I’m so grateful to the thousands of people who’ve played a part in getting us here. In 2014, I started Recharge with two friends in a Santa Monica apartment with the goal of helping ecommerce merchants scale and grow their businesses through subscriptions. Since then, we’ve powered subscriptions for more than 20,000 brands, processed over $20 billion in transactions, grown to a team of more than 400, launched new products, and so much more. With all that growth and change, I’m proud to say that our original mission remains intact: we still are and always will be a merchant-first company.

While we are excited about the milestones achieved, it feels like we’re still just getting started. I’m as driven and energized as I was 9 years ago in that Santa Monica apartment, and can’t wait to continue to build new retention and growth solutions for our brands and their customers. So, to all of you who have been on this journey so far: thank you again, and let’s keep this momentum going.

The post Recharge reaches 100 million subscribers for Recharge-powered brands, tops $100 million in ARR appeared first on Recharge.

Shopify remains a trusted partner of Recharge, and we applaud them for adding subscriptions—a rising tide will raise all boats. Shopify adding this solution will educate the ecosystem on the importance of subscriptions and recurring revenue. 

Since we launched subscriptions in 2014, we’ve taken a simple function and spun it into a powerful suite of tools for 20,000 leading merchants. Our robust, best-in-class platform maximizes LTV with solutions that are both turnkey and wildly flexible to meet the needs of every merchant. And we have a host of new solutions in the pipeline that we’re excited to share soon.

Bravo to our friends at Shopify—welcome to the subscriptions space! Let’s keep doing what we all do best: Helping companies reach their full potential.

-Oisin 

The post Shopify joins the subscription market appeared first on Recharge.

For nearly a decade, Recharge has helped thousands of merchants turn one-time shoppers into loyal, repeat customers. Through Recharge subscriptions, we’ve enabled merchants to process more than $10B in revenue, but this is just the beginning. 

Today at ChargeX, our annual merchant and partner conference, I unveiled the next step in Recharge’s journey: our move to a multiproduct platform that further empowers our merchants to grow and foster a loyal customer base. 

We’ve always known that subscriptions were just one way merchants could build valuable, long-term customer relationships. With compounding acquisition challenges, merchants today are shifting their focus to building strong retention programs like never before, and we’re here to help. 

Our goal: to help our merchants maximize the value of their customers through a unified suite of scalable, integrated, and highly customizable products.

Over the next few months, subscriptions will be bolstered by a number of new products: 

Bundles

Launched as a part of Recharge in 2022, Bundles helps merchants increase average order value (AOV) and lifetime value (LTV) with curated or customizable product bundles. Soon, we’ll give merchants the ability to offer dynamically priced bundles, adding even more flexibility to our Bundles solution. 

Loyalty

Incentivize repeat purchases and retention with exclusive rewards and benefits.

Flows

Easily deploy custom workflows that decrease churn and increase customer AOV and LTV throughout the shopper journey in a single platform.

These new offerings will come with out-of-box functionality—making it simple for merchants to get started right away—while also offering robust customization options with the Recharge API and SDKs. Regardless of how or where you want to build your program, we’ll be here at every step of the journey.  

We’re passionate about this next multiproduct phase of Recharge, and are committed to accelerating enhancements to our existing subscription offering and supporting the evolving needs of our merchants and their customers. 

Affinity customer portal

One of several subscription enhancements we revealed at ChargeX today was the launch of our next generation customer portal, Affinity. Affinity gives merchants a highly customizable, no-code customer portal while providing shoppers with a modern and user-friendly interface to effortlessly manage their subscriptions from any device. 

This updated subscriber experience was highly requested from merchants, and we’re committed to launching additional features and enhancements in the months to come. 

The Recharge product roadmap

Our team is working on a lot of exciting projects at Recharge thanks to the feedback and trust of our merchants and partners. 

To help everyone stay up-to-date on these product updates, we’re also excited to launch the Recharge product roadmap, a place to submit ideas, see what we’re working on, and get involved in the product development process. Bookmark this page and join us on this next chapter for Recharge.

We’re looking forward to sharing more soon. 

–Oisin O’Connor, CEO & Co-Founder

The post From subscriptions to a unified suite of tools: Recharge’s vision   appeared first on Recharge.

Over the past few quarters, we’ve seen macro headwinds, weaker trends in our industry, and slower consumer spend. We are taking a more focused approach with our resources to give us an even longer and more sustainable runway to build great solutions for our merchants.

The human cost of this is not lost on me or on anyone on the leadership team at Recharge. I am grateful for the talent and the passion of every Recharge team member, all of whom have contributed to our strength and growth. Having to say farewell to 84 of them is painful and humbling. Every team member, departing and current, has helped build Recharge to what it is today, and taking care of our people is always our priority. We will work closely with our departing team members to support them through this time with severance, extended benefits coverage, and job transition coaching resources and services. 

