Last modified: February 26, 2018
How companies are using subscriptions to increase brand value.
The subscription model is rightfully prized for what it offers brands: predictability, increased touch points with consumers, brand loyalty, recurring revenue, just to name a few. But not every company is extracting maximum value from their subscription offerings. The ones that are getting it right are using ingenuity and creativity to connect to customers on an emotional level. Here are five companies getting it right when it comes to subscriptions and the lessons other brands can learn from their examples.
Loot Crate offers customers a monthly box of figurines, apparel, and other collectibles related to gaming and pop culture. While they’ve found a niche catering to “geek” culture, Loot Crate’s real innovation lies in its element of surprise. Although customers can select themes for their boxes, they don’t choose the actual items they will receive. The excitement and experience of opening a surprise box each month creates a strong emotional bond with the product offering. It’s like having a birthday every month of the year. What brands can learn from Loot Crate:
- Cater to your niche. Loot Crate’s original offering focuses tightly on its gamer and geek audience, providing half a dozen products each month that will appeal to them.
- Create a brand experience. The connection to the brand extends beyond the box delivery date. Loot Crate’s experience empire now includes an app and social platforms fed by a team of designers, developers and writers who create custom content to reach fans every day of the month. Loot Crate’s founder Chris Davis told Inc. last year, “We think of ourselves now as more of a content and experience platform.”
- Build a community. Loot Crate subscribers use its social platforms to chat about the latest treasures to arrive in the mail, creating loyal fans who are engaged with one another as well as to the brand.
Despite best efforts from Amazon Prime, Hulu, and others, Netflix continues to set the standard for non-cable and non-satellite subscription TV and movies.
Its risky, but strategic move to develop original programs along with the expansion of its streaming service catalog has made variety and access its strongest offering. Netflix’s streaming service has added hundreds of titles since its launch, offering customers great variety and choice. Netflix has also developed extremely popular programming unavailable from any other outlet. In our fear-of-missing-out culture, that can be a powerful motivator for potential customers. By keeping price points relatively low, Netflix has created a subscription service that offers tremendous variety and access at good value for customers. Lessons for brands:
- Create original content. You don’t need to produce award-winning television shows to be a brand publisher. Crafting unique content can be as simple as developing social media campaigns that appeal to your specific audience.
- Leverage customer data. Netflix uses its customer analytics to make smart business decisions that will make customers more satisfied with its service, even using it to direct programming decisions, as this Fortune article outlines.
- Be accessible. Netflix makes it ridiculously easy to access its content, whether it’s on your huge home television or your little late-model smart phone screen.
Asos Premier is the U.K. clothing retailer’s answer to Amazon Prime, offering customers unlimited free next-day shipping. Brands should take note because the service not only adds value for customers, but it also helps build a pipeline of new customers for Asos. With a Premier membership, customers receive a year of free shipping at a price point that’s a fraction of Amazon Prime, giving customers good value for money. But the value to Asos is even greater. Customers are more likely to continue purchasing Asos products because they’ve already committed to Premier and want to get the best value for their money. Lessons for brands:
- Support your channel strategy. Asos uses its shipping strategy to keep customers coming directly to their website, meaning they can gather valuable data and control the customer experience.
- Personalise each visit. Asos uses the data it gathers to provide an experience for each customer that’s based on the type of shopping he or she does. For example, if you sign in using a social account like Facebook, Asos gathers key demographic info about you (such as your age and gender) and tailors your homepage experience accordingly.
- Control the experience. By keeping customers coming directly to their website, Asos is able to maintain its own digital storefront and ensure the backend provides an optimal user experience.
Birchbox offers customers monthly shipments of beauty product samples with the option to buy full-size versions of the products they like. Birchbox continues to focus on personalisation. The business has gradually evolved its selection process for products in each box.
Users now have more options for customising their boxes by selecting specific products. This combination of personalised service and customer control creates a strong relationship between the product and the customer that pays dividends in customer retention and brand loyalty.
Lessons for brands:
- Personalised products, with a touch of surprise. While customers are part of the selection process for what’s in their box by filling out their profile, there’s also an element of surprise when each box arrives, creating an emotional experience.
- Customer value. Once a customer decides to purchase the full size of their chosen product, shipping is free, adding a financial incentive to the process.
- Loyalty programme incentives. Everyone who orders is automatically enrolled in Birchbox’s loyalty programme, but if you spend a certain amount per year, you’re elevated to “Aces” status, providing further savings and incentives.
Grocery delivery has been around for years. But Hello Fresh differs by delivering pre-portioned ingredients and recipes to allow busy customers to make hassle-free, home-cooked meals. By incorporating offerings into customers’ daily lives, Hello Fresh delivers not only ingredients, but it makes an emotional connection.
- Deliver emotional value. By creating messaging that goes beyond the food, Hello Fresh addresses people’s deeper need forextra time to spend on othermore important things.
- Focus on brand loyalty. With fresh ingredients and a global recipe trove, Hello Fresh has garnered loyalty among customers who are concerned about nutrition and have a sophisticated palate.
- Make it easy for customers. From boxes that fit neatly into the refrigerator to flexible delivery options, Hello Fresh has made customer convenience a cornerstone of its subscription strategy.
We’re heading to SUBCOM East, March 12-13 in New York. If you’re attending, we’d love to discuss how you can renew your thinking about a subscription offering. To schedule a 15 minute meeting, email email@example.com.