With ongoing and predictable revenue for businesses and a fun element of surprise for customers, subscription boxes are becoming more and more popular.
There are now countless kinds, with huge ranges in price, frequency and included products. For myself, I’ve subscribed to a number of boxes and am trying to decide which one I’ll get next – Vynl, Bespoke Post and Carnivore Club are on my current shortlist. I love subscription boxes because I love getting high-quality products I wouldn’t normally get and you can’t beat the convenience.
But while there’s a solid and growing market for curated boxes for both practical needs and (less practical) wants, many struggle to get their great idea for a box into reality. If you’ve ever wanted to start a subscription box, here are 5 plans you will need to nail down before you get started.
1. A Product Plan
A successful subscription box begins with a great idea that meets a niche want, need or pain point. Define what you think your target market(s) might be and do your research to gather information on what the scale of possible opportunity might be. Would a luxury box work or would a bundled discount offer be better? Are there any social trends you should be aware of?
Compare your idea to what’s already on the market and how you could offer more value or leverage a new niche. My Subscription Addiction and Hello Subscription have good reviews, news and spoilers about existing subscription boxes. Familiarizing yourself with the industry will help you make informed decisions with what you offer customers.
2. A Marketing Plan
To be successful, you obviously need to attract customers. But for subscription boxes, there’s an added challenge – you also need to make sure you retain customers. So, your marketing plan needs to include strategies that both convince customers to sign up and keep them engaged.
To start, you need a mobile-friendly website with an optimized ecommerce checkout. More specifically, this means reducing clutter, lower load time, offering preferred payment methods, being upfront about the final price (including shipping and taxes) and having an effective “Thank You” page.
3. A Pricing Plan
The right pricing strategy for your subscription is critical to your success. If the box is priced too high, you won’t get any signups. If you price your box too low, you’re missing out on potential revenue.
There are a number of ways you can research what a good starting price would be. To capture a wider range of potential customers, consider tiered pricing options to more closely match the value customers perceive your subscription to provide.
4. An Inventory Plan
For many new subscription boxes, planning out the details of fulfilling box orders is the most complex challenge to overcome. From deciding what is going to be in a box to actual delivery to customers, there are a number of details to determine. Start by creating a timeline starting with when you want to ship to customers and work backwards through all the steps. Many companies allot several months for the process from start to finish. You need to account for product design, product acquisition from vendors, actually putting the boxes together and shipping time.
You can handle all of the fulfillment process yourself, or you can choose from a number of outsource options. If you are considering an outsourced option, make sure the solution you choose has reporting features for tracking product inventory and orders, and is able to be easily integrated in to your existing CRM and other systems.
5. A Retention Plan
For subscription programs, retaining customers is equally, if not more important than recruiting new customers. Subscriptions are about relationships, so it is important to make sure your customers remain engaged and happy. Back up your subscription service with excellent customer support and consistently engage with your subscriber base so that your most vocal customers become advocates for your brand.
One of the most welcome, unexpected benefits of subscribing to a subscription box service is the feeling of being part of a unique tribe. Leverage that unique experience to grow your subscriber base and attract new members to your offering by creating a community of subscribers beyond the delivery of your box.
Make absolutely certain that your ecommerce platform is a recognized and experienced recurring billing service. Chargeback management, dunning management and intelligent payment routing, up and downgrading, free trials and more are features that are not offered by all payment platforms. Choose wisely, check thoroughly.
Wrapping it Up: Plan for Success
Subscription boxes are fun and there are still plenty of opportunities yet to be tapped. Everyone loves giving and receiving gifts and the element of surprise from a well put together box will have customers coming back for more. With these five plans in place, your subscription box business is well on its way to realizing success.
Six Part SaaS and Subscription White Paper Series
- Building the Foundations of a Successful SaaS Company – DOWNLOAD
- The Pricing Challenge 1: Getting Started – DOWNLOAD
- The Pricing Challenge 2: Is the Price Right – DOWNLOAD
- The Pricing Challenge 3: Monitoring and Adjusting Your Price – DOWNLOAD
- Converting Trial Users into Paying Customers – DOWNLOAD
- Four Strategies to Increase Recurring Revenue – DOWNLOAD