Historically, consumers have been nervous about entering lengthy contract terms on a pay monthly basis. There has been a surge of brands embracing subscription models across different verticals such as fashion, editorial, gaming and telecommunications. To ease the commitment, worry of a subscription brands are increasingly offering ‘cancellation at any time’, meaning that competition is heating up and the appetite amongst consumers is on the rise.
At iProspect we have put together some key points to help you develop a robust subscription products Affiliate approach.
Lifetime Value (LTV) – When making data driven decisions LTV will be a key factor in deciding the amount paid for cost per acquisition (CPA) on cashback or media inventory. The core objectives of a subscription product should be two-fold; (1) To increase LTV of users, which means they spend more with the brand over time and (2) to keep consumers engaged so that they do not start looking for alternatives. These two points complement each other to enhance loyalty and progressively increase a customer base.
Customer Retention – It’s important to note that CPA for a subscription-based product which is based on estimated time duration an average user stays with the brand cannot be same as CPA for a one-time purchase. This means it’s imperative to keep a close eye on customer engagement and retention. Brands need to have a balanced acquisition and retention strategy to sustain ROI.
Transparency – Nothing destroys the reputation and trust of a brand more than false advertising. The Advertising Standards Authority (ASA) keeps a close eye on advertising and has the right to penalise brands failing to adhere to the general guidelines using deceptive offers or ad copy. With increasing number of brands starting to implement influencers as a part of their overall digital strategy, transparency plays a much critical role than ever before. When users subscribe to a product or service, they should know exactly how much they are expected to pay, how often and what they get in return. Delivering more than promised creates loyalty and a feeling of belonging among customers.
Innovation – With ever-growing competition in eCommerce and brands investing heavily to create unique products and services to stand out, it’s imperative to innovate. Brands with a culture of innovation outperform competition and keep their customers excited and engaged for longer periods of time. A business that understand not just the current needs of their consumers, but also anticipates what they would need in the next 6-12 months are the ones truly setting themselves up for success. This sums up in the famous words of Henry Ford (founder of Ford Motors), “If I had asked people what they wanted, they have would have said faster horses”.
Test, Learn and Scale – At iProspect, we encourage our clients to test and learn with campaigns with smaller budgets before creating a robust plan with recommendations on how to scale them and subsequently increase Return on Investment (ROI). Testing allows us to mitigate the risk for our clients and helps us target the appropriate set of demographics that have appetite for our clients products or services.
If you feel the blog might have missed something in your experience in marketing subscription models, we would love to hear from you in the comments below.