The subscription economy is expected to reach $1.5 trillion by 2025. Not surprisingly, one of the best ways that ecommerce merchants can increase their customer lifetime value (LTV) and improve their customer experience is by offering subscriptions.
The subscription economy is expected to reach $1.5 trillion by 2025.
The benefits of subscriptions are practically endless, both for merchants and their customers. For ecommerce stores, subscriptions give access to recurring revenue, higher LTV and average order value (AOV), and better customer retention. Meanwhile, shoppers enjoy a more streamlined shopping experience and greater access to the brands they love.
In this post, we’ll cover the ways in which ecommerce merchants can enhance the customer experience with subscriptions, therefore reaping the benefits of recurring revenue and greater customer loyalty.
- The subscription economy is expected to continue growing steadily in the next few years.
- Merchants gain access to higher LTV and AOV when they offer subscriptions, plus better customer loyalty and retention.
- Subscriptions can simplify the customer experience for shoppers with increased flexibility and control over their orders.
How to enhance the customer experience with subscriptions
Focusing on enhancing the customer journey for your subscribers can lead to higher revenue and increased LTV. In fact, our research found that the LTV of a subscriber is 46% higher than an average customer—marking a huge difference between one-time customers and those who return again and again.
The LTV of a subscriber is 46% higher than an average customer.
Below we’ll cover a few different ways merchants can enhance the customer journey with subscriptions, from offering greater flexibility to creating bundling options. These strategies will help you hone in on your subscription offerings and optimize them for your customers.
1. Offer multiple plan options for subscribers
One way to ensure customers are satisfied with your subscriptions is to offer multiple plan options—not only for the cadence of delivery, but also for how often they’ll be charged. Studies have shown that 80% of consumers are more likely to make a purchase when businesses provide a personalized experience, including through subscription options.
Whether you offer prepaid subscription plans or charge customers at a set interval—such as monthly, bi-monthly, or annually—putting the choice in your subscribers’ hands will ensure they sign up for the subscription that will be most convenient for them. Plus, setting delivery dates at the right intervals will mean subscribers never run out of product or have too much on their hands.
As you create and change your subscription offerings, use customer data to see which plans are the most popular and successful, and which could use some adjusting. Soon, you’ll find that magic sweet spot that leaves customers satisfied and sticking with your brand.
2. Put flexibility first & give customers control
The beauty of subscriptions is that they allow you to build deeper relationships with your customers. Putting flexibility first in this relationship is key—give your subscribers the power to easily pause, skip, or swap products in their orders. When you allow customers to simply pause their subscriptions, you can reduce cancellations by 10%. This is a huge win for merchants, especially in the face of rising customer acquisition costs (CAC), and makes life easier for your customers.
Giving customers the option to pause their subscriptions can reduce cancellations by 10%.
You can also give subscribers access to their customer portal via passwordless login. From their customer portal, customers should be able to make any changes to their order, read important information about products, and have access to value-adding content tied to your brand.
3. Keep subscribers in the loop with consistent communication
Another sure way to enhance the customer experience, especially for subscribers, is to have consistent, clear communication with them. There are a number of channels that brands can use to do this, including email, SMS, and through the customer portal.
With Recharge’s Klaviyo integration, merchants can consistently communicate with their customers—and drive sales—through automated email and SMS messages. They can also create personalized product recommendations, run better ads on Facebook, and deliver post-purchase engagement campaigns.
4. Create bundling options
Offering product bundles is another great way to give your customers flexibility. With Bundles, merchants can curate complementary products to be sold together, or give customers the option to build their own bundles. Customers who use Bundles have been shown to have 2.7x higher LTV than those who don’t use Bundles. Diversify your offerings with bundling options and give customers even more options to get the products they want.
5. Make loyalty a top priority
With exclusive rewards and benefits, your store can encourage customers to become loyal members of your brand community—meaning they’ll be incentivized to return again and again. Loyalty gives merchants the ability to offer:
- Discounted pricing
- Free gifts
- Cash-back incentives
- Exclusive access to sales and new products
- Free or discounted shipping
Furthermore, merchants can a offer paid membership program to keep customers more engaged with their brand. 60% of paid loyalty program members are more likely to spend more on a brand after joining—making a membership program a valuable asset for ecommerce merchants.
60% of paid loyalty program members are more likely to spend more on a brand after joining.
6. Continually optimize & use A/B testing
Personalization is one of the keys to a great customer experience, especially when it comes to online shopping. With Flows, merchants can quickly test and iterate to create the most ideal customer journey that can drive an increase in LTV and customer satisfaction. Thanks to advanced data and analytics, including A/B testing, merchants can see what tactics are driving the most sales while:
- Surprising and delighting customers
- Offering targeted upsells
- Mitigating active churn
- Preventing passive churn
Utilizing subscriptions for the ultimate customer journey
Thanks to the recurring nature of subscriptions, merchants can build deeper relationships with customers and offer a better, more personalized customer experience. By enabling the strategies covered in this blog post, you can offer a level of ease and flexibility that will attract and retain loyal customers—and help you grow your LTV.
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 Subscriptions (Recharge)
 The State of Subscription Commerce 2023 (Recharge)
 6 Personalization Tips for a Better Customer Experience (CMSWire)
 Reduce your cancellations by 10% with pause subscriptions (Recharge)
 Bundles (Recharge)
 2.7x higher LTV: Enhancing the customer journey with Bundles (Recharge)
 Loyalty (Recharge)
 Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand (McKinsey & Company)
 Flows (Recharge)