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How to Build a Successful Shopify Subscription Brand
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How to Build a Successful Shopify Subscription Brand

Everything you need to know about subscription models for your Shopify DTC brand.

If you're thinking of starting a Shopify subscription ecommerce brand or aiming to make your existing one more successful, keep reading. We'll share tips on how to build a thriving subscription business.

What is Subscription eCommerce?

Subscription eCommerce is a business model in which customers pay a regular fee to have access to a range of products or services. Typically, subscription businesses offer a wide variety of products or services that are selected and delivered regularly, ensuring that customers always have the product they need at their fingertips. Subscriptions can be successful in a variety of industries such as food & beverage, cosmetics, health & wellness, pet food, CBD etc. 

The subscription model has become increasingly popular thanks to the ease and convenience it offers customers. Because subscription services typically operate on a recurring billing system, there is no need for customers to go through the hassle of making new purchases each time they need something from the subscription service. Additionally, subscription services often offer discounts and special deals for those who sign up for long-term memberships. Overall, the subscription model is an efficient and effective way for businesses to provide value to their customers while satisfying their bottom line. 

Types of Subscription Models

In a subscription-based business, the subscription can be for a fixed term, such as a year, or it can be open-ended. There are several different types of subscription models, including finite, prepaid, gifting, sequential, and standard. Let’s discuss the different types.

  • Standard Subscription:  This model is the one you're most familiar with where a Shopify merchant offers a product or service every week, month, or year for a recurring fee.
  • Prepaid Subscription: A subscription model that enables Shopify merchants to generate upfront revenue for a set time period.
  • Sequential Subscription: Shopify merchants can offer a bespoke sequence of products, prices and/or gifts (ex. refills) after a certain number of deliveries with this model.
  • Finite Subscription: In this subscription model, a merchant sets a subscription end date after a certain amount of time or use to encourage shoppers to gift a subscription for a certain number of billing cycles.
  • Build a Box Subscription: Here, Shopify merchants offer customers the option to continuously curate a recurring delivery of products from your Shopify store. 

Benefits of a Subscription Model for Your DTC Shopify Store 

  •  Predictable Revenue: Recurring revenue from subscription models can be a great way to generate predictable, long-term income for your business. In a subscription model, customers pay a recurring fee to access your product or service on an ongoing basis. This means that you can count on a certain amount of revenue each month, making it easier to forecast your finances and plan for future growth.
  • More Cash on Hand: A subscription-based business model is one in which customers pay a recurring fee for access to a product or service. This type of business provides a steadier stream of revenue than one-time purchases. This can translate into having more cash on hand to reinvest in the business.
  • Lower Customer Acquisition Costs: There are several ways to lower customer acquisition costs, and subscription models are one of the most effective. By switching to a subscription model, businesses can encourage customers to keep coming back, which can help to reduce costs over time.
  • Customer Loyalty: Not only do subscription services tend to cost less than traditional one-time purchases, but they can also help build customer loyalty. By giving customers the ability to access a wide range of products on an ongoing basis, subscription models create a sense of convenience and familiarity, leading to long-term engagement.
  •  Cross-Selling and Upselling Are Easier: When it comes to subscription models, one of the main benefits is that it makes cross-selling and upselling much easier. With a subscription model, customers are typically billed monthly, which means that companies have a constant stream of revenue coming in. This makes it much easier to offer additional products and services to customers, as there is less risk involved. For example, if a customer is already paying for a subscription to a particular service, they are much more likely to be interested in purchasing additional features or upgrades.

Building Brand Loyalty

Subscription models create a strong sense of brand loyalty, as customers are more likely to continue using a service they are already paying for regularly. As such, subscription models can be an effective way to build brand affinity.

  • Create a program strategy that focuses on customer service at the core of it
  • Reward your customers for writing reviews and referring friends and family
  • Reward your customers for positive brand experiences
  • Provide transactional and experiential rewards for the most profitable customers to acknowledge their actions that help in building your brand

Tips for Running a Successful Subscription Business

A subscription model business is a win-win for both the customer and the company. The customer gets a service or product they love at a price they're happy with, and the company receives a recurring revenue stream that they can count on. However, running a subscription business is not without its challenges. Here are some tips to help you run a successful subscription business:

Create an easy-to-use customer portal

A customer portal is an essential tool for any business. When designing the self-service dashboard, make sure it includes product documentation, shipment tracking, and other resources so customers can find what they need with one click!

Keep up with your customers

Here are some easy things we recommend doing. A great way is by creating a welcome email for new clients or keeping track in real-time through social media posts every few weeks (or more). You should also send emails for birthdays and a company newsletter.

Have clear business goals

The best way to choose a business model is by understanding your goals. Whether you are looking for revenue, customer acquisition, or the number of units sold, you must make decisions with your goals in mind.

Focus on Customer Retention

You must track reasons customers churn so you can create a solid customer retention plan. It is much cheaper to keep customers than to go out and get new ones. A loyal customer base is very valuable to a business.

Prioritize Personalization

Customers expect personalized subscriptions to become even more tailored over time. 28% of curation subscribers said a customized experience was the most crucial reason they continued subscribing.

 

Key Takeaways

If you’re on the fence about starting a subscription-based business, hopefully, this article has helped sway you in that direction. There are many benefits to reap when running a subscription company, but chief among them is predictability. With a loyal customer base who loves your product and service, you can generate more cash flow and spend less to acquire new customers. Making upselling and cross-selling easier is another perk of having a subscription business model. So, what does it take to build a successful loyalty program within the subscription-based model? Creating a program strategy that focuses on customer service at its core is key.

If you want to start building your subscription business, our team at Smartrr is here to help. We have years of experience in the subscription business and can guide you through the process of starting your subscription business and being successful with it.