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12 key elements to build a wildly successful subscription box business

In their latest white paper, Ocean X, a subscription commerce platform, has identified 12 psychological ingredients that drive customers to sign up for, and stick with, physical subscriptions.

In today’s complex, often overwhelming world of unlimited choices, it’s easy to feel lost and unappreciated. At the same time, we’re engulfed in a digital space — we’re so consumed by it that we miss the opportunity to truly enjoy and be present. The balance of our interactions has increasingly shifted toward digital and away from real-world interactions, and our hyperconnected environment has disconnected us more than ever. It should come as no surprise, that people are seeking ways to connect and belong to something they can call their own, whether that’s a group, club, or team — it doesn’t matter as long as it feels like a real community.

That sense of belonging to a network can be delivered by a subscription program, when it’s done right. A well-designed subscription box business can feel like a close friend dropping by for a visit every month.

When brands and retailers develop and nurture ongoing relationships with their customers, they can provide rewarding experiences and help foster a sense of belonging. A well-executed direct-to-consumer subscription box program understands the needs, likes, and behaviors of its members and offers something far beyond just “fast” delivery and convenience. Subscriptions offer members value, convenience, curation, guided purchasing decisions, and much more.

12 key elements to build a successful subscription box business:

Belonging & being known

Humans are still tribal in many ways. We want to belong to something: a group, team, club, or organization. We want to be known, to be free from anonymity. This might mean having our latest Instagram post liked or, perhaps, having our favorite brand or celebrity connect with us in authentic, meaningful ways.

Dollar Shave Club, a California-based company, delivering razors and grooming products directly to consumers’ homes, is a perfect example of focusing on belonging in action. Belonging is essential to Dollar Shave Club’s brand message. Through its now-famous YouTube videos and commercials, founder Michael Dubin portrays a cool, “anti-corporate” image, something Dollar Shave Club’s core audience loves. Dubin and his team incorporate humor, cartoons, cards, and other interesting personalized touches to make subscribers feel like they’re part of something bigger than just a box of razors tossed on their doorsteps.

Anticipation & surprise

Sometimes the anticipation of an upcoming vacation or a new box curated by your favorite YouTube star can be as rewarding as the trip or products themselves.

ipsy-subscription-box

Beauty subscription box brands do an amazing job capitalizing on surprise and anticipation. Take Ipsy, for example: The influencer-driven beauty box brand makes the unboxing experience something to anticipate. It sends members a new, stylish bag with each delivery, and its loyal subscribers love to post their unboxing experiences on YouTube, Facebook, and Instagram. There’s always an element of surprise in terms of what will be in the next shipment.

Curation, exclusivity, & discovery

In the age of Amazon, we are increasingly overwhelmed with an abundance of choice. We assume more choices equals better options and higher satisfaction. But the proliferative amount of choice presented to us often renders us helpless and dissatisfied.

That’s where curation comes to the rescue. Curation, which sits at the core of many well-known subscription boxes, provides the feeling of a personalized guide to a greater overall experience. Whether it’s a professional stylist, celebrity, social influencer, or chef, it feels comforting when a trusted source selects or recommends products for us.

A curated experience is further enhanced when included products are exclusive — that is, they are in limited supply or simply not available elsewhere. The element of discovery, or finding a new product that solves a need or gives us joy, also adds to the feeling of satisfaction that can come with a subscription. A well-designed subscription doesn’t just give us what we expect, but it also inspires us to try new things. This phenomenon contributes to the huge success of fresh meal kits such as Blue Apron or Hello Fresh. With subscriptions like these, consumers get what they generally like and are also exposed to new ingredients and spices.

blue-apron-subscription-box
Blueapron.com

Expert celebrity stylist Rachel Zoe has curation, exclusivity, and discovery “in the bag” with her “Box of Style.” Members receive quarterly deliveries lled with items ranging from clothing and accessories to home goods, all pre-selected and approved by Zoe herself. The products come from well-known brands and newcomers alike, ensuring consumers are regularly exposed to goods they likely wouldn’t encounter otherwise.

Portioning & compliance

Focusing on portioning and compliance is not only a large and untapped opportunity, but it’s also a must when growing your subscription business for certain product categories.

Correctly portioning consumables like vitamins and many beauty and skincare products is difficult, especially if the products come in large containers. Bulk purchases lead to confusion, specifically overuse or underuse. This makes compliance with the product’s recommended use challenging. The correctly portioned product in combination with the right cadence — that is, timing between shipments — is essential for ideal results.

Dollar Shave Club’s monthly delivery of four razors each month leads to better shaves, higher customer satisfaction and, ultimately, more razors sold. For another example, consider Ritual, a personalized vitamin subscription business.

ritual-subscription-box
Ritual.com

Ritual sends subscribers a bottle of daily vitamins every month, and its website provides consumers with educational resources about the supplements including how and when they should be used for optimal results.

Value, convenience & replenishment

These three ingredients are fundamental to a successful subscription box business. Many first-time subscriptions focus just on these three core ingredients, which is not enough.

Value delivered beyond discounts, promotions, and coupons combined with the convenience of home delivery and the ease of replenishment with set deliveries makes for a truly outstanding subscription experience. A box of products purchased for a good price arriving at your doorstep just when you need it is the ultimate convenience.

Products that need to be replenished on a set frequency are ideal for subscription box businesses and have led to explosive growth of Amazon’s Subscribe and Save, which is an excellent example of value, convenience, and replenishment. The program might lack other key ingredients like curation or anticipation, but it dominates in paper towels, diapers, and similar products, and has helped lead the way to 42 percent growth in online consumer packaged goods sales last year.

Source: OceanX

Mantas Malukas

Entrepreneur, journalist & professional marketer certified by American Marketing Association (AMA), with over 12 years of progressive and diverse experience. Follow me on Twitter @mantasmalukas

Written by Mantas Malukas

Entrepreneur, journalist & professional marketer certified by American Marketing Association (AMA), with over 12 years of progressive and diverse experience. Follow me on Twitter @mantasmalukas