Why flexibility is critical for a successful enterprise subscription model

A surge in popularity has grown the subscription economy by a staggering 435% over the last decade — taking subscriptions from a niche strategy to a core business model across industries, even moving offline and into retail stores. 

For enterprise brands, this shift comes with opportunities for accelerated innovation and revenue growth. But the other side of that coin can come with significant operational challenges as large, complex brands adopt new technology and continue to scale.

It would be an understatement to say that the stakes are high for brands seeking enterprise-ready subscription management software. On top of increased pressure to grow profits, accelerate innovation, and optimize end-to-end operations, enterprise brands need their subscription offering to meet heightened consumer expectations — and deliver measurable returns today, tomorrow, and years into the future. 

Needless to say, finding a subscription solution that ticks all of those boxes can be a tall order.

When it comes to choosing a powerful enterprise technology that keeps brands ahead of the competition — and ever-changing consumer needs — within a booming subscription economy, flexibility is the key ingredient to look for. 

In this article, we’ll unpack the economics, trends, and operational considerations that make flexible technology a must-have for an enterprise subscription model that delivers what really matters: profitable growth built on indispensable customer relationships.

What recent changes in the subscription economy mean for enterprise brands

Most enterprise brands are acutely aware of the “customer acquisition crisis” that’s been turning unit economics upside down over the last ten years — and tempting them to outspend competitors rather than outsmart them. 

In a perfect world, the antidote to rising customer acquisition costs (CAC) would simply be to increase lifetime value (LTV). But with more brands than ever rolling out a subscription offer, it’s only getting harder to craft frictionless customer experiences that actually move the needle on LTV — let alone spark long-term profitable growth. 

Complicating matters even further is that despite clear demand around the world for convenient, high-value subscriber experiences, consumers are holding tighter to every dollar and raising the bar for which products and services make the cut. 

According to new research from PwC, exceeding these heightened expectations pays off with a chance to win more wallet share through increased loyalty and a 16% price premium — while sub-par experiences drive the modern consumer away almost immediately, with 17% taking their business elsewhere after just one less-than-dazzling purchase.

With that in mind, enterprise brands need to be able to innovate quickly and respond to new consumer preferences to maximize the benefits of the subscription model — and ultimately unlock better acquisition, retention, LTV, and recurring revenue at scale. 

That’s where flexible, scalable technology comes in.

Overcoming common operational challenges in enterprise-level subscription management

An age-old question for technology and brand leaders is whether to buy versus build their software. 

Once upon a time, homegrown subscription technology was the only way a visionary brand could deliver a bespoke subscriber experience, complete with customizations more advanced than a simple subscription app would allow. 

That’s why so many of today’s biggest brands initially chose to take on the short and long-term investment of building and maintaining homegrown software to get their subscription experience off the ground — and eventually discovered that the real cost of inflexible technology was future innovation. 

After launching subscriptions with software built in-house — and eventually finding that their homegrown tech stack was costing them the ability to innovate and delight their millions of subscribers — Dollar Shave Club became one of the first major brands to discover that upgrading to more flexible technology was a key part of the formula for driving recurring revenue and profitable growth with innovative subscriber experiences. 

“We were spending about 40% of our existing resources on maintenance support,” said Ranil Wiratunga, Chief Digital Officer & Global GM of DTC at Dollar Shave Club. “So we had to balance that maintenance with where we were going to push customer journeys and customer experiences in the future. We didn’t have the manpower and the resources to support both of those visions.”

The maintenance costs are easy to underestimate before brands start building. At first glance, it seems like only a few simple functionalities are needed — enrollment offers and a subscriber management dashboard at most. But those don’t cover everything leading brands need to draw in subscribers, let alone scale — they’re just the tip of the iceberg. 

Because without flexible technology powering their subscriptions, enterprise brands have to invest precious development resources into reinventing the wheel instead of building differentiated customer experiences. 

And that inability to innovate can quickly turn into a multi-million dollar opportunity cost.   

