One of the challenges of growing an online store is to get repeat customers. Repeat customers are 25 times less expensive than new customers when it comes to acquisition. Offering subscription products is a growing trend that helps overcome this challenge. Subscription products can help increase your store’s revenue, bring predictable cash flow, and help increase your customer lifetime value.
So what are subscription products?
These can be physical products – like Harry’s razors or many box-of-the-month products, or virtual/digital products – like Netflix, magazines, or support subscriptions. Most of these tend to be affordably-priced so that subscribing is not a barrier for most customers.
Let’s take a look at what’s needed for getting subscription products set up for your store.
You can set up a subscription business or products using the WooCommerce Subscriptions extension. The extension allows you to set up subscription products – subscription price, recurrence period, any sign-up fee, and any free trial period.
You can offer subscriptions for one or multiple products. Within each product, you can offer different terms for the subscription. For example, you can offer a monthly subscription at a higher per-order price, and a yearly subscription of the same product at a lower per-order price. This will provide customers with options to fit their needs.
Customers can easily modify any of their subscriptions through their account. You can take a look at all the features in WooCommerce Subscriptions in this review of the extension.
If you want to add subscription options to existing products, you can also take a look at the WooCommerce Subscribe All the Things extension which let’s you add a subscription option to your products. Read more about the extension and how you can use it in this post.
Although subscription products have a lot of benefits, you have to be careful about which products you can offer as subscriptions. There are a few things to keep in mind:
- Affordable – An advantage of offering subscriptions is that you can offer these at a lower price per item than you would otherwise. This is because you know the customer will be receiving multiple orders. However, the subscription has to be affordably priced for customers to see the initial value.
- Many variants – If you are offering a subscription to a category of products (like shirts, socks, ties, etc.), you have to make sure you have enough variety in the inventory to fulfill orders on an ongoing basis.
- Ongoing need – Subscriptions are well served for products which run out or are needed on an ongoing basis. For example, shaving razors, weekly groceries, coffee beans, etc. make good subscription products, but mattresses probably don’t since they last for a long time.
Whichever product or category you choose to offer subscriptions on, remember to test out the market to see if people would consider purchasing it on an ongoing basis. You also need to make sure that your business is set up to fulfill the subscription orders at the recurrence you offer so that customers find value in each order they receive. Consider starting off with subscription for a single product or category before you branch into other products.
Check out stories from businesses built on subscriptions on the Small Woorld blog.
As you promote your subscriptions, you can tie these to benefits to further create value for customers. You can integrate WooCommerce Subscriptions with WooCommerce Memberships to create exclusive membership perks to subscribers. These can be lower-priced items on your store, or access to purchase certain items on your store. You can learn more about the integration of Memberships with Subscriptions here.
As you’re testing out new products, you can include them in the orders of existing subscribers to gauge their reaction. This can help you get useful feedback about new products, and your subscribers receive a bonus item and a preview of products to come on your store.
You can also consider offering discounts and coupons for subscriptions, especially long-standing subscribers to reward their loyalty. This creates a great customer experience as you show customers that you recognize their patronage.
Subscription products are a great way to increase customer lifetime value and get predictable cash flow. These products are typically more profitable as well as you don’t have to spend marketing dollars to get the orders. This allows you to focus on developing and delivering the products rather than worry about where your next customers are going to come from.
You can set up subscription products using WooCommerce Subscriptions for both physical and digital products. If your store is on Easy Digital Downloads, you can also use the Recurring Payments extension to charge customers on an ongoing basis.
Do you sell subscription products? What has your experience been like with them? Please tell us in the comments below.