How to make a subscription work for almost any business
The subscription economy has already been changing the way people shop, but today it's also helping businesses of all kinds generate recurring revenue after social distancing protocols uprooted their usual selling channels.
This offers a great opportunity for almost any business not just to survive during the pandemic, but also create new, stable income streams going forward.
As you'll see, subscriptions can work for stores of almost any size and industry, from ice cream shops, to local amusement parks, to independent coffee roasters.
We get it might be hard to wrap your head around this if you're in an industry that isn't typically associated with subscriptions. So below, you'll find ways to address several common objections that might come to mind when considering adding a subscription to your business. Hopefully this will inspire you to start making your own plan for a recurring revenue model.
Objection: I sell more of the buy-once, love for a long time type products
Even if you're selling products that don't need to be refilled or replaced regularly, there are still ways to improve your customers' experience with a subscription. Here are a few examples:
Solution: Provide ancillary products
Click & Grow knows that people don't need one of their indoor gardens delivered to them on a regular basis, so instead they offer plant pods and seeds as a recurring order so customers can keep growing and experimenting with different plants.
They could also offer things like fertilizer, and then email their subscribers with offers for add-on items. These could be new products people can add to their gardens, like heat lamps, automatic misters, timers, specialty spray bottles, and so on.
If you sell athletic footwear and apparel, you could offer a subscription that helps people get more use out of your products.
- Try a recurring products subscription by offering quarterly shipments of a shoe protectant spray.
- Offer exclusive benefits to subscribers like a digital membership to online exercise routines.
- If you have a brick and mortar store, offer a club that gives subscribers access to special in-person events at your store.
And let's say you sell kitchen appliances. You could also offer up a subscription that helps people maintain the products they use every day.
- Replacement filters for fridges' built-in water dispensers.
- Special cleaning wipes for stainless steel appliances.
- Disposable oven liners.
All of this will help you not only generate recurring revenue, but help your customers get more out of your products and appreciate you for the helpful service.
Objection: People don't want a stockpile of what I sell and would probably churn fast
This is another natural objection if you don't sell a product that needs to be replaced or refilled regularly. However, there are still ways you can generate recurring revenue from customers in an engaging way.
Solution: Offer a curated box
Try offering a curated box that works with the lifestyle and interests of your customers instead of offering your standard products at a recurring interval.
Athletic and yoga apparel brand Niyama Sol does this well. They know customers might not need their leggings delivered every month, so they give them the option between a monthly, bi-monthly, and quarterly subscription that also includes other lifestyle products from partner brands.
So even though leggings don't necessarily need to be replaced as often as something like coffee or make up, Niyama Sol knows their target audience wouldn't mind a new pair every so often — along with additional lifestyle items from curated brands.
Letting customers decide for themselves how often they need more products can also reduce churn. Niyama is getting exposure to new customers in their target audience by partnering with brands they include in their curated box.
Objection: My products are too expensive to subscribe to
This is an easy assumption to make, but you never know until you try. And if it succeeds, you'll get rewarded every month in the form of recurring revenue.
If you test it out and there's genuinely no interest, there are other types of subscriptions you can offer up that will not only generate revenue, but help you build stronger relationships with your customers.
Solution 1: Explore if customers are interested in subscribing
The first step is to discover which products customer might be interested in subscribing to. You can use Bold Brain to determine what people are buying on a recurring basis (at least once every 90 days) regardless of price.
Once you have candidates, fire out an email to a section of your email list asking if they'd be interested in signing up for a subscription. If there's a positive reception to the idea, you know that a subscription might have potential.
Solution 2: Offer a membership-style subscription for exclusive benefits
Just because your customers don't need your product on a regular basis doesn't mean they won't be interested in other perks you could offer.
This is called an exclusive subscription, and it gives members access to exclusive benefits like members-only discounts, shopping events, free shipping, and anything you can imagine.
As much as The RealReal's knows customers might want a luxury handbag shipped to their house every month, they also know it's not a one-size-fits-all type industry. So instead, they offer a membership that gives subscribers early access to their consignment items, express shipping, and more.
