Subscription Programs: From Transactions to Relationships

With the U.S. seeing the equivalent of 10 years of growth in just three months during 2020, merchants are struggling to differentiate themselves with their ecommerce strategy. In so doing, they’re finding that traditional transactional strategies no longer meet customer expectations. They not only want more value; they expect convenience and an exceptional experience every time they interact with a merchant.

To meet these expectations, and stand out from the competition, merchants must establish themselves as an indispensable part of their lives. With this in mind, building relationships is key.

One strategy to build effective customer relationships is to integrate subscription programs into an ecommerce offering. Just like any personal relationship, providing clear, consistent communication and establishing trust can demonstrate that merchants truly know a consumer. By delivering personalization, convenience and cost savings through subscription programs, you can create an affinity for your brand and authentic connections.

Use Data to Personalize the Experience

One important step to build relationships with consumers is to understand their behaviors and personalize their shopping experience. This might look like matching customers with the right products based on their subscription purchase history. For example, if a shopper has a subscription for low-fat dog food, recommending dog treats that are also low in fat increases the likelihood that they will make the purchase.

Data from subscription programs can also be used to manage timely, relevant communication with customers. Artificial intelligence technology determines when a consumer might have an overstock of a product and prompts them to skip their next order, instead of completely canceling their subscription.

Bombarding a consumer with irrelevant messages to stock up on products they don’t yet need can be annoying. Instead, communicating with customers at the right time and personalizing the shopping experience to their individual consumption habits can demonstrate a merchant’s usefulness in the relationship.

Enact Cost Savings to Prove Value

Consumers vote with their wallets, and they don’t open them for just any brand. Building a relationship with a consumer means that merchants must show their value often and reinforce the consumers’ decision to shop with them. By signing up for a subscription, consumers can receive deeper discounts compared to a one-time purchase, reinforcing the cost savings a brand provides. For example, Tata Harper, a clean beauty brand, offers consumers 10% off their first subscription order, and 15% off ones.

A common and popular method associated with cost savings is a “subscribe more, save more” feature, where the more products a consumer subscribes to, the deeper their discount. This might look like a beauty shopper ordering multiple bottles of their favorite cleanser, or several individual products like lipstick, moisturizer, and eye cream. In addition, reward and loyalty programs can offer consumers a discount or gift after a certain goal is met. This adds incentives for consumers to keep their subscriptions and also increases the likelihood that they will remain loyal to a merchant.

Reduce Friction and Provide Control

A clunky website or an excessive number checkout steps can be a major deterrent to starting a customer relationship. By streamlining the process of finding and purchasing products, and giving shoppers the opportunity to subscribe at checkout, you can reduce friction significantly. Furthermore, if a consumer faces any problems or has questions about a purchase, virtual assistants and a chat feature can quickly resolve issues and keep a consumers’ interest.

In addition to a frictionless checkout experience, providing consumers complete control over their orders can better serve their needs. For instance, ensure subscribers can easily update their billing information or change the delivery frequency. This type of control helps reinforce the idea that a consumer has a relationship with the merchant and builds trust.

Allowing consumers control of subscriptions can also offset “flavor fatigue,” or the feeling of boredom they may experience after purchasing the same flavor or scent for an extended period of time. With the ability to make changes to their subscriptions, they can easily swap in a similar item. Instead of just handing over a credit card and being viewed as a transaction, consumers feel that their needs are being listened to and addressed with customizable subscriptions.

Address Consumers’ Needs Today

A customer strategy that builds relationships is critical as expectations continue to rapidly change. No longer can consumers be seen as a one-and-done transaction. As a result, you must turn to unique, proven offerings, such as subscription programs, to better interact with them and establish long-term relationships. What’s more, by increasing the number of loyal customers, you offset the high cost of acquiring new ones.

Relationships are never stagnant; they grow and evolve. With the insights generated from subscription programs, customer data will continuously improve the program and build lasting, valuable relationships. Offering consumers convenience and control over their experience, as well as benefits and cost savings, make you more essential to their daily lives.

Greg Alvo is CEO and founder of Ordergroove