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Today’s successful e-comm professionals have cracked the subscription-based e-comm code to build an international roster of loyal customers.
Done right, this business model goes from being a sales strategy to a service people anticipate and appreciate. Or, more succinctly, it maximizes Customer Lifetime Value (CLV) by turning a one-time transaction into repeated ones. With customer acquisition costs 5–10 times higher than selling to loyal customers, and loyal customers often spending 67% more on their purchases than one-time shoppers, entrenching loyalty is gold.
There are, however, some drawbacks to this model that can erode margins. Things like the cost of digital marketing activities that reach and convert your target audiences, product packaging and shipping costs that can amount to 20% of your gross profit, returns management, website hosting, specialized e-commerce software with payment gateways, app subscriptions, and TLS certificates (formerly SSL).
By building a solid base of loyal customers through content, social media, SEO, email marketing, and personalization, you can offset the above for some serious growth.
The Benefits of a Subscription-Based Model Done Right
Subscription-based models create predictable revenue. Compared to single sales transactions that fluctuate month to month and make forecasting and budgeting a nightmare, subscriptions yield consistent, predictable earnings.
You can also build strong relationships with your customers this way, depending on your subscription type, which aids in retention and loyalty by extension. These successes make investing in the marketing campaigns you want to pursue to improve reach and conversions less stressful, and the option to refresh and refine your operations to stay relevant, more doable, enabling further growth.
Adobe is a good example of a successful subscription model. Adobe Creative Suite switched from a one-time software purchase model to a Creative Cloud (CC) subscription. This meant customers no longer needed to update their tools as new rollouts were announced. Instead, customers receive continual updates, cloud storage, access to mobile apps, and integration with generative AI (Firefly) through monthly payments. The outcome? Customers now benefit from a convenient, seamless experience, while Adobe has strengthened its acquisition rates and customer loyalty while increasing profits.
Subscriptions are soaring in popularity because they align with the way most people live these days, juggling tennis balls and a few chainsaws all at once and yearning for a little relief. By providing convenience, flexibility, and control over cancellations, brands like Home Chef, Butcher Box, and Fabletics are giving people what they want instead of making them chase the prize.
Building Customer Loyalty in E-Comm
According to ZUORA’s Subscription Economy Index, subscription-based companies grew 3.7x faster than companies in the S&P 500 between 2012 and 2023. Their recent report says churn rates (percentage of lost subscribers) have remained consistent since 2018. It also says that subscriber rates have grown since 2021, so we can conclude this jump in popularity was not solely due to the pandemic and the lockdown policy that bolstered e-comm (especially among Baby Boomers).
Choosing the Right Subscription Type
When you’re planning your subscription-based model, your three goals are customer acquisition, retention/loyalty, and expansion. This begins with choosing the right subscription type for your business.
There are more than a dozen variations on the subscription theme, so we’re focusing on the five most common formats to spare your sanity.
These include:
Replenishment Subscriptions (Consumables)
The replenishment model offers convenience and cost savings. It’s designed for recurring deliveries of essential, regularly consumed products like coffee, razors, pet food, vitamins, and supplements (often at a discount) so that brands become embedded in their customers’ daily routines. Customers pay monthly or quarterly, and don’t need to worry about running out of coffee, wine, and other valued items. Predictable delivery + cost savings = loyalty.
Curation-Based Subscriptions (Discovery)
Built on discovery and personalization, this model delivers a collection of products tailored to customer preferences. This is the model FabFitFun, BoxyCharm, and HelloFresh use.
Curation is most common in beauty, fashion, and food, where customers pay for a box of surprises. Because they've filled out a form indicating what they like and use, they’re rarely disappointed when their box arrives. When executed strategically and thoughtfully, this format creates a powerful emotional attachment, like the way you feel on your birthday, at Christmas, and other personalized gift-forward occasions.
Access-Based Subscriptions
These subscriptions monetize exclusivity, perks that go beyond the products themselves. Priority access, member-only VIP programs, early releases, and special discounts awarded to select members fuel this subscription type. It’s more of a psychological strategy, as it provides a sense of belonging.
Access-based subscriptions are most effective for companies with a wide range of products and premium offerings—such as Lululemon and Fabletics. The higher the perceived value of member benefits, the more crucial the subscription feels for the customer. Cancellation feels like a downgrade
Software-as-a-Service (SaaS Subscriptions)
SaaS subscriptions offer access rather than ownership. Users pay for a platform's continuous availability so they can use its features, receive updates, and not worry about maintenance, upgrade costs, or an enormous initial investment. The model offers cost-effective access and flexibility for users and steady, recurring revenue for the SaaS business. Salesforce, HubSpot, Shopify, Mailchimp, and Zapier are all SaaS subscriptions.
