The Gift That Keeps on Giving: What Retailers Can Learn From The Top 100 Subscription Companies
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Ever wonder how your email and mobile marketing campaigns compare to the leaders of the subscription commerce industry? We'll reveal aggregate trends and stand-out studies of the top 100 subscription companies, like Dollar Shave Club, Barkbox, and Le Tote, to discuss who's winning—and losing—at user engagement. In this presentation, you'll gain access to valuable insights, including: · Real-world messaging examples from the leading subscription services · Best practices of welcome, blast and re-engagement campaigns · Recommendations on how to retain customers and increase their lifetime value
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The Gift That Keeps on Giving: What Retailers Can Learn From The Top 100 Subscription Companies
- 1. iterable.comIterable, Inc. All Rights Reserved The Gift That Keeps on Giving What Retailers Can Learn From The Top 100 Subscriptions
- 2. iterable.comIterable, Inc. All Rights Reserved About Us Iterable empowers growth marketers to create world-class behavior-based campaigns across all channels to support engagement, conversion, and retention. If you want to learn more about Iterable, please request a demo: iterable.com/demo David Rangel is the COO at Iterable, a growth marketing platform. Previously, David has been VP of Marketing at Fuse Powered, COO at Corona Labs and has also worked at Microsoft, Groupon and McKinsey & Co. DAVID RANGEL
- 3. iterable.comIterable, Inc. All Rights Reserved Agenda Research Framework Welcome Campaigns Blast Campaigns Re-Engagement Campaigns Mobile Campaigns Conclusion
- 4. iterable.comIterable, Inc. All Rights Reserved Subscription Economy Customers are happier subscribing to the outcomes they want, when they want them, rather than purchasing a product with the burden of ownership. Ongoing Value Memorable Experiences On-Demand Fulfillment Anywhere, Real-Time Personalized Service
- 5. iterable.comIterable, Inc. All Rights Reserved US Box Subscription Economy US Box Subscription Vendor Web Traffic MonthlyWebTraffic In$USDBillions US Box Subscription Spending Spending Growth in US Box Subscribers Subscribers Traffic
- 6. iterable.comIterable, Inc. All Rights Reserved Research Framework Welcome Campaigns Studied the top 100 subscription companies in the U.S. Tracked 4 campaign types over the course of three weeks in Summer 2017. Blast Campaigns Re-Engagement Campaigns Mobile Campaigns
- 7. iterable.comIterable, Inc. All Rights Reserved Research Findings Key findings: Failed first impressions, limited use of omni-channel messaging and lack of focus on re-engagement committed to a complete welcome series 19% 9% sent a push or text message to new users despite 26% having a mobile app Sent dedicated re-engagement messaging to try and win-back churned customers 13%
- 8. iterable.comIterable, Inc. All Rights Reserved Welcome Campaigns Top 100 Subscription Retailers with Welcome Campaigns Number of Welcome Emails Sent 1 2 3
- 9. iterable.comIterable, Inc. All Rights Reserved Le Tote • 3-email welcome series • Pre-purchase • Includes origin story 1 2 3
- 10. iterable.comIterable, Inc. All Rights Reserved Recommendations • Build rapport with new users through personalization & multi-touch campaigns • Ensure personalization with A/B testing as well as sophisticated segmentation • Follow-up CTAs: o Download app o Follow on social media Keep the good vibes going Evolve beyond email Prioritize engagement over acquisition • Invest in visually appealing welcome emails • Avoid “transactional”-type emails for account creation • 47% of shoppers buy more from retailers that engage with them across multiple channels • Offer users some value first • Consider all signup events to trigger welcome campaigns
- 11. iterable.comIterable, Inc. All Rights Reserved Blast Campaigns Top 100 Subscription Retailers with Welcome Campaigns Weekly Average by Industry Average Fashion Beauty & Grooming Food & Drink Lifestyle
- 12. iterable.comIterable, Inc. All Rights Reserved Loot Crate • Animated title • Mirrored content • Excellent engagement Geek Fuel • Nostalgic creative • Exclusive offer • Lacked animation
- 13. iterable.comIterable, Inc. All Rights Reserved • Make sure blasts are highly visual – include fun animations, GIFs, scratch- offs, etc. • Think interactivity for greater engagement as well as data collection: o Ex: Live polling or geo-targeting Boost blasts with dynamic content Recommendations Personalize the promotion Think like a media company • Incentivize referrals with bonuses or discounts. • Invest in Facebook Live, Twitter chats, and Reddit AMAs. • No one knows subscriptions like newspapers and magazines. • Incorporate informative newsletters and fun features.
