Magento Subscriptions - Begin Your Recurring Revenue Journey
Why Having the Option for Subscriptions Helps Businesses
The subscription industry has been growing at a rate of 200 percent since 2011. The popularity of the option to purchase a subscription should come as no surprise as they offer the consumer many benefits.
Convenience is about getting the most benefit with the least amount of effort. In today’s tech-based world, a customer can order a product with the push of a button- literally. They can sign onto your website from their smart phone, press a couple of buttons and have the desired product arrive at their front door within days. The only thing easier than that is to push that button and have a product (or products) continuously arrive at their front door without them ever having to do a thing. To press that button and then never have to think about putting the effort again (unless and until they want to end their subscription) is the ultimate convenience in the world of online shopping.
When a customer orders a subscription from your business, that is an agreement to have products repeatedly sent to the customer. Subscriptions are almost like items being sold in bulk, since the customer is technically going to be purchasing more than just one item in totality. Because so many items are being sold, it is easier to give them some sort of deal or discount. These prices attract more customers and keep current customers happy and eager to take advantage of such reasonable pricing. In addition to that, low prices are always something to talk about among friends. If a customer is happy with the cost of their subscription, they will most definitely spread the word. That means more happy customers for you.
When it comes to subscriptions, predictability is a benefit that can be enjoyed by both the consumer and by your business. The customer knows exactly what they have coming to them. The idea that they won’t have to worry about re-ordering a specific product because they know for sure that it is going to arrive at their door on the date it’s supposed to is a weight off of the shoulders of someone who doesn’t have the time to be worrying about keeping up with such things.
In the eyes of the business, predictability means something else entirely, but it is equally beneficial. A recurring purchase is easier to prepare for inventory wise. You know you’re going to need enough of certain products to last this customer or the many customers who’ve subscribed, until their subscriptions are up. Therefore, you know how much to order and how much to keep in stock way ahead of time.
B2C and B2B
When people think of subscriptions, they may naturally think of a situation where a customer is ordering something like a box full of assorted cosmetics that arrives at their door monthly. However subscriptions go far beyond that. For example, subscriptions are not always purchased by a consumer who needs a product for themselves. Subscriptions are convenient and useful to both B2B and B2C customers. B2C customers may be subscribed to something that they need to have sent to them in a predictable fashion in order to keep their customers happy.
Another form of subscriptions are subscriptions of services or of products that exist only digitally. Just because the thing being sold isn’t physically shipped to someone’s front door, doesn’t make any of the benefits less significant.
Rise Above the Competition by Building Customer Relationships
Having the option for your customer to subscribe to something is an opportunity for your business to stand out. When a customer subscribes, you are building a relationship with that consumer. Once that relationship is established, it’s all about loyalty. A customer who receives a product every month is going to think of your brand every single time that package arrives. They are also more likely to discuss it with friends and family.
Having subscriptions are also an opportunity for you as the business to reach out to customers more often. It’s an opportunity to send out “Thank You’s” and promotions to the customer, which keeps the relationship going.
Studies show that it’s 5 times more expensive to obtain a new customer than to maintain a current one. In addition, 41% of total revenue comes from repeat customers. With repeat customers making up only 8% of total base, this is a huge motivation to encourage repeat business.
More Benefits of Subscriptions
Subscriptions lower your total cost of acquisition, they make forecasting much easier because subscription revenue is predictable.
Subscriptions help you to understand changing customer needs
Lots of built in touch points allow you to collect much better data on changing customer preferences. You can then use this data to make decisions about marketing and customer communication/billing schedules.
The Subscriptions Module Features
The Subscriptions Module lets customers order a recurring delivery of products on a basis of their choosing – monthly, weekly or even daily. This can be customized to show only some of these options to the customer.
The task of implementing a subscription service on the back-end, while also making it customer-friendly on the front-end, may seem like an intimidating business challenge. However, growing your digital channels with the implementation of a subscription strategy is not only do-able; but an easy task to accomplish with the Subscriptions Module created by Web Solutions NYC
As a partner of the e-commerce platform, Magento, Web Solutions NYC is a team of 100% Magento certified experts who can help you meet your business’s specific goals.
Click here to contact us and learn more about what Web Solutions NYC can do for your business.