In general, subscription boxes have become one of the most efficient ways to shop. There are designed to offer the customers unique curated experiences around the themes and products, make checking the multiple mails fun and introduce new brands.
In terms of business, a subscription business offers you an effective and stable financial model backed by a predictable MRR- Monthly Recurring Revenue. To understand this in a better way and how it can help the tech companies, let's discuss the benefits of such a business model.
You will witness a predictable revenue
You will get to know how much money you can generate every month, and this will help you in streamlining all the things, starting from inventory planning to sales forecasting. That means you will know how much you need to reinvest for your business growth.
You will enjoy more cash on your hand
Well, most of the subscription businesses will ask for complete payment upfront but at a discounted price. Even though it is a great thing for your cash flow, it can offer entrepreneurs or startups great peace of mind.
You will spend less and acquire more customers
Those who are running a business with a PPP- Pay Per Product pricing approach will have to invest in sales and marketing constantly to attract new customers. As a result, this increases revenue. Well, it has been seen that rising costs related to customer acquisition are a primary reason why most startups fail. However, when you have a subscription model for your software company, your customers will make the payments regularly. That means there is no need to invest more in new customers.
A greater level of loyalty
With regular purchases, you can get a perfect insight into the behavior of the customers. As a result, you can enhance the personalized experience and keep your customers coming back for your products and services. If you hire the best eCommerce solutions provider to create a well-designed subscription business model, you can enjoy loyal customers.
Steps to start a successful subscription business
1. Find a unique niche
Well, you will find a lot of subscription boxes covering clothing, makeup, sporting goods, snacks, and more. So, before starting a subscription business, make sure that you have something that can make you stand out. Don't think that you can't sell makeup or food products. You can do that by adding some new categories. For example, you can allow the customers a unique way of doing online shopping of 100 percent natural makeup products. This will attract more people.
2. Begin your online store
After finalizing the niche, you need to start your own online store by developing a perfect and well-optimized eCommerce website. Besides, you should also come up with the best eCommerce mobile app. Remember that your site will function as a storefront and will help you in developing brand credibility. So, customize your website in the best possible way. Don't forget to choose good page layouts, strategic CTAs, cart pages, etc. For help, you can hire a professional software development company.
3. Develop the subscription box
Once you have developed the online store, you need to create the subscription. Well, the first subscription will be for testing purposes or a prototype. Using a prototype subscription, you can obtain the necessary data for adjustments and insight. Here you also need to choose the cost and discount of your subscription box. For this, you can study some successful competitors in the market. Besides, ensure that the profit margin has covered the business costs, such as storage, packaging, production, fulfillment cost, and more.
4. Creating packaging and branding
With the subscription boxes, the product covered can be just as important as the packaging and branding that surround them. When it comes to building robust brand trust, you need to apply some smart branding methods, for example, create a perfect logo, obtain a professional email address, and more. Don't forget to consider the unboxing experience.
In simple words, this is what a buyer will see and feel when he/she will open the subscription box. Different brands have changed their unboxing methods, including gamified paperboard inserts and reusable packaging materials. Remember that you need to design it in such a way that when they open the boxes, they can feel delighted. As a result, you can enjoy effective word-of-mouth marketing.
5. Develop the value proposition
Different from your selling proposition, your value proposition would be more customer-focused. So, you need to explain to them clearly how your subscription business can change their lives. This will make it easier for potential customers to sign-up. Take your time here but create a perfect value proposition. Here you need to consider three important things:
- Show your customers how your products and services are different from the competitors and why they should choose your subscription business.
- Explain the value of the subscription business to the potential customer.
- Attract customers into your business and brand. Encourage them to learn more.
6. Test it and analyze the customers' reactions
Before making the final commencement, it is always advisable to test the strategy. One of the most effective ways for this is with a field trial or a beta launch. So, how to conduct a beta launch?
Find some users
Find out some testers who will match the product type so that you can get important information from them.
Try to get both qualitative and quantitative feedback from the testers. By analyzing them, you can understand the experiences, opinions, and concepts.
Change the offer
Considering the feedback you have received, make the necessary adjustment and run a beta launch again.
7. Start selling
If you have received positive results from the testing, then you can start selling your subscription boxes to all. Don't forget to promote the subscriptions in different ways, for example, hiring influencers, using social media platforms, and more.
Follow these steps and hire a software company like Enozom to kick-start your subscription business in a successful way.