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One of the best ways to garner knowledge on subscription business growth is to analyze what other companies are doing to shine in the recurring revenue space. When you subscribe to PowerSync’s “Five to Thrive” newsletter, you’ll get the latest industry news delivered directly to your inbox every Friday. We comb and scour the web so you don’t have to!
Staying in the know on the latest industry trends is a must, but it’s just one part of the recipe. In this article, we will zero in on more specific actions you can take to achieve subscription business growth this year, based on the most recent industry data.
That said, at PowerSync, we have worked hard during the past couple of years to create a content library that truly helps eCommerce merchants succeed. Before we dive into the seven must-follow rules for subscription business growth, here is a collection of past articles that we believe will also help supercharge your company.
- The Dos and Don’ts of Starting a Subscription Business
- The Art of Upselling in eCommerce
- Optimizing Your Online Shopping Cart
- Are You Wasting Money on Customer Acquisition?
- Cost-Cutting Business Solutions You Can Get Started on Today
- How to Write Awesome Welcome Emails for New Subscribers
- 4 Ways to Turn up The Heat on Your Customer Acquisition Strategy
- Our Best Marketing Tips for Your Subscription Business
This Article Is for You If:
- You want to know if subscription business models are really lucrative
- You want insight on the best subscription business growth strategies, based on the most recent data
- You are seeking a reputable eCommerce expert to help guide you
Are Subscription Business Models Successful?
The short answer is, “yes!” Subscription companies reported a business growth rate of 20% in Q4 of 2020, according to Adobe’s Digital Economy Index (which provides insight into the state of global eCommerce). Below are more figures from the report.
- Global sales are predicted to reach $4.2 trillion by 2022.
- 9% of consumers never purchased an item online prior to the U.S. pandemic emergence in March 2020.
- 47% of respondents agree the pandemic spurred them to buy certain types of goods online for the first time.
Without a doubt, the influx of new eCommerce customers is bleeding into subscriptions. With the way things are trending in the space, you’re already a step ahead if you’re leveraging recurring orders. Additionally, recurring revenue businesses carry a higher valuation than their one-time purchase counterparts. (We cover that more in-depth in a previous post).
How Can I Make My Subscription Business Grow?
The good news is that as a subscription business, you’re already positioned for high revenue-generating potential. In addition to that, you’ve already invested in professional branding and graphic design. Your color scheme is on point. Your website is both visually pleasing and easy to navigate. Hopefully, you’re following our best marketing tips for your subscription business.
You’ve laid so much of the important groundwork already, so don’t hesitate to take it to the next level. The following strategies will help you accomplish business growth in the recurring revenue space.
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Rule 1: Get Your Tech Stack Right
Incorporating cutting-edge tech solutions tops our list of business growth strategies, and we compiled the subscription technology checklist for your convenience.
Essentially, you need to find the right eCommerce platform and CRM system for your business. We love Magento and Salesforce, which is why we created a time-saving automation that integrates data between the two platforms.
Speaking of — Look into time-saving automations and plugins that can perform tasks within your business systems. For example, can you integrate your accounting software with your eCommerce platform?
Customer experience is another area you can’t afford to cut corners on, and that means upping your game in two key areas:
- Customer support: There are many digital solutions that can assist with ensuring your customers always feel heard and receive prompt replies when they need to reach you.
- Your website speed: Our customer, LuxAnthropy, knows first-hand how lagging website speeds can take a negative hit on profits. (Read their full story here for the specifics). Our best advice is to consult with a developer who can help find, diagnose and repair issues in your eCommerce store (and we’re available!).
While the above pointers apply to businesses in general, recurring revenue companies should invest in robust subscription management solutions that fully meet their needs. Our number one pick is PowerSync’s mPower subscription management solution for Magento. We’ll admit it — we’re biased. However, through years of working with subscription eCommerce merchants, we have been able to identify and solve for many subscription use cases with mPower. Even if you’re not a Magento merchant, there are certain criteria you should look for when choosing the right solution for your business.
- Does the developer of the product use the solution themselves?
- Does it provide a good user experience for both the merchant and their customers?
- Can shoppers manage and modify orders without having to go back through the purchasing process?
- Is the solution tailored to meet goals in your specific industry?
