Subscription Commerce: Setting Up Consistent Revenue Streams with Online Selling

Subscription commerce is a system within which sellers provide products or services to customers regularly. Building an eCommerce subscription platform can be highly beneficial for online entrepreneurs, as it essentially creates a long-term, consistent stream of revenue from each subscribed customer. Similarly, it allows brands to set up more predictable production or service schedules based on their customer base.

With the rise of cooking kit brands, SaaS companies, and streaming services, subscription-based eCommerce platforms have never been more common. We’ve put together this blog to give a basic overview of subscription eCommerce models, so you can feel more confident approaching it as a system for your business to operate through. 

Benefits of Subscription Commerce

To many, the subscription-based business model is the most attractive way to establish reliable revenue streams within a brand. ECommerce Subscriptions are more common in service provision than in the selling of consumer goods, as online tools or digital services require regular updates and maintenance, while also using data and energy to remain active. 

There are a multitude of reasons that the subscription business model is attractive:

Predictable Revenue Streams: Setting up predictable revenue streams with subscription models is an effective way to establish a sort of safety net for your business, ensuring you have a reliable sense of what you might make from month to month. This increase in regular cash flow allows for more planning, reduced dependency on one-time sales, and an increased valuation.

Increase Customer Lifetime Value: The CLV is the metric that indicates the amount of revenue that a business can generate off of one customer throughout their experience with the brand. By establishing a subscription platform, the CLV of each customer is likely to increase, especially those that stay subscribed for longer periods. 

Some notable businesses leveraging subscription models include: 

Streaming Services: Netflix, Amazon Prime (also retail delivery), Disney Plus, etc. 

SaaS Companies: HubSpot, Semrush, Adobe, etc.

Recipe & Kit Subscriptions: HelloFresh, Bespoke Post, Dollar Shave Club, etc.

This range of companies showcases just how many different angles there are for a subscription-based business model, with each of these brands building strong relationships with their customers and growing in popularity all the time. 

Strategies for Attracting Subscribers

While there are huge benefits to running a subscription-based eCommerce business, the hardest part can be attracting subscribers. Much like in the case of selling a consumer good, it’s all about communicating a clear value proposition to your target audience. 

However, the difficult thing about a subscription model is that you’re not just convincing a customer to make a one-time purchase – you’re asking them to part with money regularly. With this in mind, it's important to offer something unique and essential to ensure that they feel happy to subscribe.

Personalized & Tailored Experiences: When someone signs up for a business as a subscriber, they’re essentially volunteering themselves into a relationship with said business. That’s why it’s important to provide subscribers with personalized, tailor-made experiences. This could come in the form of recipe recommendations, curated playlists, or regular service calls to optimize software performance. 

Creative Pricing Strategies: Offering a range of different pricing options is a great way to attract subscribers. For example, some services offer discounts for longer subscription periods, e.g. a 30% overall discount for a year’s subscription rather than month-to-month. In the case of consumer goods, like toilet paper or dishwasher tablets, a rolling discount can be offered to inspire a subscription.

By providing a uniquely tailored experience along with a flexible pricing model, you’ll have a much better chance of capturing the attention of potential subscribers. This, of course, needs to be matched with a stellar product, strong marketing, and an airtight brand identity to ensure maximum efficacy. 

Retaining Subscribers in a Competitive Market

Now, while attracting subscribers is vital, it’s retaining them that allows for the benefits of subscription commerce models to be felt by businesses. Convincing subscribers that your service is worth paying for consistently will make all the difference, with providing a positive customer experience being the core of this principle. 

Some effective subscription retention strategies include: 

• Personalized Communication: Tailoring communications with subscribers based on their behaviors, purchasing history, and preferences will help them feel more valued and strengthen their overall relationship. 


• Exclusive Content and Offers: Offer subscribers exclusive content, early access to new products, and specialized discounts to make sure they feel valued above the general customers. This creates a sense of exclusivity and added value. 


• Flexible Subscription Options: Providing flexible subscription options isn’t just about attracting customers, it’s also useful for allowing customers to take additional control over their membership by accommodating their preferences. 


• Continuous Value Addition: Just because they’ve subscribed doesn’t mean it’s time to stop impressing them. Make sure to regularly update and enhance your subscription offering so they feel less inclined to cancel. 


• Engagement and Community Building: Social media groups, online forums, and exclusive events are all valuable ways to enhance the bond between customers and the brand – genuine engagement is vital to building loyalty. 


• Customer Feedback and Support: Businesses can demonstrate a commitment to customer satisfaction by regularly going to customers for regular feedback and proactively addressing it with adjustments and discussions. 


• Reactivation Campaigns: Keeping inactive subscribers in the loop with targeted reactivation campaigns can be useful for winning back lost customers. With this, businesses should provide incentives, discounts, or special offers. 

By experimenting with these techniques, finding the right combination of them, and regularly optimizing them based on results, businesses can effectively employ a subscription model. Minimizing churn and continuously building a base of loyal, happy customers is a surefire pathway to reliable, consistent revenue. 

Conclusion

Building a subscription commerce platform can be a hugely profitable endeavor if approached properly. By creating a growing base of loyal paying subscribers, brands can generate revenue and expand their operations consistently, without nearly as much reliance on one-time purchases. However, it’s worth noting that more businesses than ever before are looking for subscribers, meaning it’s more important than ever to offer something truly unique and constantly improving. 

If you’re interested in building a subscription commerce model for your own business, there’s no better location to visit than this year’s eCom Business Live. This event is a massive convergence of eCommerce professionals and service providers, ranging from web solutions to cyber security experts. With a wide range of expert seminars, hundreds of exhibiting businesses, and endless professional conversations to be had, it’s THE essential event for eCommerce professionals.

Register for your tickets here today and check out our blog for more insightful pieces like this.