Picture this: After months of hard work, sleepless nights, and stressful days, you did it. You’ve finally launched your subscription box business, and the world is yours. You embrace your family, celebrate the big move with your partners and/or friends, and then look at the date.
It’s already mid-October. Black Friday is in four weeks, Cyber Monday is next in line, and of course, Christmas is impatiently waiting for you.
That’s what they don’t teach you in subscription school: It gets real very quickly once you hit that launch button.
The good news is that you’re not alone, and you’re definitely not the only one experiencing what we like to call the ‘holiday sweats.’ Many subscription entrepreneurs have been there before you, and they took some time to share their advice on how you can make the most of the 2021 holiday season.
Read on to learn the best holiday tips and tricks for your subscription box business thanks to Christie Kerner, the Founder and CEO of My Little Mascara Club, and Liam Brennan, the Co-Founder of Buster Box and Head of the Subscription Experts Academy.
My First Holiday Experience with a Subscription Box Business
Kerner officially launched her subscription box in 2019, but experienced her first real holiday season in 2020, at a time when uncertainty and chaos took over the world, and altered consumer behaviors.
“It’s really hard to be proactive in those first couple of years of business,” Kerner said. “But Black Friday, like the holiday stuff, is something that we absolutely have to be proactive for. If I could shake any founder by the shoulder, I’d be like ‘I know it’s July and August, but you really need to think about this and make it a priority!’”
Heading into her second holiday season, Kerner looks back on 2020 with an objective lens. Mistakes did happen, like the fact that she started preparing for the season in mid-October, and lessons were learned.
Proactivity is now Kerner’s mission, and she’ll shake you by the shoulders if it’s not yours.
What are three things every subscription entrepreneur should do?
- “Build your email list.”
- “Get a handle on your inventory projections. It’s tough because a lot of us outsource internationally and you never know what’s gonna happen.”
- “Give people something to buy. That sounds like something really abstract and obvious, but as a subscription, it can be tough for people to figure out how to gift a subscription, right? If we make it too hard for them to know what to lock into, what is the gift and how they can present it, and what it’s gonna feel like, then we’re gonna lose them.”
- “Work on your promotions beforehand. A lot of the time, people make mistakes when they don’t prepare any of this ahead of time, and then, before you know it, you’re in November with no assets.”
- “If possible, you should look to ‘warm up your pixel’ ahead of Black Friday. You can promote video ads before Black Friday, and basically build up a big pixel for retargeting.”
- “If you’re rolling a promotion for Black Friday, don’t leave it at the last minute to get your ads approved because what can happen is, they won’t be approved.”
Brennan launched his subscription box with his partners in April of 2016. Everyone worked full-time jobs at the time, so proactivity turned out to be a bigger challenge for the Buster Box team.
The co-founders experimented with a few strategies that year, and learned a lot of valuable lessons in the span of a few months.
“We were basically pushing out one-month subscriptions,” Brennan explained, “which was a really bad idea around Christmas time, because here’s what happens: Everybody comes in for the deal, gets their dog a present for Christmas, and you’ve got a really high churn in January.”
Fast forward to the 2017 holiday season, Brennan and his partners had a gameplan they knew would succeed. Buster Box heavily promoted six- and 12-month subscriptions to its targeted audience, and orders began piling up. One problem: It was only mid-November, and there was still a lot of money to be made.
Brennan and his associates came up with an idea: selling one-off gift baskets full of dog toys and treats. The company offered three different kinds of baskets: big, medium and small. The big one came with a dog bed while the smaller ones had all types of toys and treats. The results were as impressive as they were surprising:
“A lot of our existing subscribers actually bought these on top of their subscriptions,” Brennan said. “Because it’s Christmas, they’re either buying it for a friend’s dog or they’re just buying their dog something extra. So we ended up doing an extra — at the time, it was massive — I think it was an extra 20,000 euros in sales (roughly $23,600 at the time).”
The Right Marketing Approach for a Successful Holiday Season
What are some acquisition strategies to avoid when marketing your product during the holiday season?
“For sub box owners, there’s a sweet spot when it comes to discounting. In traditional e-commerce, it’s absolutely normal to give 40% off and do big sales discounts, especially during Black Friday. And that, I think, is not really appropriate for a brand that is subscription because it’s never ultimately going to be about that next sale to get that next order.”
“As far as paid advertising goes, Twitter ads are rubbish, to be honest with you. In my experience, anyway, it’s really, really expensive and you get nothing out of it.”
Neither Brennan nor Kerner had it all figured out the first time around. That’s the case for most founders. Both of these subscription entrepreneurs inadvertently used their first holiday experience as a trial run, pushed their ego and pride aside, and learned from it.
For example, Kerner took her time building a robust emailing list early during the launch phase of My Little Mascara Club. She segmented it properly and analyzed all the data she could based on her audience’s engagement. These precious insights will play a huge role for the 2021 holiday season, as long as she uses it efficiently, she explained.
“The balance that we have to ride is we can’t just continue to send emails to people that are kind of not engaging much on the list because then our reputation goes down and then our deliverability (open rate) goes down,” Kerner said.
“It’s so tempting to keep hitting them and hitting them and hitting them and shaking them by the shoulders with our emails like ‘Come on, you got here for a reason! Let me help you!’”
When Buster Box first launched, Brennan and his partners only relied on Facebook ads and some email marketing. The company optimized its strategy and is now rolling ads everywhere: Snapchat, Tik Tok, Facebook, you name it (as long as it’s not Twitter or LinkedIn). Its email marketing also improved, with some fun, creative promotional campaigns like the “10 Days Before Christmas.”