Rule 2: Expand Your Subscription Offering
In addition to your regular products and services, what else can you add to make what you offer more niche? Here are a few ways you can set yourself apart.
1. Launch A Loyalty Program
Loyalty programs have steadily gained popularity in the past decade, according to Bond’s report, The State of Loyalty. In 2020, 79% of those in loyalty programs were likely to stick around long-term, as opposed to only 61% in 2011. According to the report, there are 10 drivers of member engagement. They provide insight into what should be considered when launching a customer loyalty program.
- Will my customers enjoy participating?
- Will the program make their brand experience better?
- Will the program meet their needs?
- Are the rewards appealing?
- Will the loyalty program make my customers feel valued and important?
- Is the program consistent with brand expectations?
- Will the reps make loyalty members feel special and recognized?
- Will the offers be more relevant over time?
- Will the program offer seamless touchpoint experiences?
- Will loyalty members feel they are treated better than non-member customers?
Keep in mind that discounts and free products remain the top rewards, according to the 2021 Loyalty Barometer Report. Additionally, surprises help to cultivate an emotional connection with your brand, so how can you deliver something unexpected to your most loyal customers?
2. Play With Gamification
First of all, what is gamification?
“Gamification, by definition, is the application of game mechanics to what are traditionally non-game activities. The intent is to prompt specific behaviors by creating an entertaining experience which incentivizes desirable actions to be taken by the player.”
That’s according to the Gamification Increases Customer Engagement data sheet that was released by Evolving Systems in a partnership with Loyalty 360. We recommend downloading it ASAP, but here is our key takeaway: When it comes to gamification, don’t over-complicate it. Gamifying a product or service can be as simple as allowing your customers to earn points and unlock levels. You may also dull out digital badges when customers reach a higher tier.
3. Get Really Creative
The 2021 Loyalty Barometer Report reveals that 81% of consumers want a relationship with a brand, so how can you cultivate that?
Add value by launching something to supplement your products/services, such as a podcast, blog or YouTube channel. All of these options are a win-win because they all help position you as an expert in your field while building a sense of community with your subscribers.
Additionally, around 50% of consumers between the ages of 18-39 (Millennials and Gen Z), are willing to pay a fee for enhanced benefits, so how can you monetize your efforts?
Rule 3: Optimize Your Business Downtime
- Invest in team-building
- Pursue educational opportunities
- Tackle business/marketing plans
- Check old items off your to-do list
- Conduct market research/customer surveys
- Evaluate inventory and offer deals on overstock products
- Give yourself an online makeover
- Launch a YouTube channel or blog
- Take on outsourced projects yourself
- Go on vacation (self-care is important!)
Rule 4: Attend Events and Network
Sometimes, we just need to get back to the basics. By that we mean, “Get out there and network!” With so many industry events and conferences going virtual, a quick Internet search can lead you to a helpful webinar that will put you in touch with potential leads.
We also recommend attending these subscription industry events this year:
Rule 5: Designate a Budget for Internet Marketing and Search Engine Optimization
If you have the time, the web offers plenty of self-guided resources that can give you a good grasp on how to tackle digital marketing. If you’re short on time or not tech-savvy, that’s okay! It’s a virtue to be willing to admit what you’re good at and not good at. Focus on what you do well, and let a marketing professional take this off your plate. But by all means, do not leave this area of your business unattended.
Hire help, even if it’s just to get your business off to a good digital start. At the bare minimum, ensure your website is top-notch and your information is up-to-date on Google.
Rule 6: Survey Your Customers
Information is power. Businesses that measure customer satisfaction are 33% more likely to describe themselves as successful. The more you know about how customers perceive your brand, the better opportunity you have to make adjustments that will help to preserve monthly memberships.
Does your company need to invest in more employee training? Are there problems you need to address in certain areas? Do you know the specific things your monthly membership business is doing well? These are all things that can be answered through customer satisfaction surveys. (By the way, here are eight vital questions you should be asking).
Rule 7: Schedule Time With an eCommerce Expert
If you’re prioritizing subscription business growth this year — Congratulations! Leveraging the right technology, launching new initiatives and staying engaged with your customers and industry are all keys to success.
Seeking out the right mentors is also a way to help take your subscription business to the next level, and we’re here to help. If you would like to speak to an eCommerce expert at PowerSync, schedule your risk-free, complimentary consultation today.