By: Cooper Voskuil, Account Manager
Earlier this month, I was lucky enough to fly to Santa Monica for the Recur Conference organized by SUBTA and ReCharge. Recur is a subscription industry event centered around collaboration between different members within the e-commerce recurring billing community. Through connecting, learning, and overall information sharing, Recur succeeded in helping all parties involved create better businesses.
The energy over the course of the two-day conference was high, filled with many new e-commerce businesses all eager to learn more about the subscription space and ways in which people attending the event could help solve their business needs. From the various fireside chats, panels, and networking conversations, here are my top 5 takeaways:
1) Social Impact is a MUST
Social impact is the effect an organization’s actions have on the well-being of the community. In this day and age, it is not enough to provide a product or service that merely meets someone’s needs. For brands to win amongst their competitors, it is essential that they focus on creating positive community change. Furthering your brand’s positive social impact has shown to both positively affect customer acquisition as well as customer retention. There are many forms of social impacts; it can come from giving a percentage of revenue to charity, creating a brand sponsored relief mission, or merely providing a product/service that is better for the environment. There are both small and large impacts an organization can take on to make a difference and win in the marketplace.
2) Strategically A/B Test Your Paid Traffic Sources
Monitoring the performance of your paid traffic channels is key to an e-commerce business’ success. Whether you are using a network like Jumbleberry, or buying your media internally, having a system in place to monitor your return on ad spend is essential to beating the competition. Gone are the days where brands allot a certain total marketing spend with no clear indication of how many customers they will acquire in the end. Implementing even the most basic green, yellow, and red system to each of your different ad sets would make a tremendous amount of difference. The simple system would allow you to test whether you should scale your spend, maintain it, or even shut it down. Not only would A/B testing help your business win, in the long run, it will also save you time and money.
3) Work with Influencers the RIGHT way
Ever seen an Instagram post from the Kardashian’s promoting a product you KNOW they were paid to talk about, but would never personally use the product in reality? Because I do – and that’s when you know influencer marketing was done wrong. Brands need to do their research and seek out influencers who align with their mission and vision so they can make the most honest partnership possible. Brands should also focus less on the following an influencer has, and more on the amount of sales that the influencer is driving. Rather than simply making a post about your product, have the influencer create their own unique promo code and set up a revenue sharing contract so you only pay for ACTUAL performance and not PERCIEVED performance.
4) Buying on Facebook is not enough
It’s no secret that Facebook is increasingly becoming an expensive and volatile channel to acquire customers. The cost to acquire customers (CAC) has steadily increased and there is less cost certainty, not to mention the unpredictable nature of Facebook's ad approval process and account bans. As a result, direct-to-consumer (DTC) brands understand that they must have an omnichannel approach to their customer acquisition strategy and are beginning to invest more time and resources outside of Facebook.
What does that mean? It means these brands are spending a lot more time buying media or working with affiliate networks or agencies that can help them attract new customers via other paid platforms such as Google, Youtube, Pinterest, Linkedin, Snap, native, email etc.
5) Customer retention is the new acquisition.
Average order value (AOV) is certainly an important metric to monitor when investing in customer acquisition channels, but it doesn’t necessarily tell the whole story. Sub box brands are wising up to the fact that (AOV) is not the most important metric when evaluating the effectiveness of paid media, since it doesn’t fully represent what a customer is truly worth. Customer Lifetime Value (LTV) provides a much better prediction of the net profit attributed to the relationship that customer has with a brand, and therefore, should be more carefully considered when brands determine what they should pay to acquire new customers. Additionally, Sub box companies are beginning to understand the importance of post-purchase re-marketing efforts. Some common tactics include upselling, cross-selling, product discounts to keep customers on longer subscription cycles, etc. The fact of the matter is, most of the profits are realized post-purchase as companies monetize customers over the long run.
After attending Recur, it is clear that subscription box companies are in fact here to stay. Although a relatively new space, subscription e-commerce has growth by more than 100% every year over the past 5 years. There is huge opportunity for businesses to win through subscription offerings and it is through events like Recur, and takeaways like the ones mentioned above, that help make it happen.