Though subscription-based services are nothing new, they’re seeing a renewed rise in popularity with companies selling everything from razors to CRM software. One area that’s seen tremendous growth the past few years is the concept of subscription boxes, where customers receive a new box of goods in the mail every month.
Take Birchbox for example – the company sends a box of unique makeup samples for just $10 a month to more than 800,000 subscribers.
With success stories like that, more and more new companies are trying to cash in on the trend. But starting a subscription box service isn’t as simple as finding some interesting products and sending them out. Here are 21 things to consider when starting your business.
A special thanks to our friends at ChargeBee, a cloud-based recurring billing solution designed for subscription services that easily integrates with your website, for sponsoring the following tips for subscription startups about to go live.
1. Be unique
Why should customers subscribe to your service month after month? Do you offer something they can’t get anywhere else? Are your products hard to get elsewhere? The more unique and intriguing your offerings are, the more enticing they’ll be to potential users.
Additionally, if you’re selling products or services similar to another company, make sure to highlight your unique selling points and what makes you different from your competitors.
2. Set up sustainable processes
If you’re going to be sending out new goods every month to an increasing number of subscribers, you need to make sure your business processes are consistent, sustainable and scalable.
Take a look at your shipping model – will you be able to maintain it easily as your customer base grows? Will you be able to use the same process to pack and ship out even more boxes?
3. Get your website up ASAP
Even before you’re ready to launch, get your website up and start building buzz about your brand. It takes time to have your site indexed by Google and start gaining traction in search results, so get started early.
There are many different platforms that can be used for subscriptions businesses like Shopify, Bigcommerce, Magento, Woocommerce, Wix, Squarespace, and more. Make sure to read a few reviews so that you choose a platform that can be used for the long term as it’s not easy to switch once you get started.
4. Research the best pricing strategy
Pricing can be a tricky business, especially wen you’re just starting out. You don’t want to overprice your box and discourage potential customers, but price too low and you won’t turn a profit. Begin to find your pricing sweet spot by figuring out your fixed and variable costs and observing what your competitors are charging for similar packages.
5. Automate billing
With a recurring revenue model, automatic billing is crucial. Fortunately, services like ChargeBee make billing hassle-free. ChargeBee provides versatile integration options and takes care of PCI DSS compliance needs & provides an automated framework to scale the subscription business.
6. Count on convenience
Part of the subscription box appeal is the convenience it provides to customers – instead of going out to the store for something the often run out of they can get it delivered directly to their doorstep or instead of spending time searching for the next cool things they can be surprised with new goodies month after month.
7. Plan out your product
A lot will need to go into planning what products make it into your box. Even if you’re sending out the same goods that get used up each month, your customers will get bored if they’re package is always the same. Start planning your product months in advance to ensure you have high quality goods to offer and enough time to source and package them.
8. Clarify your main messages
Just because you know what you’re offering is unique doesn’t mean potential customers will easily understand the value to them. Make sure the messaging throughout your website, social media and other marketing materials is crystal clear highlighting what you offer and why customers will want to receive your product again and again.
9. Test out shipping options
Along with your product, shipping will be a major expense and even saving a few pennies on packaging and shipping can significantly affect your bottom line as your list of subscribers grows. Take time to research and test different fulfillment, packaging and shipping options.
10. Set different membership options
Reach a wider audience by offering different subscriptions levels. Perhaps you let users subscribe for different amounts of time or offer a standard and premium level of goods set out each month.
11. Streamline shipping
As your users increase so will the time spent on packaging and shipping your boxes. Consider using a shipping management program or fulfillment center to streamline shipping and make sure nothing is forgotten.
12. Always have a backup
Don’t get stuck with missing product or a supplier that pulls out of the deal at the last minute. When planning or product, always have a couple backup alternatives to fill in if needed.
13. Encourage word of mouth
Encourage subscribers to share your business with their friends through referral incentives, the ability to invite others to join the service, or sample products to share and hook new customers.
14. Build buzz on social media
Since you need your customers to keep coming back, try connecting with them in different ways to build a strong relationship. Using social media is a great way to connect with your users with different mediums. Choose 2-3 of the platforms that best fit your business and audience and start interacting!
15. Make customer service a priority
Though customer service should be a priority for any business, it’s particularly important when you’re needing your customers to come back month after month to sustain your revenue model.
Invest in your customer service plan, process and resources from the beginning to ensure customers have an easy time reaching the company and receiving help.
16. Get your company listed
With the popularity of subscription boxes also comes competition and a crowded marketplace. Especially starting out, you can use all the help you can get spreading the word about your new business. Along with staying active on social media, also ask to get your company listed on sites like MySubscriptionAddiction or betali.st to get infront of more potential users.
17. Concentrate on quality control
Today’s savvy consumers won’t stand for staying in a subscription that sends them low-quality goods. Place a high importance on quality control and don’t stoop to sending out products in poor condition.
18. Give a guarantee
Additionally, consumers can often be wary of agreeing to a long-term subscription…what if they don’t like it or decide the products just aren’t for them? Give potential customers peace of mind by offering some sort of guarantee.
19. Make it easy to subscribe…and cancel
Not only should your service provide convenient products to your customers, it should be easy and convenient to sign up or cancel as well.
While it may seem counterintuitive to make it simple for your customers to cancel their subscription, you’ll earn their trust but not making them feel stuck in a contract they don’t want to be in. Plus, if you’re providing a great service, they won’t want to unsubscribe anyway!
21. Offer incentives
Hook first-time subscribers with incentives that they can’t refuse. Consider offering a free gift when they subscribe or a discount when they pay for multiple months upfront.
22. Keep it fresh
Everyone loves to receive mail – make sure your customers continue to look forward to your packages by keeping them fresh and interesting, whether that’s with unbeatable products, personalized notes or simply attractive packaging.
Looking for even more tips? Take a look at our startup checklist designed for any type of company about to launch.
What did we miss? Let us know via Twitter 🙂