Flexible subscription technology fuels innovations that ignite subscriber loyalty

The takeaway for enterprise brands is that a successful subscription model is about more than the core features. To outshine competitors and become truly indispensable to customers, enterprise brands need to move fast when new market trends and consumer behaviors emerge — and to do that, they need a flexible subscription solution. 

Flexible technology ensures e.l.f. Cosmetics can move at the speed of culture with innovations to grow subscription revenue 

e.l.f. Cosmetics is a perfect example of a leading brand using Ordergroove’s subscription technology to ensure they can move at the speed of culture. 

Having gone from disruptor to beauty space incumbent, even overtaking the most established brands in the space in recent years, e.l.f. knew their highly engaged audience would translate into explosive subscription growth with the right promotional strategy. 

With Ordergroove’s strategic guidance, e.l.f. launched an innovative tired promotion structure designed to convert new site visitors and existing customers into subscribers with free shipping and 15% off their first order — and reward existing subscribers for their continued purchases with 20% off their second order, and 25% off their third order. 

Taking a creative approach to subscription promotions not only grew e.l.f.’s subscriber base a whopping 235% year-over-year — laying a strong foundation for a dialed-in, loyal community they can rely on through future trend cycles — but also made each subscriber more valuable to the business, with 62% higher recurring revenue during the same period. 

Stumptown uses flexible technology to build curated, rotating club experiences that retain subscribers for the long haul 

While the early 2020s saw more brands than ever offering the same subscriber benefits, Stumptown saw an opportunity to use Ordergroove’s flexible rotating club capabilities to take their existing subscribe and save model to the next level — and developed two curated subscriber experiences to surprise and delight customers with a rotating selection of coffees in each shipment. 

The innovative experience came with benefits for subscribers and Stumptown alike. As subscribers get introduced to new coffee flavors, they develop new interests and tastes that keep them excited about each new order instead of churning due to subscription fatigue — so, Stumptown’s customer relationships last longer and drive more profit with curated subscriber experiences.

But their business also benefits from predictable inventory management thanks to the merchant-controlled product discovery that curated subscriptions enable. “It’s easier to plan the volumes we need and plan inventory months in advance with our curated offerings,” said Dave Oliva, Sr. Manager of eCommerce Growth at Stumptown. “If our sourcing team gets an opportunity to purchase an exciting green coffee, they can buy it up with confidence knowing that the coffee is already sold to our curation subscribers.”

OLLY maxes out LTV by giving subscribers maximum flexibility over their orders

As a break-out vitamin brand with legions of Millennial fans, OLLY has always kept subscriptions at the core of their eCommerce investments — but when their initial subscription provider failed to deliver the flexible order management experience their customers craved, OLLY upgraded to Ordergroove to give subscribers the convenience and control they deserved. 

Ordergroove’s intuitive subscription management dashboard gave OLLY’s subscribers a dedicated place to manage and adjust their upcoming orders, whether they wanted to skip or pause an order — and even swap a product or add-on a one to try. 

For OLLY, a frictionless subscriber experience was an investment in better relationships with their most valuable customers — and it paid off with 3.5x higher subscriber LTV compared to non-subscribers.

Frictionless customer experiences start with flexible technology

The future of the enterprise subscription model belongs to the brands that lead the charge and take every opportunity to get ahead of consumer expectations, carve out their own place in the market, and ensure that every profit driver is operating at its full potential.

An enterprise-scale recurring revenue engine needs flexibility at its core. By investing in flexible subscription management software that sparks innovation and offers seamless integrations with the rest of the tech stack, enterprise brands can future-proof their subscription model and stay the course for long-term profitable growth. 

When it comes to the imperative of innovation, move faster. Scale with the confidence of a battle-tested, globally engaged, and pioneering partner that is already serving the most iconic brands in commerce. Join the subscription-first brands deploying resources towards growth, and leave the rest to Ordergroove — all at less than 50% of the cost to build. Get in touch today.