Exclusive subscriptions are actually a great churn-buster for almost any subscription type. If people are using multiple benefits, they have more reasons to stay subscribed. Learn more about adding exclusive benefits in our ebook, 7 Subscription Models to Master.
Objection: The subscription box industry is too saturated with big players and I won’t be able to compete
This can be a legitimate concern, but if you have a loyal fan base or a well-established brand, you probably have customers who would be excited to sign up for a subscription you offer.
Solution: Offer a monthly box with your product, plus related products from other brands
Offer up a selection of products that don't compete with you, but still complement your primary product. This will also expose you to other brands' audiences.
For example, if you sell beverages like coffee or tea, why not send out a monthly box with early access to a new flavor along with products from other brands, like magazines, biscuits, specialty brewing tools, recipes, and other complementary products.
You could also look at Niyama Sol above for a great combination of a monthly club that sells their signature apparel, along with a selection of lifestyle products from other brands.
Even a local bookstore could offer a ‘book of the month’ club and potentially unite local book lovers with a Facebook community. It’s okay to think small — subscriptions don’t have to be (and shouldn’t be) for everyone.
If you have a following, people might be willing to pay a premium just to get a monthly shipment of some products you endorse.
Brigette Brianna does this with her Sexy Modest brand, and even though people might be able to get the products from her subscription box elsewhere, it's the act of bringing them together into a one-of-kind experience that her followers appreciate.
She does a good job of showcasing the love people post on social media for her subscription, leveraging peer recommendations.
Objection: I'm mainly a brick and mortar business and it would be hard to ship my product
Buying local doesn't have to mean buying in store. You don't have to be shipping your products over thousands of miles to be in ecommerce; you probably have local customers who would be willing to subscribe to your product, making it easier to launch your service.
Solution: Start a local recurring replenishment subscription
If you sell anything that needs refilling, you can serve local customers better with a recurring product subscription, or even a monthly club.
Take Chaeban as an example. Before they launched their subscription, the artisanal ice cream shop's revenue depended almost entirely on summer foot traffic. So when COVID forced them to close, they had to innovate.
Their build-a-box subscription allows members to pick flavors of their choice for monthly delivery. This is a great example of how a brick-and-mortar business can serve their local customers and earn stable income from a traditionally seasonal business.
Other similar examples include Kathy's Table, who serve up special dietary meal kits in and around Jacksonville, Florida, and General Assembly Pizza, who take delivery to the next level with a recurring frozen pizza subscription in the Greater Toronto Area.
Objection: It’s not profitable to have recurring orders for my products
Having products that would be expensive to ship as a recurring product subscription can still be profitable if you frame that experience in a way that people see as valuable, so you can charge enough to cover your costs and make a little money.
Solution: create an experience that people will pay for
Let's take potato chips as an example. It would be hard to profitably ship a $5 bag of chips, so instead offer up a build-a-box or monthly club with sample flavors, or advance access to new flavors for $15 a month.
Your fans will probably be interested in paying a premium for an exclusive experience like that.
You could also do a curated box that's a mixture of a monthly club with some of your products, plus a selection of products from other brands.
I’m part of an industry with restrictions
This can be a bit scary to navigate, but there are still ways to serve customers. Plenty of businesses in cannabis and liquor are doing a great job at subscriptions without getting into any trouble.
Solution: Use age verification apps
As long as you're following the regulations in your region, there's no reason you can't still serve your customers with recurring order of products they love. And don't forget that all seven subscription models can still apply to these industries.
There are wine clubs, recurring micro-brewery deliveries, curated cannabis boxes, and more. As long as you're confirming the age of subscribers, you have the opportunity to make recurring revenue in a way your customers will love.
Subscribe to subscriptions
In today's climate, you need to future-proof your business. Even if you just serve a local market or niche audience, subscriptions can still generate stable recurring revenue to help you not just survive, but also scale. Start planning your service with our ebook, 7 Subscription Models to Master.
It's packed with real-life examples, tips, and other content to inspire you to create an awesome subscription service.
What do you have in mind? Let us know in the comments below!