion on subscription services and products, strategies to strengthen customer relationships, and leading practices on offering free trials, with an established expert in subscriptions for businesses, Robbie Kellman Baxter.