Subscription Commerce Do’s and Don’ts for Small Businesses

Date posted: June 10, 2015

By Tom Caporaso

Subscription programs now serve almost every consumer interest, from groceries and entertainment to transportation, personal care, software, and more.  The growth of subscriber services has been mirrored and often powered by the growth of e-commerce, which gives people instant product information and the ability to make purchases around-the-clock.  As shoppers receive quick, easy access to more and more items and services, they come to expect that kind of convenience across an ever-wider range of needs and interests.

As a small business owner, you can create a subscription program that gives customers ongoing access to savings on the products, services, and advantages your company offers — and enjoy certain rewards in return.  However, you can’t achieve the results you want via a simple plug-and-play approach.  To succeed, your program will require continuous attention and information-gathering, and you’ll have to be willing to change and adapt as circumstances dictate.

Here are a few do’s and don’ts designed to ensure that your program delivers the results you desire.

Do:

  • Align your program with your larger company goals.  A subscription program isn’t an end in itself.  It’s a means to a larger end, a supplementary tool in your overall effort to grow your company.  You therefore need to make sure your program furthers one or more of your company’s primary aims.  If you’re hoping to increase revenue, your benefits must drive more and/or larger sales.  If you’re trying to grow your audience, the benefits have to augment your existing offerings by appealing to a wider range of people.
  • Collect and analyze as much data as possible.  E-commerce allows companies to gather more information about their customers than ever before.  Use this opportunity to keep learning as much about your program subscribers (and your larger audience) as possible — their shopping habits; the points at which they abandon their carts; the deals that trigger responses; and all of their other actions.  Subscribers are typically your best customers; finding out what moves them (and what doesn’t) will help you hone your pitch to and services for other shoppers and thereby increase their loyalty.
  • Test every component of your program, over and over.  Successful online loyalty programs take a variety of forms, but they all share one trait:  They continually test every program element, from copy, images, and layouts to transaction steps, email campaigns, customer service responses, and much more.  As you measure the results, stay focused on the bigger picture.  If a new acquisition banner generates more clicks but doesn’t beat the control banner on actual join rates, stick with the control.

Don’t:

  • Set it and forget it.  Companies that don’t adapt lose ground to their rivals; the same is true of subscription programs.  People naturally change over time, and if your program doesn’t stay relevant to your subscribers, you’ll lose them.  Together with a close examination of consumer, market, and cultural trends, your data collection, analysis, and testing will keep you up-to-date on your specific audience’s needs and interests.  Use this knowledge to constantly refresh and adjust your program benefits and services to meet their evolving desires.
  • Use a “one size fits all” approach.  One of the benefits of e-commerce is the amount of information you can now gather on individual shoppers.  Develop detailed profiles of every subscriber, and personalize their experiences according to their proven interests and behaviors; e.g., alert individual subscribers whenever their favorite products go on sale, and sprinkle tailored reminders throughout their site visits.  Today’s consumers expect retailers to remember their preferences; your membership program can and should take full advantage of those expectations.
  • Exceed your limitations.  This applies in two ways.  First, your program should highlight your company’s strengths rather than venturing outside your core competencies.  A bicycle store’s loyalty program might rightly offer savings on spring tune-up needs; it shouldn’t delve into, say, discounts on fraud protection services.  Second, many small business owners (understandably) lack experience in subscription commerce.  Working with outside experts can help you avoid common pitfalls, save time and money, and concentrate on what you do best.

As a small business owner, you know how important it is to please your customers.  The growth of subscription programs across the e-commerce landscape demonstrates how effective they can be at satisfying the wishes and demands of today’s consumers.  Building an effective, enduring program is a challenge; it requires, among other things, an ongoing commitment to data collection, analysis, and testing, as well as a willingness to embrace change.  If you do it right, though, you’ll give your customers exactly what they want and thereby help ensure your company’s continued success.

Tom Caporaso is the CEO of Clarus Commerce, a recognized leader in e-commerce and subscription commerce solutions.  Among its various properties, Clarus Commerce powers FreeShipping.com, the pioneer of the pre-paid shipping and cashback movement.  ClarusCommerce also customizes and manages programs, such as Return Saver, which it co-developed with FedEx, and 2-Day Shipping by MasterCard, for clients across a wide range of industries.

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