Industry-leading subscription service brands know all about running promotions to keep a lead generation funnel ticking over. Free trials from companies such as Amazon and Netflix are the most common examples, but in an ever-evolving marketplace, businesses are finding powerful new incentives to attract customers.
Mallory Walsh, Director of Marketing at Chargebee, gives the SUBTA community a rundown on some tried-and-tested approaches to creating a successful lead generation funnel for your subscription service, as well as some more left-field options, and possible pitfalls to avoid.
Read on to discover how to run promotions that can set you apart from other subscription brands, grow your customer base, and tap into the potential of your existing clients.
Freebies & Discounts
For retail brands wanting to dip a toe into the subscription commerce world, offers like ‘Subscribe and Save‘ or a free first box feel safe — and they’re common. But for dedicated subscription businesses looking to grow, Walsh explains that free trials and big discounts tend to be more effective than smaller offers.
“It really pays to be confident in the quality of your product, and reflect that confidence by offering big discounts – or even a free trial or free first box,” she explains.
Walsh elaborates: “For example, rather than charging $35 per month and offering 10% off the first month’s box, sell the boxes at $45 per month and offer the first month free.”
Offering a free trial might cause you to raise the cost of your monthly subscription by $10, but offering the first month free will often buy your subscription greater confidence and value in your customers’ eyes.
As a simple-yet-effective approach, discounts, free trials, and gifts are staples for subscription brands looking to drive a lead generation funnel. Some examples currently listed in the top-performing U.S. subscription services for 2021 include:
Walsh points out that free-trial offers are an extremely effective way of signing up new subscribers, and an approach that service providers are quick to deploy as an incentive at little or no cost to themselves (Amazon Prime — we’re looking at you).
The Power of Referrals for a Lead Generation Funnel
“Referral campaigns are extremely popular, and allow you to explore opportunities to give the referrer an incentive, as well as the referee,” says Walsh.
“No matter what you do, be sure to nurture your leads once they sign up so it’s not just a one-month relationship. Think through how you’re going to nurture them based on the promotion you’re offering.”
Not only do discounts, voucher codes, and freebies provide ways to reward existing subscribers’ loyalty, they also provide big incentives to do much of the legwork of pulling in more of your target demographic (from friends and family) into the top of your lead generation funnel.
So while a referral program offers an opportunity to maintain the relationship with your customers, it also acts as a huge driver for new sales. Trust plays a big role in overcoming resistance to new sales, and your customers’ referrals bridge that gap.
Think “Outside of the Box”
“Consider experiential offers as well, like offering access to virtual events. Beauty brands like FabFitFun and Sparkle Hustle Grow are great at this,” says Walsh.
She continues by pointing out that “access to online communities or training and resources increase brand visibility and are extremely effective at driving traffic to your lead generation funnel.”
In 2018, Blue Apron ran a high-profile experiential campaign with its “Unboxed” interactive cooking experiences across different locations and with different themes. Public events like this work well at creating a buzz that raises a brand’s profile and introduces it to a new customer base.
With the two-in-one benefit of increased customer engagement and increased brand awareness, Walsh sees experiential offers as a trend that is set to continue to grow.
Maintaining Your Lead Generation Funnel
Customer churn rate is a term used to describe the percentage of people that terminate their relationship with a business over a given period. A high rate of customer churn is a huge red flag for the health and long-term viability of a subscription business.
And when you factor in that a 5% increase in retaining customers is reported to boost profits from between 25-95%, it goes without saying nurturing your customer base is a vital stage in your lead generation funnel.
Walsh recommends a few simple principles to maintain good relations:
- Build loyalty. “It’s all about loyalty, not just customer acquisition,” Walsh says. “Building a strong relationship among people who already have positive experiences with your subscription is a great way to do this.”
- Be transparent. It’s essential that companies “be transparent, and don’t misrepresent [a] promotion. Food-delivery brands are notorious for this. People think they’re getting $60 off of their first order, but actually it’s $15 off your first four boxes – trying to hook you into a longer relationship which may turn people off from the start.”
- Give options. “Give plenty of self-serve options for canceling, pausing, or skipping, as well,” Walsh explains. “You’re far more likely to retain or win the customer back when you make it easy for them to manage their subscription preferences according to what works for them.”
These three principles alone provide a steady backbone for good customer relations.
Confidence in Pricing & Promotions
Pricing a product that drives up profit margins without scaring off customers is a potential tripwire in the creation of your lead generation funnel.
Have confidence in the quality of your product and go bigger.
Setting a higher price at the outset creates more wiggle room to introduce bigger discounts down the line. It also telegraphs the extra value you provide when you do run promotional offers.
Finally, Walsh encourages business owners to look at what other brands are doing and get comfortable with the idea of testing and experimenting with pricing.
“You don’t have to launch at one price and be stuck there forever. Experiment with a number of different lead-generating promotions and see what works best for your customer acquisition cost (CAC), lifetime value (LTV), and customer retention,” she says.
A successful lead generation funnel comes as a result of a certain amount of trial and error. Ultimately, the most beneficial promotions for you depend on the subscription service that you provide.