The strategy is simple: Send one email every day for 10 days straight with a different promotion attached each time.
The campaign performed very well, according to Brennan. “That kept people engaged,” he explained. “That kept people entertained. They were trying to think ‘Oh, should I go for the promotion today or should I wait for tomorrow’s promotion?’ We never told them what the promotions were going to be in advance.”
Other Acquisition Strategies Worth Implementing:
- Experiment: “This holiday, we’re experimenting to see if our women between 30s and 40s have teenage daughters that they want to give to, and we’ll see how that goes! “
- “There’s an old saying that goes like ‘Tell them what you’re gonna tell them, then tell them, then tell them what you told them.’ We use that in corporate training all the time but it absolutely applies for a sale, too. Like ‘Hey, there’s a sale coming, you don’t wanna miss it!’ And then ‘Hey, this is the sale!’ And then ‘Hey, remember that sale? It’s about to expire!’ That trio is a classic trio that helps humans zone in on something they are supposed to focus on.”
- Customize your box: “If you can do it, 100% do it. The thing with themes and stuff is that it keeps people engaged and it’s a nice surprise for them.”
- Optimize your website for mobile: “People put a lot of time into the desktop version of the website, and it might look brilliant. It might look absolutely perfect, and they’re looking for feedback from me. Every single time now, I open the websites up on my mobile, and I give them feedback on that.”
Bonus Watch: My Little Mascara Club competes in the 2021 SubSummit Pitch Competition Presented by Pitney Bowes
Keeping Your Subscribers After the Holidays
Brennan knows how to grow a subscription business. He’s successfully — with his partners — grown Buster Box into a seven-figure brand. However, the company didn’t even have a retention strategy in place during its first holiday season.
“It’s all about acquisition and getting people in,” Brennan said. “But as you get bigger, you obviously realize that retention, especially at a certain point, is actually more important than acquisition, because there’s only so many people that you can keep getting.”
Your retention strategy doesn’t have to be incredibly sophisticated when you start out. It’s all about efficiency.
Engage with Your Audience
There are many ways to keep your subscribers satisfied, and it’s all about finding what approach works best for you (and them, of course).
Kerner, for example, is a sucker for gamification.
“I’m one of the most logical people I know, and if you give me a badge on an app, I am doing that instead of whatever I should be doing,” she explained with a chuckle. “I respect that, and we created a game that we make available to customers and non-customers.” My Little Mascara Club offers free quizzes, a motivational quote of the day, and even trivia to website visitors who might be interested in the company’s offering.
Visitors can earn rewards if they log in for several days in a row or if they complete certain tasks, quizzes or other games offered to them. It’s all about getting to know who the subscriber or potential subscriber is, according to Kerner. This process enables her to get to know her audience while also helping them understand the company’s vision and mission.
Buster Box is also focused on gathering as much data as possible on its subscriber base. Brennan advises subscription startups to find out what are the biggest reasons a customer would want to opt out of a subscription. Is it a toy the dog never used? An unpopular food in the box? Figure it out and adjust your offering.
Your objective is simple: Give the customer exactly what they want.
This may lead you to expand your offering and create a variety of boxes that you know will be loved by your current — and most likely future — subscriber base. Brennan recalled a conversation with his business partner in which he was told Buster Box had roughly 70 subscription boxes going out every month. “If we never did that, we’d have much higher churn,” he said.
Remove Any Friction
Ever heard of involuntary churn? You will soon enough.
Failed payments can lose you a perfectly happy subscriber. Make sure you do everything in your power to keep them, because it’s not your product they dislike, it’s the time it takes them to update their credit or debit card information.
“If it’s a case where they have to login to the account, go search for the card option, it’s resistance,” Brennan explained. “People want the easiest option.”
Your dunning sequence — the process of communicating to your subscribers a payment has failed so that it can be recovered — also needs to be optimized, even if it only helps recover 15% of failed payments, according to Gravy. There are two keys to unlock a successful dunning sequence: Patience and persistence.
It can take up to 30 days for a payment to go through depending on when a subscriber gets paid in the month, according to Brennan. Don’t panic. Keep up with them via email and make sure they’re alerted that their card information needs to be updated.
Sometimes, the card doesn’t need any updates, the subscriber just wants to cancel (aka voluntary churn), and that’s okay. Well, it’s only okay provided you can figure out why the individual opted out of their subscription.
More Retention Tips from SUBTA
There are several systems that can automate churn reduction. If you’re just getting started in the space, Brennan has a proven, low-cost strategy:
“I would highly recommend getting on the phone,” he explained. “That’s what we did back in the day. If they had a failed payment, we spent an hour every week bringing those failed payments up to get some information off of them. ‘Hi, we have your box here, it’s ready to ship, we don’t want you to miss out. Do you need some help updating your card?’ ‘If you don’t want to continue with the subscription, can you tell us why?’ And you get some valuable data from it.”
Incorporating text messages into your dunning sequence can also be beneficial, though it costs more money. Brennan says that as long as you’re careful and you’re getting good return on the investment, it’s worth a shot.
There are a lot of uncertainties regarding the 2021 holidays due to Covid-19, but here’s what we know:
- Your subscription box will be competing with a lot of brands and ad prices will increase in Q4, according to Kerner and Brennan. Proactivity is key for your promotional campaigns.
- E-commerce sales are expected to account for close to 20% of total retail sales this holiday season, a new record, according to emarketer.
- You have the tools you need to succeed and a supportive community to lean on, so make this year count!
If you’re willing to learn every day, dedicate yourself to your craft, and are passionate about your work, success is within reach, rest assured.
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