- 14. iterable.comIterable, Inc. All Rights Reserved Re-Engagement Campaigns Beauty & Grooming Food & Drink Lifestyle Fashion Top 100 Subscription Retailers With Re-Engagement Campaigns Re-Engagement Campaign Adoption By Industry
- 15. iterable.comIterable, Inc. All Rights Reserved Dollar Shave Club • Also offers products without subscription • Easy membership reactivation • Calm and collected BarkBox • Offers products without subscription • Adorable photo of dog • Fun, casual tone
- 16. iterable.comIterable, Inc. All Rights Reserved Recommendations • The conversation doesn’t end, but it does need to change • Encourage users to return to online store and review frequency Communicate & compromise Offer a sweet deal Keep it casual • Include an incentive they can’t refuse • Ask for feedback to determine reason for cancellation • Don’t add pressure with pushiness afterward • Focus on rebuilding positive relationship
- 17. iterable.comIterable, Inc. All Rights Reserved Mobile Messaging Companies That Sent Mobile Messaging Top 100 Subscription Retailers With Mobile Applications Mobile Messaging Adoption By Industry Beauty & Grooming Fashion Food & Drink Lifestyle
- 18. iterable.comIterable, Inc. All Rights Reserved Nadine West • Great welcome SMS • Strange follow-up SMS • Promotional or transactional but not both Adore Me • Push & SMS • Promotional offer • Easy to understand
- 19. iterable.comIterable, Inc. All Rights Reserved • Offer a dedicated mobile app and capture phone numbers • Communicate via push & SMS Coordinate all channels Avoid any mixups Make opt-in (and out) easy • Messages should be transactional or promotional • Keep CTAs focused • Request push permission immediately after app download • Provide easy opt-out with SMS instructions like STOP Recommendations
- 20. iterable.comIterable, Inc. All Rights Reserved Conclusion and Next Steps • Email marketing and automation has been around for some time, but most retailers still have a lot of work to do • 91% of box subscription companies do not communicate via mobile • A “Growth Marketing Platform” built for marketers and with the ability to scale is crucial • 87% do not attempt to re-engage lapsed subscribers • 32% still lack using best practices for welcoming new customers iterable.com/subscription-retailers-report
- 21. iterable.comIterable, Inc. All Rights Reserved If you want to learn more about Iterable, please request a demo: iterable.com/demo
- 22. iterable.comIterable, Inc. All Rights Reserved Questions?
Editor's Notes
- WE NOW LIVE IN A SUBSCRIPTION ECONOMY At the heart of the Subscription Economy is the idea that customers are happier subscribing to the outcomes they want, when they want them, rather than purchasing a product with the burden of ownership. Customers want ongoing value, memorable experiences, on-demand fulfillment, and personalized service delivered anytime, anywhere This also means that “Success” requires engaging with your customers in long-term relationship in consistent ways 1-to-1 at scale
- And the subscription economy is taking off! $429 BILLION spent on subscriptions in US in 2015, up from $215 Billion in 2000 (Credit Suisse) and Gartner is predicting that subscription spending will reach $1.2 TRILLION by the end of 2017. That is a 7 year increase of 458%!! This has translated in a growth in the number of box subscribers from 4.5 million in 2010 to 11 million as of January 2017
- To analyze opportunities subscription service companies have for improvement as well as identify best-in-class strategies, we studies the top 100 subscription services companies in the U.S. out of the 2,000 that current existing in this country We evaluated 4 marketing campaign strategies: welcome campaigns, blast campaigns, re-engagement campaigns, and mobile campaigns – we actually subscribed to services of all 100 companies and tracked all their communications, including welcome campaigns, blast ccampaifns, mobile campaigns, and re-engagement campaigns
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- Only 7% of companies sent more than 3 emails as part of their email campaign; a majority blast a single “welcome” email but fail to engage customers with more meaningful content or onboarding information
- Leading fashion subscription retailer Le Tote demonstrated how to effectively welcome consumers who have yet to convert. Once we signed up for email communications, we received three onboarding messages over the next four days . With this messaging flow, Le Tote successfully explained how its service works, highlighted the top reasons to join and shared the company’s origin story. By building rapport with a welcome series, subscription businesses can encourage users to become paid subscribers.
