Curated services, monthly replenishments, rental services and premium access models vie for consumers’ attention in an overcrowded retail subscription market. Offering the promise of convenience and a personalized experience, even brands that wouldn’t have considered a subscription service a decade ago are aggressively pursuing the model today.
Many of the retailers new to the space, however, will make the mistake of funneling a majority of their budget into customer acquisition, which can be costly and ultimately ineffective. As customers become increasingly overwhelmed by the growing availability of subscription services, they’re more likely to jump ship after the initial promo deal runs out. Unless subscription services retain and care for their customers over the long term, retailers will end up losing more customers than they gain.
So what are retailers to do? The answer lies in building (and executing!) a strategic digital engagement plan to keep the focus on retention and on exciting customers on an ongoing basis.
Step 1: Clarify your vision
What role do you want to play in your customers’ lives, and what is the long-term relationship you want to build and strengthen through a subscription service? Determine whether your service aims to provide ultimate utility and convenience (think Amazon Prime) or become a source of inspiration and self-expression (think Rent the Runway). The vision lays the foundation for the type of engagement you need to build in order to bring the vision to life. Nike, for example, did this with NikePlus by designing a program that takes members up an “engagement ladder” by eliminating pain points, offering new services and ultimately helping them be better athletes.
Step 2: Profile your customers
Not every customer comes to your service with the same needs and desires. To design engaging experiences and build emotional and behavioral loyalty, you need to understand how customers’ attitudes, values and behaviors differ. These differences will inform your choice of digital engagement experiences to build and ultimately enable one-to-one relationships. Vans, the skate apparel company, uses polls and quizzes in its mobile app to understand not only which products customers like but also what drives these preferences, really getting into lifestyle and deep individual motivations.
Step 3: Build the data product
Once you have defined a vision and understand customer behaviors, it’s time to build the heart of a digital engagement strategy: the data product. Determine how to collect, connect and enable the customer data needed to bring the engagement strategy to life. An integrated marketing stack leveraging machine learning techniques is the subscription marketer’s secret weapon.
Step 4: Design the experience
For many marketers, this is the fun part: designing thoughtful levers and nudges that increase customer engagement and deepen the connection to the brand. This includes experiences both inside and outside of the core product. Stitch Fix, for example, leverages Pinterest to cultivate community, incentivizing subscribers to create boards showcasing the outfits they put together with Stitch Fix items. Members can see how peers are styling fixes and draw inspiration or create their own, and the boards of course help improve the data algorithms and Stitch Fix stylists’ recommendations, accelerating the engagement flywheel.
It all sounds so easy, right? At the end of the day, subscription services require a robust test-and-learn approach, rapid iteration and the ability to tap into multiple business capabilities. The make-or-break factor of your success, however, is ultimately the level of commitment across your organization to exceeding customer expectations with at each and every service touchpoint.
Antje Helfrich is a senior manager at Lenati and brings over 20 years of experience developing B2B and B2C customer-centric marketing strategies. She has led successful initiatives with well-known brands including Starbucks, Microsoft, T-Mobile, SAP, AT&T and more. Antje is passionate about the intersection across business, customer, and marketing technologies. As a leader in Lenati’s Customer Experience Practice, she helps clients create meaningful customer experience programs that drive loyalty and generate business growth.
Nate Waters is a senior consultant at Lenati, the strategy and design division of PK, with a background in product management, building apps, and creating programs to drive customer engagement. He has worked across a variety of companies including Sports Illustrated, Microsoft, the PGA, SC Johnson and more. Nate enjoys finding ways to understand the voice of the customer, tying in data, and building new products.