How the subscription model helps retailers ensure years of customer loyalty
Posted by | Fuld & Company
Capturing market share means building one customer at a time, and the subscription model offers a proven way to achieve that goal.
There are three factors that primarily drive today’s purchase decisions – product, pricing, and customer experience. Retail is no exception. More than ever, customers expect a personalized experience, high convenience, and world-class service.
That perfect customer has become virtually unattainable in today’s competitive retail landscape. Distractions are everywhere, and customers are spoiled for choice, which is why it has become notoriously harder for retailers to retain their customers.
What can retailers learn from the subscription model?
Today, many software companies successfully offer their products as a subscription-based service. Retailers can learn much from this pervasive trend. The subscription model allows companies to build the desired one-to-one customer relationship.
The key to your successful subscription model is data analytics
To conduct effective multi-channel personalized campaigns, one needs data – lots of it. By collecting data ranging from browsing and shopping habits, to data collected during the sign-up stage, you can tailor sales and marketing campaigns to the unique needs of every customer. This approach offers a proven way to build customer loyalty. After all, people are more likely to continue buying if it is demonstrated that you have their interests at heart in the form of personalized offers and experiences.
The role of data in the personalized customer journey
One study showed that 83% of consumers are willing to share their data to enable a personalized shopping experience. At the same time, online privacy is a growing concern, and brands must be transparent about the collected data and why it’s collected. Insofar as consumers are concerned, collected personal data should clearly be for the customer’s personal benefit.
Providing a personalized experience at scale is best achieved using a combination of data analytics powered by AI, machine learning, and data science. With the subscription model, there are ample opportunities to collect the data necessary to leverage these solutions.
Expanding your revenue through subscription offerings
The impact of personalization on the bottom line cannot be underestimated. Companies using advanced personalization tactics are reporting ROIs three times higher and increasing profits by 25% to 95%. With data-driven insights, you can promote additional channels, products, and services that your customers are most likely to be interested in. The subscription model helps you learn when, how, and where your customers like to shop, and then tailor the experience accordingly with targeted offers and other content. For example, you might have customers visiting your website to research products before visiting bricks-and-mortar stores. Some prefer to discover new products on mobile devices but shop on the desktop. Other digital channels, such as social media, email, and text message, also play a vital role in the customer journey.
Moving beyond personalization
Personalization has proven to be an enormously powerful marketing tool, but it is not enough by itself. Companies also need to provide additional engagement channels to accommodate the widest possible variety of customers. The more touchpoints and channels a customer has at their disposal, the more valuable that customer becomes to your brand. For example, major beauty retailer Sephora found that customers who visited their website within 24 hours of going to a high-street store were three times more likely to make a purchase. Moreover, order values were 13% higher than those of other customers.
In short, everyone wins through subscription services that span multiple engagement channels and incorporate personalized offers and content. Customers get the individual experiences and companies the get the coveted long-lived customers.
To learn more, please contact us here.