Is Customer Churn Troublesome? Opt For Subscription Box Business Model

Retailers, resellers, and distributors in the subscription business market need to understand that in the end, customer behaviour is human behaviour. And human behaviour has changed over time. At present, people have the internet, state-of-the-art tools & technology, and gadgets that help them in getting updated about new products and services in the market. Also, they demand 100% satisfaction from the product or services for which they pay. To bring a SaaS product in the market that can offer complete satisfaction to the customer base is in itself a challenge.

What happens is: customers start leaving the platform that does not satisfy them and retailers look for a churn management software. However, subscription boxes not only offer an opportunity to diversify the revenue but also help you reduce the customer churn rate. The only thing required to follow the subscription box model is to think inside the box so that you can come up with something that is irresistible for the customer.

Read this article till the end to know how a subscription box adds value to your subscription business and its role to retain subscriptions.

Also Read: Did Your 2021 Churn Prevention Strategy Produce Results? This Is The Right Time To Plan A New One

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is the worth of the customer that it offers during the span of time that he spends onboard. The primary factors on which customer lifetime value (CLV) depends are:

  • Customer acquisition cost
  • Per customer revenue
  • Cost of the products & services sold
  • Customer churn

B2B SaaS companies have proper formulas and automated systems to calculate CLV and churn is crucial whenever you formulate your formula to calculate CLV.

Now, consider the scenario that sales of an eCommerce business are falling. They revisit the customer data and read the purchasing behaviour of the customers who are leaving. There will probably be the products that the customers often purchase. What eCommerce business needs to do is to offer its customer a personalized subscription box at a competitive price. You can also add some rewards for customer loyalty in this box. Such offers immediately increase customer retention as well as loyalty to the brand.

Customer Satisfaction Score (CSAT)

Recently, people celebrated the start of the New Yeat. Chrismas and New Year is the time when gifts are exchanged. Not just these special occasions but people gift at various times of the year. Offering customers not just subscription boxes but also the option to gift these boxes can improve Customer Satisfaction Score (CSAT).

Other than improving CSAT, gift subscription boxes also open up doors to acquire more customers. You just need to work on the customer acquisition cost side by side with the gift subscriptions. Impressing a customer is not easy these days. However, boxed subscriptions and a gift of these boxed subscriptions are the best ways to satisfy recurring customers. So, plan a subscription box now, and monitor CSAT before and after your launch the subscription box.

Also Read: A Step-By-Step Guide To Deal With The ‘Unsubscribtion’ Obstacles

Customer Loyalty Program

Subscription boxes can also be a part of your customer loyalty program. For instance, some eCommerce platforms give points to their customers on every purchase. They also instigate customers to share reviews for which customers will earn more points. And the customer is incentivized in different ways with these points that he earns while shopping from an eCommerce platform. eCommerce businesses can add incentives in boxed subscriptions for the points earned by the customer.

Recently, the trend in the subscription business market is shifting to community building rather than just onboarding customers. And customer loyalty programs can become part of a community-building strategy. Subscription boxes make customers advocates of your brand. You must understand that the success of the subscription boxes also involves certain psychological triggers. Something that benefits the customer when put inside a box is more like a gift for the customer. And offering this box at affordable rates is like offering customers a chance to gift something to themselves.

Experts have found that a major chunk of the revenue earned by subscription businesses comes from some specific customers. So, you need to incentivize these customers who are the major source of revenue for your subscription business. Curate innovative subscription boxes and make them loyal to your brand.

Customer Acquisition

Though many subscription businesses are having customer retention as their point of focus, yet customer acquisition cannot be neglected for long. Just imagine that if somehow you succeed in making your customer acquisition cost comparatively low, instantly, you will get the competitive edge in the market. And boxed subscriptions can help you reach that level.

For instance, during the episode of the pandemic outbreak, varying businesses launched subscription boxes as pilot projects. Today, these subscription boxes have become a source of revenue for them.

Businesses that have faced significant subscription cancellations need to immediately shift their focus to customer acquisition. Acquiring more customers is a way to balance subscription cancellations. And offering your services or product inside a box is one of the practical ways to acquire more customers and retain the existing ones.

Also Read: Subscription Box Business 102: Curate Your Subscription Box—Types, Niches, & Procurement Ideas

Avoiding Discounts and Offers

Discounts, coupons, and offers are part of every business. However, when it comes to subscription boxes, there will be customers who intend to only continue subscriptions for the box as long as the offer or the discount is attached with that box. They cancel subscriptions as soon as you bring your box to the normal pricing.

So, improvise the price of your subscription box intelligently. If you are offering a discount on the subscription box, then strategize it in a way that you can deal with such customers who are not loyal enough to continue subscriptions when the pricing is revised with time. When you plan a box of subscriptions, do not attach any discounts if you feel that customers will not be willing to continue their purchase with you without this discount.

Revising the Business Model

Many businesses started their business with subscription boxes at the beginning of days of the coronavirus outbreak. And today, they are earning sufficient from only these boxes. When you would start your subscription box business, the scenario will probably change for you as well. So, keep in mind that other than reducing the customer churn, there are multiple other perks of boxed subscriptions.

Subscription boxes will diversify your recurring revenue, reduce customer churn rate, and bring many new opportunities on your way that you should make the revision of the business model part of the timeline.

Also Read: Time To Think Inside The Box To Choose Right Products & Services To Add In A Subscription Box

Now that a New year has started, it is the right time to address the customer churn, and subscription boxes can help you improve the performance of customer satisfaction-related KPIs like the churn rate. SubscriptionFlow offers its clients a robust platform where they can track the performance of various key performance indicators. Call the SubscriptionFlow team to get on board so and discuss your strategy to curate a subscription box with experts.