Hybrid Subscription Models
Hybrid models combine practical elements of other subscriptions to reduce subscription fatigue. Hybrid models might combine curated product boxes with replenishment and one-time, on-demand purchase options to lean into the flexibility bonus. The idea is to give customers more control for reduced cancellation rates.
Your Insider, Member-Only, Premium Guide to Marketing Your E-Comm Business
Marketing your subscription-based e-comm business and building customer loyalty takes commitment. Loyalty grows when your subscribers feel understood, valued, and in control of their experience. Here’s how to do that.
Create an Omnichannel Content Strategy
Develop blog posts that inform and engage target audiences. Focus on messaging that addresses pain points and reflects their interests. Incorporate appropriate, value-based keywords to optimize search engine rankings and AI mentions and use real-life examples to illustrate value and credibility.
Create educational posts for top-of-funnel audiences (problem-solving how-to guides, industry trends).
Create comparison articles for middle-of-funnel audiences (“Best Of” lists to highlight why yours is the right solution).
Reinforce retention and loyalty among bottom-of-funnel audiences with post-conversion content (e.g., how to maximize your subscription, member-only updates).
Produce compelling video content that highlights the unique aspects of your subscription-based offer and demonstrates how your product resolves pain points and problems. Use direct yet compelling keyword-optimized titles to rank and to maximize clicks. More than 80% of audiences say they’ve made a purchase after watching a short-form clip.
Create clear CTAs.
Create Community and Engagement Through Social Media
Offer exclusive value with social-only discounts and access to new features. Use the 4 U’s (urgency, unique, useful, ultra-specific) to guide your headlines and your content.
Foster engagement, reach, and trust through user-generated content (UGC) and live content (UGC boosts conversion rates by 102%).
Use polls and other interactive content to boost engagement and gather audience insights, and follow up with posts that address results to reinforce a sense of community.
Share How-Tos and tutorials.
Pursue influencer partnerships that fit your budget and your niche.
Monitor your accounts and respond to all comments and inquiries quickly and thoughtfully.
Ensure your visuals are high-quality and compelling.
Use platform ad tools targeting your ideal customer.
Prioritize channels where your target audience lives.
Create clear CTAs.
SEO and GEO in Subscription-Based E-Comm
Optimize your Google Business Profile (GBP) and ensure it stays accurate and updated across all channels. (Use this to showcase reviews as well, leveraging social proof).
Create FAQ sections to answer specific questions and long-tail queries about your offer.
Regularly publish testimonials and case studies with new and relevant information that Google’s crawlers prioritize .
Optimize your site’s load speed. Even a 2-second delay can cost you 87% of potential customers.
Ensure your landing page is user-friendly.
Make the most of data gathering tools to monitor organic search performances, time on page, churn rate, and CLV.
Automated Email Marketing to Engage and Retain Customers
Begin with automated welcome emails (shown to deliver a 68%-80% open rate), that explain the setup process and quickly establish value.
Highlight key features of your service to reinforce value.
Send educational How-To content, insider tips, and other content that maximizes the subscription experience.
Initiate a “Win-Back” campaign for users who haven’t logged in for a while. Use messaging like “We Miss You” and include a special offer.
Ensure your emails are segmented based on behavior, interests, and subscription level. 72% of consumers only engage with tailored messaging.
Reinforce the value of exclusivity by offering rewards and perks that make members feel like they’re part of an elite club.
Reduce involuntary churn through proactive, easy-to-understand renewal and billing communication (include support options that show your customers you care and you want them to be happy).
Prioritize Personalization
Use customer data to (behavior, feedback, purchases, demographics) to tailor recommendations, content, and emails, making them feel seen and heard.
Customize shopping experiences based on preferences and purchase history (from all that data you’re collecting).
Provide subscribers-only access, early product releases, or members-only discounts to make them feel special.
Optimize every touchpoint across the customer journey to build an emotional connection.
Include customer-focused flexibility that allows them to pause, skip, or cancel easily. This helps build trust and reduce churn.
Ready to Maximize Your Subscription Revenues?
The average consumer spends approximately $133 a month on subscriptions, according to Subscription Service Statistics and Costs. Other studies reveal eight in ten adults use subscription services for their streamlined process and convenience. When you build customer loyalty with ongoing engagement, you’re creating reliable, predictable revenue. Both sides benefit.
Our team at GoEpps specializes in goal-oriented digital marketing plans and strategies built to perform. Partner with us to get your subscription-based e-commerce business on track for the growth and revenue you want to see this year. Book a consultation today.
