Going beyond Subscribe & Save to scale recurring revenue with delightful experiences

Consumer demand for the convenience of subscriptions is only growing, with 53% of global consumers predicted to have at least one active retail subscription by 2025.

Whether brands are in a position to meet increased consumer demand for subscriptions is a different story — 95% of executives believe their customers are changing faster than they can change their business.

That’s why brands who can innovate quickly have the best shot at meeting customers’ desire for delightful subscription experiences — and are most likely to unlock better acquisition, retention, customer lifetime value, and recurring revenue in return.

On that front, we’re surfacing top insights shared in a recent panel discussion at SubscriptionX in London between Ordergroove, Philip Kingsley, and IAG Loyalty Retailers about developing innovative strategies that enable brands to scale swiftly while meeting ever-changing consumer demands, all at the same time.

When discounts aren’t enough to cut through the noise in a crowded subscription market

With subscription business growing 3.7 times faster than the S&P 500 over the last 11 years, the market is saturated with basic subscription offers — making experiences like Subscribe & Save table stakes among retailers selling subscriptions.

Consumers are always likely to appreciate the discounts and convenience that come with Subscribe & Save experiences, but for merchants they’re becoming a race to the bottom that can only be won by offering deeper discounts than their industry competitors — which jeopardizes profit margins, and just about every other business metric.

The antidote is thinking beyond the basics of a standard subscription experience.

In a sea of Subscribe & Save offers, the merchants who have found sustainable success in recent years are the ones dialing up the novelty and customization factors to deliver a more bespoke subscriber experience. In practice, that can look like prepaid subscriptions, build your own bundles, subscription boxes, rotating clubs, or any combination of innovative experiences a brand can dream up.

The secret is first understanding what your customers expect from a subscription experience — and what they gravitate towards in general — so you can tailor your innovation efforts to exceed their expectations.

Understanding subscribers is the first step towards exceeding their expectations

As an example of this philosophy in action, take The Wine Flyer, which is part of the British Airways brand family run by IAG Loyalty. The Wine Flyer is also the first business that deals in Avios, the group’s own loyalty currency.

“Our whole approach for The Wine Flyer is defined by our understanding of the time versus value equation for the customer,” said Hannah Jordaan, Head of Customer at IAG Loyalty Retailers. “We reward customers with Avios for each subscription wine purchase, so we have to understand exactly what they’re motivated by. Everything is designed around rewarding the customer for their engagement, and creating an aspirational experience that leads into their end goal — which is usually redeeming their Avios for a big, fabulous, trip.”

Customer needs should be the north star that guides subscription innovation, but for hair care brands like Philip Kingsley, what customers need from a subscription experience can also depend on the product or service itself.

“Our subscriptions have always been a direct response to customer needs — once they start treatment, most of our customers will need a consistent hair loss or scalp treatment plan for years, if not the rest of their life,” said Lauren Duncan, Head of eCommerce at Philip Kingsley. “But we took our subscription offering to the next level by combining them with the core of our brand USP — our trichology expertise and clinical services — because no one else in the space was doing it, even though most customers need both.”

The takeaway is that it’s not just about doing things differently for the sake of it. It’s about tailoring those points of differentiation to real customer needs relative to the qualities and characteristics of your product or service.

Testing to find the right advanced subscription experience for your customers

Understanding what customers want out of their subscription experience is only half the battle — brands also need to develop an offering that aligns to those findings, and test their execution to be 100% confident they’re hitting the mark.

“We did a lot of customer research for The Wine Flyer and found that they wanted consistent value and quality across the wine products, but they also wanted choice and control over the way they earned loyalty points for their purchases,” Hannah said. “So, we went to market with two different subscription experiences — one designed for savers, and one for those looking to accelerate their loyalty points.”

By closely monitoring the performance of both subscription experiences after launch, The Wine Flyer team quickly recognized that spreading themselves thin to capture two types of subscribers was taking a toll on both experiences.

“Testing made it clear we had to reel everything back into our wheelhouse, which is loyalty, so now everything is about boosting the loyalty points they earn,” said Hannah. “We set a very clear pathway for them to earn 20,000 Avios in their first year because we know what our customers are motivated by — and we’re single minded about bringing it to them.”

Crystal clear insights on what customers want are mission critical, but leading brands like Philip Kingsley prove that making a testing plan prior to launch is paramount for ensuring that optimizations stay a top priority.

