Should Your DTC Brand Adopt a Subscription Model?

If your brand has an influx of customers and consistent product inventory, consider adopting a DTC subscription model. At the core of the pandemic, when in-store shopping ground to a halt, consumers flocked to brands offering subscription services as a way to get products shipped to their door.  
 

While some pandemic–era trends have died out, the subscription model is still kicking. In fact, UBS predicts that the “subscription economy” will grow to $1.5 trillion by 2025, doubling what it is today. 

How to Get the Most from Your DTC Subscription Model

Offering a DTC subscription model can cohesively benefit consumers and businesses. It provides consumers with a fast, efficient, and affordable way to get their favorite products, and helps businesses boost revenue, expand reach, enhance the customer experience, and improve customer retention. Onboarding subscription customers is an investment in a long-term consumer relationship and potentially more from positive reviews and referrals. Successful subscription businesses offer direct promotions to subscription customers, strong customer service, exciting onboarding, and tactful personalization.
 

The Kearney Consumer Institute surveyed subscription services and found that more than half of respondents said they wanted to spend less than $50 a month on subscriptions. Offering direct promotions for subscription services that are tailored to specific customers enhances customer experience and convinces the consumer that your subscription services are worth the value. Competitive offers create higher conversion rates that lead to greater success metrics. 

In addition to having competitive offers, it’s important for brands to pay attention to crafting an exceptional customer experience. 
 

Other key factors to making subscription models worthwhile are: 

  • Delivering quality products
  • Offering a variety of products to select from
  • Providing superior customer service
  • Creating a simple onboarding process

Notable DTC Subscription Models

Many brands have had huge success with subscription models. Each one offers competitive prices for a niche industry. Use these success stories to inspire your future plans.
 
Dollar Shave Club
Dollar Shave Club offers shaving products tailored to each customer through a monthly subscription box. The benefits they list for the subscription are: 
  • Flexible delivery dates
  • No hidden fees
  • 30-Day money back guarantee
  • Club Pros to answer your questions
  • Cancel anytime online
Dollar Shave Club Subscription

Because of these benefits, Dollar Shave club has the highest customer retention among men’s grooming subscription companies.

Hertz
Hertz adopted a subscription business in the car rental industry. They label it as an alternative to owning or leasing your own vehicle. Their website highlights the benefits of this model. 

According to GlobeNewswire, car subscription market size is projected to reach USD 15.56 Billion by 2030. 

HelloFresh
For people who want to save time and money around meal time, HelloFresh offers a solution with recipes and fresh ingredients sent to customer’s doors each week. Each month, HelloFresh sends out 10 million meals. Customer retention is supported by the company’s unique weekly variety of meal selections and a system that rewards customers when they make consecutive weekly orders.

According to GlobeNewswire, car subscription market size is projected to reach USD 15.56 Billion by 2030. 

Will your brand join the successful DTC subscription models?

After seeing how some well-known brands have successfully adopted a DTC subscription model, you may want to consider implementing a subscription-based model for your own business. Here‘s how you can get started: 

1

Know your customers and their value

Having a firm grasp of who your customers are, what they’re looking for, and what you can offer them is the first step to creating a subscription model that works.

2

Offer flexible options

Not all of your customers are going to want the same thing. Offering different tiers that have unique pricing and products for your customers to choose from will encourage more people to be interested in your subscription services. 

3

Have a retention strategy

While subscription services like HelloFresh offer great deals to get customers started, it’s not always enough to keep subscription customers on board. Consider offering a rewards program for those who stay, like offering a special gift for every few boxes ordered. 

With the tips listed above, your brand could join those successful in implementing a direct-to-consumer subscription model. Remember to always keep your customers best interests at heart and your efforts will likely be rewarded with success.

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        Meto

        Meto is a tech-based nonprofit intent on making access to quality higher education a reality for all students. We have a special focus on creating scholarships for low-income students.


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