- Most vendors use “blast campaigns” The average number of blast emails sent to active subscribers was 3.8 in one week. Fashion brands sent the most with 5.4 on average, followed by Beauty & Grooming with 4.5 emails and Food & Drink with 2.5 emails. The Lifestyle industry sent the least number of blasts at a weekly average of 2 emails.
- Adding interactive elements that align with an email’s subject matter is a great way to make a blast campaign more dynamic. Fans of Netflix’s original series, “Stranger Things,” would appreciate Loot Crate’s promotion of its limited edition crate, thanks to the email’s use of animated title. Its clever mirrored design to reflect the show’s alternative reality known as “the Upside Down” is another unique touch to wow subscribers. In contrast, Geek Fuel missed a valuable opportunity to take its Space Invaders exclusive blast to the next level. Although video game enthusiasts likely appreciated the nostalgic typography and themed call-to-action button, they would be blown away if the aliens were animated to match the gaming experience.
- Subscription retailers get an “A” if they make an effort to engage their users with relevant content, unique visuals, and a clear call to action above the fold. Companies that frequently re-use templates, or worse, send the same email repeatedly will lose points with customers.
- 13% is a pretty low number, especially when you consider acquiring a new customer costs five to 25 times more than retaining an existing one. Because preventing churn is a core objective of subscription retailers, it’s astonishing how little the industry as a whole is doing to win back subscribers. Of all the lifecycle campaigns, re-engagement was clearly the stage that was least utilized. It seemed that once customers churned, most businesses merely resumed sending them mass blasts with no targeted attempt to incentivize them to resubscribe
- Although they didn’t offer any discounts, Dollar Shave Club and BarkBox both stressed that inactive users can still buy their products without a recurring subscription. BarkBox’s casual, no-pressure tone with messaging like, “Look, we get it, you just aren’t looking for anything serious right now,” takes any awkwardness out of cancellation and rebuilds the relationship with the customer.
- Studies show that a 5 percent increase in retention can result in a 25-95 percent increase in profit. At the point a customer cancels their subscription, a re-engagement campaign can be deployed to win them back.
- Compared to traditional retailers, e-commerce companies with a subscription business model do not prioritize mobile messaging. Only 26 percent of the top 100 retailers have a dedicated mobile app. Of those companies, 35 percent were categorized as Beauty & Grooming, 31 percent as Fashion, 23 percent as Food & Drink and 11 percent as Lifestyle. <Mobile messaging sent> Of the 26 companies with mobile apps, only nine sent at least one SMS or push notification to new users. Adore Me, a leading subscription for women’s lingerie and other apparel, was the only company in the top 100 to leverage both channels.
- We found that Mobile messaging is a vastly under-utilized strategy by the leading subscription retailers, despite its wide applicability. Whether it’s sharing exclusive incentives or keeping customers informed about delivery status, there are a multitude of ways that subscription businesses can keep users regularly engaged on the smartphone of their choosing. Adore Me did an excellent job of leveraging both text and push messaging. The apparel company demonstrated its multi-channel marketing prowess with its SMS that encouraged users to download the app to track shipping and its “buy two, get one free” promotional push. Each alert motivated customers to continue shopping with strong calls to action, with offer codes and links to mobile app stores. While the SMS kept content clear and concise, the push notification added a casual, friendly tone with, “Shop it out, girl!” <Nadine west> In contrast, Nadine West communicated solely via SMS on mobile, but with varying results. Its initial text showed what a warm welcome should look like: personalized to the new user with a positive voice and cheery use of emoticons. However, the second SMS sent by Nadine West was more of a miss than a homerun. At first glance, a customer might not understand why she’s receiving a strange joke about her smelly feet, which is not at all relevant to the tracking link below it. The secondary call to action to share on Facebook also muddled the message and created a confusing experience.
- Mobile messaging is most effective when it mirrors the voice and style of your brand—not to mention gets straight-to-the-point to fit the limited messaging space. Make your alerts more memorable with these best practices. Avoid any mixups. A mobile message should be either transactional or promotional in nature, but not both. Keep your calls to action focused, so your customers can easily distinguish between a shipping confirmation and the latest BOGO deal. Make opt-in (and out) easy. Keep consumers rapt with attention by requesting push permission immediately after downloading the app to encourage increased signups. As for text messaging, provide an instruction like “STOP” for users who are no longer interested in SMS communications.