Did you know that 70% of business executives believe that subscription models are the future of successful organizations? It’s critical that you take advantage of this model as a startup.
Here, we’re going to look into how to start a subscription business that customers will love. Read on to learn about developing, understanding, and marketing your next great idea.
Have a Great Product or Concept
Before creating a product that people can subscribe to, it’s important to understand the types of offerings that subscription businesses offer. The first is an access subscription that gives subscribers the chance to get in on a service. Streaming platforms like Netflix are a good example, as are free shipping memberships like Amazon Prime.
Replenishment services like Amazon Subscribe and Save will send you recurring shipments of household goods. This includes supplies like toilet paper, nonperishable foods, and similar necessities. These services are usually not feasible for startups since they have high starting costs. So, you need to decide on your service and goal, based on which you can choose subscription KPIs that can help identify if your business is feasible.
The type of subscription most startups like to offer is a curation service. This category encompasses the fun subscription boxes that you’re probably thinking of building and curating. Subscription box business examples include Ipsy, Illumicrate, and BarkBox.
Choose Your Passion
Assuming that you’re going for a curation box, you need to think about the items that you want to sell. Your specialization should be something that you’re passionate and knowledgeable about. This will let you properly curate your box and have fun doing it.
You can send handmade or hand-picked wholesale items out to your audience including jewelry and apparel. Books and commissioned merchandise are good if you want to get in with some online book communities.
You also may like to ship out seasonal items- sending subscribers a mug, some hot chocolate packets, and fuzzy socks in the winter is an unbeatable idea. After winter’s over, they can also look forward to a pastel-filled spring box with accessories, gardening tools, and more.
Once you determine the type of items that you want, calculate how much it’s going to cost you upfront. Think about the number of items that you can reasonably fit in a single box. Make sure that there’s at least one high-value item in a box- you don’t want to turn people away by being cheap.
Studies show that people value an object more when they feel that they own it.
Cornell researchers gave students two items of very little value and surveyed them. They found that half of the students wanted each item prior to the distribution of goods. After the students actually were given the items, though, only 10% of them chose to trade theirs away, presenting the Endowment Effect at full force.
Subscription box owners can use this principle when curating goods. Custom subscription boxes can incorporate the names or initials of those who buy them within the items. Even if the personalized items are low-value, they’ll make consumers value the entire box more.
You can also allow for other customization features in your subscription box. Let people choose the color shirt they want. Ask them whether they prefer floral or spicy flavors before shipping out tea.
This will provide people with the feeling of autonomy that stems from a choice. They’ll feel more valued when you take their input into account. Having 2-3 different products that you include in boxes based on feedback is inexpensive, simple, and can make all the difference when it comes to business.
Find Your Target Audience
Once you have your product, it’s time to look into the people that might be interested in purchasing it. Some of this is common sense. If you’re selling a box of women’s jewelry, your target audience will obviously be young and women. If your box is full of high-end items, you’ll need to target consumers with high-income occupations.
Still, you might need to gather some data. Look at subscription services similar to yours. Go to social media and see if there’s a prevalent demographic that seems interested in your types of items.
Run these subscription service’s official websites through Google Analytics. You can see what types of people click on and subscribe to their boxes. Once you’re up and running, you can get more accurate information by running your own site through Analytics and seeing who’s clicking on your page (and making payments) the most frequently.
Get the Word of Your Business Out There
One of the best ways that you can begin marketing your business is via customer segmentation. This divides customers into specific demographics so that you can develop marketing strategies to target all facets of your audience.
For example, if you’re selling a box of apparel that appeals to both middle-aged moms and college women, you can break these two parts of your audience away from each other. This lets you create distinct ads that appeal to each group (since the other group’s ads may turn them away). Find out how this strategy works and implement it ASAP!
At this point, you should start to create appealing and engaging ads. Graphic content is a must-have here since images are much more engaging than text. Moving images, video, and interactive content are even better.
Upload your unique designs to Google Ads and enter in your budget and demographic. Do the same on social media platforms like Instagram and Facebook. Launch the campaign and watch as your subscription site gets more traffic than ever before.
Beyond How to Start a Subscription Business
Subscription businesses are all the rage going into 2022. Whether you want to sell software subscription plans or boxes of niche merchandise, target audiences are sure to prefer these product distribution models. After all, you’ll always be adapting, updating, and optimizing your product.
Now that you know how to start a subscription business, it’s time to get started. Check out the ‘business’ tab on our home page for some ideas on how to get your startup off the ground.