DTC Product Subscriptions: 10 Biggest Mistakes to Avoid!

DTC Product Subscriptions: 10 Biggest Mistakes

Every DTC brand on planet earth wishes they had exponential, SaaS-like revenue growth.

Well, what if I told you this revenue growth chart was from a DTC brand?

It’s not just your ordinary brand. It’s a brand that nailed subscriptions. Building an impervious subscription program is much harder than it seems on the surface. It requires impeccable attention to detail. But if done properly, your company will grow and attract a valuation multiple in the same manner as a SaaS company, not a DTC company.

I’ve overseen $200M+ in subscription revenue alone in my career- through my own brands, clients’ brands, and brands for which I consult/advise. I’ve seen it all: the good, the bad, the ugly.

I’ve felt the pain of making any of the below mistakes that you need to avoid.

The best subscription programs do not have any of the issues I outline below.

Keep reading and if your brand identifies with any of these 10, drop what you’re doing and correct it.

Top 10 Biggest Mistakes to Avoid in Order to Scale your Subscription Program:

1. Minimal or unclear incentive for subscription vs one-time purchase

2. Non-sensical or confusing subscription model. Example: offering monthly subscription when the product lasts >1mo.

3. Unclear messaging on how long the product should last (leads to reluctance of customers to subscribe when they’re unsure of frequency). Example: 16oz shampoo bottle for males. How long would this last? I have no idea off the top of my head. If the brand told me I needed one bottle every 2 months based on my hairwash frequency, I’d know to subscribe at 2mo intervals. Without the brand TELLING me this, I’d never subscribe!

4. Challenging for subscribers to edit frequency of orders (ex: customer portal post-purchase email goes to Spam folder and nobody can find it)

5. No emphasis on winback of churned subscribers (email/SMS winback, retargeting ads on paid media, direct mail).

6. Product goes out of stock and causes significant backorder. This throws off your customers’ subscription regimens (customers will simply go subscribe to your competitor & you potentially lose them forever). I saw a brand go out of stock on a monthly subscription product for 2 months and 60% of their subscribers churned. Hard to recover from that.

7. Not checking "charge errors" order queue routinely to fix issues that are preventing orders from being re-billed. I’ve found hundreds of thousands of dollars of revenue "in queue” several times for brands by simply going into their charge errors and pushing through orders that had correctible issues.

8. Low product value:cost ratio. Your subscription needs to make financial sense. If it’s a monthly subscription, ask yourself if you’d pay $X per month to have this product delivered to you monthly.

9. No cross-selling or incentive for customers to add other subscription products. If you have multiple subscription products, be sure to cross-sell and incentivize customers to add the other subscription products to their monthly shipment. Whether it’s through tiered discounts for each additional product they add, one-time gift cards, special gifts, etc. Give reason and a little extra push for customers to expand their relationship with you.

10. Not customizing and optimizing the customer portal. The average customer logs in to their subscription portal multiple times over the course of their lifetime. Much like how shipping tracking pages were not being leveraged for free impressions for years on end, the same can be said for customer subscription portals. Ritual takes advantage of their customer portal phenomenally well.

    

    Snapshot of Ritual’s Customer Self-Serve Subscription Portal.

    They cross-sell their subscription SKUs in the customer portal and have excellent content within it! If I had to estimate, Ritual gets 1m+ free impressions per year with this method. They also make it seamless to edit your billing/shipping info or your delivery date and make it transparent when the order will be billed, shipped, and delivered. A+ work.

If you need help optimizing your brand’s subscription program, don’t hesitate to reach out. You can get in touch with my team and I HERE.

Yours truly,

Jonathan Snow

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