Money on the Table: Lessons Learned From the Leading Subscription Retailers

Money on the Table: Lessons Learned From the Leading Subscription Retailers

By Ryan Brelje, Content Marketing Manager at Iterable

More than 10,000 ambitious companies fiercely compete inside the expanding subscription retail space—with the industry more than validated by the successes of pioneers like Birchbox and Dollar Shave Club, brick and mortar mega stores like Sephora and Walmart have entered the arena and vie for rival market share. In a high-stakes game where customer churn is only one click away, how are these companies keeping their customers engaged while they await their deliveries?

To find out, we observed the top 100 U.S. subscription retailers, studying their email and mobile messaging strategies over three weeks. We’ve shared our findings in our latest User Engagement Top 100 Report to show you just how subscription companies engage with new customers.

We looked at three influential categories from each retailer’s campaign-specific marketing experiences: the welcome series, promotional blasts and re-engagement series, highlighting the crucial email characteristics driving engagement and identifying areas for improving your own campaigns.

Welcome Campaigns

  • 68 percent of the retailers observed sent one or more welcome emails to new subscribers. Furthermore, only 19 percent committed to a welcome series of introductory emails.

First impressions validate customer feelings post-transaction and many companies are failing to capitalize on this opportunity. If your first welcome email is a bare-bones, plain-text delivery  addressed  to [First_Name], is this really the “personalized experience” you want to share with new customers? Welcome emails are the primary tangible touchpoint that a new user has with your brand; use this high open rate opportunity to start fostering your desired brand experience.

The most effective emails were the ones which felt in-step with the digital brand experiences we had become accustomed to—inclusive of vivid imagery, personable messaging, and reminiscent of their websites and social media.

Successful welcome series help subscribers to better understand service offerings and align expectations as new customers (e.g. delivery schedule, FAQs, onboarding, etc.) At this honeymoon stage of peak engagement, the savviest marketers are getting a jump start on not only grooming their next wave of evangelists, but also artfully influencing their expected lifetime values.

Takeaways for Warmer Welcomes

  • Create a multi-touch welcome series — Even if you don’t get past this tip, you will have made an impact.
  • Personalize the outreach — And that means going beyond, “Hi [First_Name]” Use real-time behavioral data to customize campaigns.
  • A/B test early and often — Experiment with subject lines, CTAs and creative.
  • Get sophisticated with segmentation — Target by age, gender, location and more.
  • Respond to engagement in real-time — Then iterate on your results. Don’t waste hours or days waiting for legacy technology to update.

Blast Campaigns

  • 76 percent of the retailers sent blast emails during our study. On average, the number of blast emails sent to active subscribers was 3.8 per week.

With a goal to keep your brand top of mind, mass communication is critical; however, inbox presence is a privilege and must be consistently earned with every send. Blasts are a cornerstone of any campaign, but companies are far from having mastered this art. At nearly four touches per week, interesting, engaging and most importantly, useful content is a must. Finding the delicate balance between consistently promoting your content while still remaining sensitive to your customer’s POV is the key to keeping your emails free of flags.

Blast campaigns are a fantastic opportunity to reinforce a customer’s lingering affection toward your brand following a delivery. Nearly all retailers have thought about how their unboxing experiences will be received by new customers, and great marketers are replicating similar experiences via email. While content remains king, personalization plus elegant design grows engagement—serving up content which strikes the right tone with the right audiences will pique interests and boost performance metrics.

Takeaways for Better Blasts

  • Break the mold — “Humanize” content by appealing to the unique and even quirky characteristics of your brand.
  • Demonstrate scarcity — Offer limited-time discounts or flash sales to create a sense of urgency.
  • Appeal to novelty — Recommend new products to customers with previously demonstrated interest.
  • Showcase social proof — Build credibility by spotlighting positive reviews and video testimonials.
  • Treat your VIPs — Target the most engaged customers with exclusive promotions and referral rewards.

Re-Engagement Campaigns

  • As few as 13 of all 100 companies sent re-engagement messages. Similarly (but not immediately related), only 24 percent of companies asked for feedback at any point during the study.

Re-engagement campaigns can be an incredibly useful “olive branch” when rekindling customer activation. Figures indicate that acquiring a new customer can cost on average five to 25 times more than retaining an existing one, and yet many retailers are simply accepting churn as-is. There’s significant opportunity to show off a highly personalized campaign using the very specific data you’ve been accumulating during the customer journey; put that data to work and at least try to win them back. If you’re brushing aside these campaigns, you’re not just leaving money on the table, you’re holding the door while it walks out.

Re-engagement campaigns can come in a variety of flavors and the most effective ones leverage several different tactics to engage their customers. Soliciting feedback in non-invasive ways can come off as thoughtful and emote empathy when done correctly. Consider appealing to your customer’s values, both sentimental and financial, and lean on personalized messaging with enticing coupons.

Takeaways to Win Customers Back

  • Do something before it’s too late — Check in with customers regularly to reduce churn.
  • Align incentives with your brand values — Be as forceful with discounts and free goods as your business allows.
  • Don’t stop tracking — Are lapsed customers continuing to browse your site? Reach out to gauge their interest.
  • Prepare past the honeymoon period — Anticipate a decline in engagement to stop inactivity before it starts.
  • Segment smarter — Filter inactive users from campaigns to better determine the metrics of your regulars.

There are plenty of opportunities to enhance marketing efforts across your customers’ lifecycles. Our evaluation of the top 100 subscription retailers made it clear that while a few are successfully innovating, many still struggle with basic email engagement principles. Many of the suggestions we share might seem obvious, our studies indicate that too many companies are still lagging behind.

In a time where it is imperative for businesses to move faster than the speed of their customers, marketing agility is a must. Don’t let outdated strategies or legacy martech stacks keep you from missing out on important moments of dynamic customer engagement. Whether you’re iterating on the fly or rethinking your entire strategy, take heed of what others are (or aren’t) doing and start strengthening your relationships.