How To Build A DTC Subscription Business

Although I can not entirely agree with the statement “The customer is always right,” Four Sigmatic’s first principle is that happy customers are essential. We wouldn’t be able to survive without them. They pay our salaries and expenses, and they are our spiritual purpose. It is also more cost-effective to keep customers happy than acquire new ones. We started our business in DTC and have found that a subscription that suits them is the best way to keep them happy, even as we grow in e-commerce.

Here are four essential tips for those with a DTC company who want to start a subscription-based service.

1. Identify who your customers are and what their values are.

First, determine who your customer is. Next, decide what makes them happy. Our primary members are busy moms between the ages of 30 and 50 who are concerned about sustainability and health. They want to create long-term, affordable routines, fit in their lives, and make them feel happy. They’re also swamped to get help fast if they have a problem or need to change something.

With a few perks, we have seen the value of our customers. These are some of the perks you might want to consider for your company. Flexibility is the most crucial piece of feedback. Members can easily cancel, skip, switch, pause, or pause their order online without contacting customer service. Personalization is also important because not all customers are the same. White-glove service is one way to achieve this—for example, first-in-line access to the membership concierge. As an Amazon subscriber-and-save program expert, I believe that members should receive a discount and free shipping to the United States.

2. Amazon Prime is the best way to compete with Amazon.

Over 200 million people already have Amazon Prime. People are familiar with smooth member portals. It should be easy to swap, pause or skip products when you join online. It should also be easy to cancel. Subscriptions that require a phone call, email, and opt-out form to cancel (and then your credit cards are charged again) are not something anyone likes. Some customers will remain loyal to Amazon, while others may not buy from Amazon as often, but many do both. Your subscription offer should be competitive with Amazon regarding price and convenience.

3. Subscription customers should be your top priority

When marketing them, we don’t just market memberships as a “subscribe-and-save” program. Our membership is called “Everyday Magicians.”

Your DTC business should be a priority to members. You might consider creating members-only content for a limited group of people on social media. Our biggest mistake was to have significant sales, like Cyber Monday and Black Friday sales. We tried to get as many customers as possible with very steep discounts. Although we didn’t make these sales public, members would still find them and cancel their memberships. This has been changed so that members can access any sale first and have full access to the most exclusive discounts for members.

Although convenience and price are essential success factors, it is critical not to overlook the importance of education and community. Subscriptions are a must-have for any business. It is not enough to have a subscription service or offer as an afterthought. This is another reason why customers will likely turn to your competition if you do not provide a subscription.

4. Word of mouth is the key to success.

Our best DTC customers are our members, we’ve discovered. They are passionate about our products and are true ambassadors for our brand. Rarely do they subscribe before they have found they love the product. Make it easy for them and their friends to refer you. You might consider a referral program that allows customers to earn money on future orders from their friends who place orders through your program.

Likely, brands will always struggle to determine what pricing is competitive to encourage new customers to sign up for their membership. You might consider adding rewards such as merch or free products for customers who are churning. We’re currently testing our first member-only product.

It is crucial to have strong referral relationships. This is especially important now that DTC has to pay high acquisition costs via Facebook and Google. My experience has shown me that having happy customers who refer their friends to you is the best strategy for long-term success.

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Adam Collins
Adam writes about technology, business and economics. With master's degree in Economics, he's presented six papers in international conferences. As a solivagant in the constant state of fernweh, curiosity is the main weapon in his arsenal.

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