According to research from McKinsey, the world of eCommerce subscriptions has grown dramatically in the past few years, now capturing 15% of total online shoppers.
Gaining customers who consistently buy products via your subscriptions month to month is a key to growing CLTV (Customer Lifetime Value) and scaling your online business.
O-Joe Coffee, a successful small batch coffee roaster out of Canada, has seen a tremendous lift in annual revenue after they converted nearly half of their one-time buyers to their discounted subscription model.
In just 14 weeks, O-Joe’s went from $35,000/month in revenues from subscriptions to $75,000/month in revenues from subscriptions. Joe says the companies overall revenues have also climbed substantially from this consistent income.
This increase in revenue coincides with what Shopify’s research has found, when they stated, “subscription customers average 20% more revenue than overall customers”.
So then the obvious question becomes: How do you convert more of your customers to subscriptions?
Here's how O-Joe Coffee reached $75,000 in recurring eCommerce subscriptions:
Personal videos: Whenever a customer buys a bag of coffee from O-Joes, the company sends them a personal thank you video using Bonjoro, showing them the roast they are about to receive and educating them about the subscription options. The personal touch does wonders in converting new one-time buyers to subscriptions. Check out an example by clicking the image below.
What Joe does an incredible job of in his videos is:
A) He is authentic and you can see that in the fact that his videos don’t feel scripted.
B) He shows the product they are receiving and that really brings the customer in and makes them feel like this is a tight-knight community roaster.
C) He educates on the subscription option but doesn’t push it, so it strikes just the right balance.
Overall, personal videos do the best when they are non-salesy, personal and connect the customer more deeply with the product or service. Joe also noted that another great benefit of video is, “My customers are much more likely to reach out and contact me after a personal video. Once that relationship has been created, it’s much easier to stay connected moving forward”.
Discounts and convenience:
Part of the draw of subscriptions is for people who consistently order a product you want to save them time and money. O-Joe coffee offers a 15% discount on the first order of your new subscription and then 5% thereafter. By doing this they encourage people to take the leap with a larger upfront benefit. Even though you are discounting, subscriptions almost always lead to more long-term revenue for the business so it’s a value add on both ends.
Customers sometimes need a little help taking that leap to subscriptions. Very often they will have extra questions, and need a little more convincing by describing exactly what the subscription offers that a standard purchase doesn't. O'Joe does a great job here with a beautifully edited explainer video that customers can watch on the subscription page. Joe personally explains the whole experience from order, through to delivery, and builds excitement with some beautiful shots of the whole process.
Simple cancel/pause/delay options:
One of the things that O-Joe coffee does a phenomenal job with is making the whole subscription process easy to manage. Off the bat, anyone can cancel at any time (no contracts or annual plans). But Joe doesn’t stop there. He also allows customers to pause when they go on vacation. This is the most common thing he says his customers utilize. In fact, Joe notes that he encourages them to pause if needed because he always wants to send them fresh coffee.
Surprise & delight:
O-Joe coffee wants to continually surprise and delight their customers. That is why every few months they will slip in an extra bag of a new product or even some O-Joe swag (a pen, mug etc.). The goal is to continually activate those centres of that brain that light up when they experience a pleasant, but unexpected experience from a company.
If someone is invested emotionally in your brand they are way more likely to make that leap to subscriber. Joe consistently creates brand advocates by letting customers share in his story. Posts like the one below give customers the opportunity to share his experiences, and creates an emotional connection with the product that adds to their excitement and eagerness to become a long term subscriber.
Make your own pivot to eCommerce subscriptions
The blueprint is actually quite simple: get personal and save them time and money.
People want to support brands who they feel a sense of affinity or identity with, so work to reinforce why your purpose as an organization matters. By using videos and actually showcasing the product and talking to them about the origin, it reminds people this is not some mass-produced commodity but instead a small, mission driven organization they can relate to.
Furthermore, by providing discounting and easy to manage subscription billing you make life easy on your customer. Remember that every time a customer gets charged for product when they don't want it (because they are on vacation or busy or whatever else), you are one step closer to losing them. On the other hand, when a customer is having a super busy week and really wants the product, when it arrives on their doorstep without them having to go through the hassle of ordering it again and again, that builds customer loyalty. So make it easy for the customer to be in control and don’t worry about if the pausing causes you to lose a month or two of subscription payments. In the long run, you will be much better off.
Joe has seen tremendous success over the last few months and I asked him what he has planned next. As usual, his ideas all circled around how he could help add more value to his customers. Like most fast growing businesses, it’s not some magic growth hack that unlocked his secret to success. Instead it’s consistent attention to providing a memorable customer experience and overdelivering on product value. Moving forward he wants to try a video education series around new coffees they are putting out and provide more information on some of the machinery users can leverage at home like grinders.