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6 Tips to Retain Subscription Services Customers 

Richard Shapiro | Jul 18, 2017 250 views 2 Comments

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Subscription services are unique business models and companies are struggling with how to retain those customers. Blue Apron is a good example.  Blue Apron just announced that loyal customers are hard to find.  According to a recent article in The Wall Street Journal, “…to keep up its blistering growth and live up to its targeted $3 billion valuation, Blue Apron has had to replace a large share of customers who quit after trying the food and woo ever more people through ads and free offers. As a result, its marketing costs as a percentage of revenue rose to 25 percent in the first quarter, contributing to a $53 million dollar loss.”  Companies like Blue Apron forget that it is imperative to give customers the love and attention they need to stick around.



Although I am not a Blue Apron customer, I do use other subscription services.  I am a very loyal customer of Harry’s, a subscription service for razors.   Harry’s is a company that seems to be doing many things well.  When my son signed up in 2015, he received the following note, personalized and signed by Katie, his specific go-to person, which made him feel very welcomed from the start.  That individual customer care is what I advocate: creating a perfect beginning to a long-term relationship.

Hi there,

My name is Katie and I’m a member of the Harry’s team. I just wanted to reach out and say thanks so much for supporting Harry’s.

You are important to us and I am here to personally help you however I can. Please don’t hesitate to reach out with any thoughts or questions about our products (or shaving or life in general.)

Also, if you ever want more blades or shaving cream, I’d be more than happy to take care of that for you. You can just email me back or call me at (888) 212-6855 and I’ll place your order for you. And, of course, you can also always order more on harrys.com.

Thanks again for your support and I hope to speak soon!

All the best,

Katie

I was so impressed by the welcoming message my son received, I joined Harry’s about 6 months later. I also received a nice note signed by the founders, Andy Katz-Mayfield and Jeff Raider.  It wasn’t quite as personal as the one my son received from Katie, but the correspondence still gets a B+.

Subscription services need to worry about retaining customers, just like every other retail business.  These are my 6 tips on how subscription services can retain customers by continuing to show love and attention. Without these steps, subscription service customers are as just as vulnerable as a customer who purchases a one-time deal.

  1. Welcome: Send all new customers a welcoming and personalized letter, like the one signed by Katie. This shows the customer they matter and makes them feel important.
  2. Help: Most customers are going to self-serve 90%of the time, but when they have a question or a concern it’s extremely important that there is a specific representative to communicate with from day one (who was introduced in your welcome letter). If it’s not possible to assign an individual, create a small team who are familiar with each customer in their group.
  3. Feedback: After the first delivery, send the customer an email and ask for their specific detailed feedback. If you don’t hear from the customer, call or text. This is a critical step. It’s possible that the customer isn’t happy or doesn’t understand something about the service or has a question about the product. A critical question to include is how the product or service compares to ones they have purchased in the past from other companies. This is especially important when the product or application is not new or unique.
  4. Reviews: Monitor review sites and social media for positive and negative comments and respond quickly to both.
  5. Suspension: Make it easy to suspend shipments or make changes to automatic shipments, especially subscription services for perishable products. Don’t charge the customer a fee to suspend or restart service because that’s just encouraging a complete cancellation.
  6. Quality: Ensure quality remains consistent and either meets or exceeds customer expectations. In January 2014, Harry’s purchased the Feintechnik razor factory in Germany for a reported $100 million in an effort to provide control over the entire manufacturing process of their products.

A subscription service is an assumed relationship.  You get someone to sign up for a year of products and assume they’ll keep up with it and not cancel.  As we see with Blue Apron and other subscription services that are having difficult times, the model isn’t working. The missing piece is the human connection and building a relationship with the customer.

The strongest bond in any businessand in any industry, is the relationship that one person has with another. Subscription Service customers need to be constantly romanced and reminded that the company values and appreciates their business every time a package is sent, even if it is done so automatically.

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2 Responses to 6 Tips to Retain Subscription Services Customers

  1. Andrew Rudin July 19, 2017 at 4:56 pm (244 comments) #

    Hi Richard: with marketing costs as high as 25% of revenue, I don’t think anyone can accuse Blue Apron of not dishing up generous portions of customer love. And I’m certain that nobody in the company’s marketing department assumes a signed customer will hang in for a 12-month subscription. Disclosure: I’m not a Blue Apron Customer, nor are they a client.

    Your recommendations are solid, but I think the company’s churn problem has more to do with their product than with the attention they lavish on their customers – or the perceived lack of it. I’ve read a number of articles about the company’s marketing challenges. The most recent one was by an accomplished New York City-based chef who was ambivalent about Blue Apron.

    One the one hand, she applauded that Blue Apron makes it possible for people who lack confidence in their culinary skills to make a decent home-prepared meal. On the other hand, she likened their offering to “training wheels” for the kitchen-challenged. Once a Blue Apron customer prepares few meals, they can shed the “training wheels,” and do the same things on their own. Goodbye, Blue Apron! To make matters worse, grocery stores and specialty food retailers can easily duplicate what Blue Apron does by kitting inventory, and placing it out for sale, or delivering it. The writer also fussed about the large amount of packaging waste (in her kit, three scallions were wrapped in cellophane). Another Blue Apron negative, if you’re into saving the environment, as I’ll bet a measurable number of their customers are.

    If you’re selling subscriptions, and your business model requires long-term customer retention, “Training wheels” is a horrible spot to be. No doubt the company’s management is keenly aware of that issue. Whether Blue Apron can adjust their offering with a compelling follow-on product that will hold subscribers longer remains to be seen.

  2. Richard Shapiro July 20, 2017 at 7:09 am (130 comments) #

    Hi Andrew, as usual thanks for your valued comments. You are definitely correct that the basic product for any company or service, including subscription services needs to be solid. I did note that Harry’s ensured consistent quality by purchasing its own factory, but in retrospect that one bullet didn’t go quite far enough. Thanks again for your continued insights. Richard

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