Data facilitates efficient subscription management
Considering the shocking number of things one can buy with a subscription, it seems safe to say that the secret to subscriptions isn’t just about the product itself. People buy subscription fertilizers; they also buy international candy, duck blinds, pet food, fireworks – you name it, and there is probably a subscription service that offers it to consumers.
The key to selling these subscriptions, sticky.io chief technology officer Brett McLaughlin told PYMNTS in a recent conversation, makes the right offer to the right consumer at the right time. And this is often more difficult than traders expect.
“What we’re finding is that it’s not necessarily difficult to get a user to engage,” McLaughlin said. “It’s hard if you make the wrong offer at the wrong time. So if a customer buys toothpaste and you offer to send them a tube every week, it’s probably not going to land, is it? Who needs toothpaste every week? It does not correspond well to the product they are buying. And if you give them a toothpaste of the month club, they’ll pass too. Nobody tries to do that – toothpaste is not a bottle of wine with a million different varieties and flavors.
The first thing merchants need when trying to motivate consumers to subscriptions is a certain sense of intelligence about the product they are selling and the consumer they are trying to sell it to. A consumer who buys toothpaste with floss and a toothpick is clearly thinking about dental care, McLaughlin said as an example. They might be candidates to purchase a toothpaste subscription during their shopping trip – and they might not be. The point, he said, is the data. Traders need to carefully consider what they know about the person buying and what they know about what they are buying.
“If you put these pieces together, you can use machine learning and artificial intelligence, and sometimes just smart user interfaces, to position an offer that is appealing to a user,” he said. “So they don’t feel like they’re being sold as much as you provide them with a convenience. Users who feel like they’re sold are hard to get to sign up for recurring billing. Users who feel like you are providing convenience, saving them time, are actually very likely to subscribe.
And for merchants, he said, the incentive is to find the subscription services their buyers want to sign up for. Acquisition costs are quite high for direct-to-consumer (D2C) brands, McLaughlin said, and subscription services have become a booming business because instead of acquiring a customer over and over again, the mark acquires them once, then counts multiple purchases. of them. Plus, he said, it can help brands get consumers to buy something that hasn’t been the case until now due to the shock of the overall pricing stickers. He gave the example of a password utility company: he paid a high price every year for his services, but now pays monthly.
“I haven’t spoken with them, but it’s clear that they saw something in their buying model, probably the shock of the big upfront cost sticker that helped them figure out that the model subscription created a lower cost of entry, ”he said. . “And when you think of digital products that often have high prices, subscriptions can be used to effectively deflate the cost to the user who is then more likely to go online and stay connected over time.”
Provided, of course, that merchants continue to properly enforce the vast streams of consumer data to which they have access to ensure that their subscription services remain relevant to their users beyond the moment of sign-in. McLaughlin offered a simple example of a consumer subscribing to dog food, specifically a product aimed at puppies. This consumer will no longer need this subscription after about a year, as this animal is no longer a puppy – the consumer will then need adult dog food. A smart subscription service will in this case be proactive and will not wait until the moment when the consumer finds that he has the wrong type of food and decides to cancel his subscription. They anticipate this event and contact the customer to see if they want to switch their subscription to adult dog food, perhaps even offering them a small discount for making the change.
McLaughlin said it all comes down to the data and while the examples won’t always be so obvious, there is information the merchant knows that, if applied correctly, they can use to optimize their subscription with their consumers. The result? The consumer continues to find the convenience that drew them to service in the first place.
“And that’s where we see the industry going,” he said. “The more information merchants have and the more their platforms can provide them to see not only their entire user base, but also how to divide and think about their user base as groups of individuals, the more this trader will be successful because he can tailor experiences that really attract and create positive responses.
Subscriptions aren’t always a sure thing, but done right, they are a smart game that can provide merchants with a connection to their consumer base that will generate revenue in a consistent and predictable way over time. But the only way to get it right, he said, is to dig deep into the data to match the subscription to the subscriber early on and consistently throughout.