“Before starting to develop our subscription incentives, we ran a customer survey to our own database to understand what would mean the most and actually add value for our customers, so we could build out those offers accordingly,” Lauren said. “That survey gave us the insights we needed to form a testing plan for our acquisition incentives that laid out the different mechanisms to steer people towards subscriptions over one-time purchases — and how we might be able to add extra value in month three or four to boost retention.”

Delivering a sophisticated subscription experience is one thing. Making sure it’s perfect for your customers is quite another.

“One of Ordergroove’s customers runs tests on their subscription experience every single day based on the data they’re seeing,” said Samantha Sussman, Group Lead Product Manager at Ordergroove. “And the Ordergroove platform gives them the flexibility they need to action those learnings and stay a step ahead.”

Beyond understanding what’s valuable to your customers and identifying data-driven adjustments, brands need to focus their resources on supporting not just timely tweaks — but continuous innovation and investment in revenue-generating activities.

Maximizing resources for subscription innovation and growth

The more brands learn about their customers, the more opportunities they’ll have to adapt their subscription experience accordingly. But to reliably drive growth, brands must be able to continuously test and iterate — even on the fly — which can come with logistical challenges.

Maximizing resources for subscription innovation and growth often comes down to an efficient tech stack. Take it from Philip Kingsley, who launched their first subscription experience with a homegrown subscription platform.

“Building the subscription platform from the ground up took a huge amount of resources to do, even after scaling back our vision and reducing the functionalities,” said Lauren. “When we went live, we realized we were spending most of our development resources and internal time fixing bugs and manually intervening with processes that would’ve been out-of-the-box if we had bought subscription software from day one.”

Investing more resources than expected is costly in its own right, but an even bigger price is usually paid down the line in the form of lost revenue.

“We freed up our internal resources by moving from our homegrown platform over to Ordergroove,” Lauren said. “And now being able to focus on scaling and growing our subscription proposition is opening up more opportunities to innovate and test new ideas. We just wouldn’t have had that capacity if we stayed with our homegrown solution”

It’s a similar story for the team at The Wine Flyer.

“We try to buy software and maximize out-of-the-box functionalities as much as we can,” said Hannah. “Which lets us focus more resources on A/B testing, and merchandising the best possible products to put in our subscription wine boxes. Now we can constantly iterate on what really matters, instead of trying to handle all of that subscription infrastructure independently.”

These first-hand experiences prove the importance of deploying as many resources as possible toward growth — and exactly how much the decision to buy then build subscription software can impact bandwidth for innovation.

“When Dollar Shave Club upgraded to Ordergroove from their homegrown solution, they were able to free up 40% of their development resources,” Samantha said. “That allowed them to redeploy those resources to growth initiatives and focus on what their expertise is — building the best experiences for their customers — instead of maintaining their subscription platform.”

The reality is that buying versus building subscription software aren’t mutually exclusive. In fact, buying a subscription platform that can be customized and built upon is how merchants can ensure they channel precious engineering resources into what matters — and keep a leg up on the competition for years to come.

Staying ahead of the innovation curve for long-term profitable growth

These are the high points brands can look forward to with a subscription platform they can buy and then build on top of:

• Go beyond Subscribe & Save experiences to respond to market trends quickly
• Build on top of strong foundations that will stay current and up-to-date without continuous investment of developer resources
• Free up bandwidth to test and optimize with more innovative subscription experiences
• Improve operations internally, and sharpen the brand’s competitive edge externally

To maximize those benefits and stay ahead of the subscription innovation curve, brands also need to seek out a range of learning outlets to anticipate the subscription trends of tomorrow.

On that front, there’s no shortage of valuable information for brands to tap into, from market trends from industry aggregators, to competitor research, as well as insights from partners in the agency world — and even technology partners like Ordergroove, who have spent the last decade leading brands and retailers into the next era of profitable growth.

“Because we’re in the beverage industry, our team at The Wine Flyer has to stay on top of what’s happening with consumer alcohol consumption and regulations,” said Hannah. “And working with partners like Ordergroove, who have such an impressive network and experience in the space, has really helped us recognize and react to trends faster than before.”

And merchants agree that it’s crucial to learn from the hard-earned wisdom of other great brands —

“I would echo all of that on behalf of all of us at Philip Kingsley,” said Lauren. “Working with Ordergroove has kept us on top of subscription best practices and innovations — not just in the beauty vertical — but across other industries or perspectives they’ve flagged relevant learnings from.”

You heard it here first from the teams at The Wine Flyer and Philip Kingsley — with the right subscription platform in your tech stack, you can go beyond Subscribe & Save to scale recurring revenue with delightful experiences, too.

Join the leading brands and retailers making it look easy with Ordergroove.