If you’re an e-commerce entrepreneur, you’ve probably kicked around the idea of starting a business with a subscription club model. Why not? Subscription clubs are everywhere: Cooking clubs, shaving clubs, underwear clubs, makeup clubs. There’s a good chance most of us have been a member of one now or have tried one before. Subscription clubs are clearly popular, but how can a company capitalize on that popularity?
My name is Mark Stallings and it took me over a year of exhaustive research before I launched Casely, the world’s only subscription club for phone cases. Here are some of the major factors we considered and steps we took before launching Casely, which may help others lay the groundwork for building a successful subscription club.
Find the right product
Creating a successful subscription club isn’t as easy as picking a product and letting people sign up to receive something every month. It is vital to choose a product that the end customer will always want or need. Think about the subscription clubs I listed above. They’re all goods that you have to buy semi-regularly. Good subscription clubs work because they help people conveniently buy things they’re already buying.
You don’t have to buy a new phone case regularly (unless you’re really clumsy). So how does Casely work as a subscription club? It works because it solves a problem for a certain type of consumer. When I was researching the phone case market, I studied 20,000 Instagram accounts for a year and found that people were curating “phone case wardrobes” to match their outfits. Phone cases aren’t strictly necessities, but we identified a specific and scalable market for them. Identifying a niche and providing a quality service for that niche will help companies stay relevant if the market becomes oversaturated or if direct competitors emerge.
Solve a consumer’s problem
Everybody may need or want a product, but companies need to give consumers a reason to buck their conventional shopping process. Oftentimes, this means offering a high quality item for a lower cost. Based on our research, people were clearly ready and willing to buy phone cases on a semi-regular basis as a fashion statement. However, they were spending $40-60 per case. The goal with Casely was to help those consumers keep their phones fashion-forward without breaking the bank, by offering them a new stylish case every month for $15.
If companies can’t offer a product at a lower cost, an added value that is completely unique must be provided. Cooking clubs are great examples of added value in subscription clubs. A consumer can buy groceries at the store, but cooking clubs add value by offering meal plans, plus the tools and instructions to make a gourmet meal. The chosen product doesn’t have to be a necessity, but it does have to have a market and the subscription club has to give consumers a benefit they don’t get from their conventional experience shopping for that product.
Lay the groundwork
After the product and business model are in place, the building blocks of the operation need to be constructed. The systems that run a subscription club are arguably as important as the product because they ensure a good customer experience that will help business grow. These include software, customer service, manufacturing, fulfillment, marketing and more. A great idea for a subscription service is no more than just a great idea until it is backed by a well-oiled operation. Think about the best subscription clubs. Joining is probably as easy as clicking a button and so is canceling. Products arrive reliably, safe and on time. Customer service helps consumers without fuss if there is ever an issue. There isn’t a magic sauce for creating a good operation, but it requires diligence and care. While a great idea might deliver a few quick sales, a well-constructed system is what ultimately boosts reviews and gives a business staying power.
Conclusion
Subscription clubs are popular, but that doesn’t mean they’re easy. Creating a subscription model that works takes patience, diligence and humility. Just like any other business, you have to be accepting of the idea that the first model you put together might not be viable and you have to be willing to put in the time before you go to market. However, when you commit to the research, pick the right product and have all your logistical ducks in a row, the subscription club model can be a great way to separate yourself from your competitors.
Mark Stallings is the CEO of Casely, an online tech accessories retailer specializing in stylish phone cases. Casely offers the world’s only phone case subscription club with cases for every size of iPhone, as well as select Android devices. @Get.Casely
Subscription stock photo by This Is Me/Shutterstock