You’ll hear more from us soon about where we’re headed. We’ve always been relentlessly customer focused, and our product roadmap includes powerful solutions for merchants to adapt and succeed in these times. 

But today we want to express appreciation and support for our departing teammates. Thank you for what you’ve brought to our culture, our product, and to businesses everywhere.

-Oisin

The post A message from Oisin appeared first on Recharge.

Rebundle, now rebranded as Bundles, allows merchants to combine multiple SKUs into a single product, which gives them the ability to add value through curated product experiences, helping boost average order value (AOV) and saving their customers effort in the process. With the acquisition, Bundles is now fully integrated into the Recharge platform, enabling both pre-set and customizable bundles that give subscribers the ability to update the items after checkout via the customer portal. 

Customizable bundling allows subscribers to personalize each order, picking and choosing the items they love for their next shipment, at a fixed price. Curated bundling offers merchants an easy and intuitive way to design custom product packages and deliver the products they know their customers will love, such as bestsellers, starter kits, and limited edition boxes. The ultimate impact: boosted AOV, customer retention, loyalty, and lifetime value (LTV). 

“Bundles saved us a lot of work and helped us avoid customer confusion by making our subscription box more user-friendly.”

Roz Campbell, Founder, Tsuno

Bundles is yet another tool that we now offer to empower our merchants through recurring commerce.

A big thank you to Rebundle co-founders Paola Ramirez Gutierrez and Adolfo Builes for building a product that solves real merchant problems while adding value to each purchase and customer relationship. We’re thrilled to have you here!

—Oisin O’Connor, Co-Founder and CEO

Bundles is available to Recharge merchants on the Pro & Enterprise plans that use the Shopify platform. To learn more about Bundles and how to launch product bundles for your store, visit our website.

The post Introducing Bundles, Recharge’s fully integrated bundling solution appeared first on Recharge.

What’s the key to building a successful subscription business? It’s probably the biggest question on your mind if you’re starting one of your own — or even if you’ve been running one for some time. In our effort to help new subscription business owners — and all those who may be struggling to grow — we’ve started a new initiative. In the next few months, we’ll be interviewing some of the top subscription business owners we work with about how they’ve gotten where they are now, and what advice they may have for others.
To kick off this series, we sat down with Rob Hoxie, Co-Founder of Tiege Hanley — a men’s skincare subscription company that has seen incredible growth in a short amount of time. Since their ecommerce store went live in mid-2016, Tiege Hanley has gathered tens of thousands of subscribers, and they continue to grow steadily. How’d they do it? That’s what we asked Rob about.
Q: We’ve heard you have an interesting story about how your company got started. The original idea actually didn’t do so well — until you refined it?
Rob Hoxie: That’s true. I had a friend all through high school and college named Kelley Thornton — and after college, I pursued a career in the software industry and Kelley went into the world of consumer package goods (CPGs). We kept in touch, and after the software company I’d be working with for 20 years sold, Kelley reached out to see if I wanted to start a company with him. He was seeing a huge surge in the sales of men’s products, especially personal care and skincare — and he wanted to take advantage of that trend. After doing some research in that category, we decided to create a curated box of men’s skincare products that could be ordered online. We thought it would be a huge success, because of the growing demand in this product category — and because we knew men weren’t very interested in going out and shopping for skincare products in person.
However, it didn’t end up being as much of a hit as we thought it was going to be, partly because we were just putting together a box of our favorite products. And men could buy them on Amazon or other online retailers. We knew we weren’t doing something right and needed to adjust the business plan.
That’s when we ran into Aaron Marino, who had a successful YouTube channel called Alpha M. — where he’d built up a following of more than 750,000 subscribers by teaching men how to improve their grooming, wardrobe, fitness, and lifestyle. So we reached out to him to see if he would be interested in helping promote Tiege Hanley. He agreed, but right before signing on the dotted line, he also gave us some honest feedback. He loved the category and the idea behind what we were trying to do, but he thought we were doing it wrong. We needed to have our own brand, and we needed to create a subscription — because skincare products are something people will always need more of. We knew he was onto something, so instead of just having Aaron promote Tiege Hanley, we asked him if he wanted to become a partner and help us build this type company. That’s when Tiege Hanley as we know it today was born.
Q: What do you think is the key to creating a successful subscription business?
Rob Hoxie: The subscription business really is great. It really is what people crack it up to be. But, of course, that only comes with having the right product and the right target in mind. I think we really picked the right type of product at the right time with men’s skincare. It’s considered one of the last bastions in the beauty world. Plus, it’s perfect for subscriptions. People will continually run out of face wash, face scrub, and moisturizer. Our strategy centered around the idea that if we’ve created a superior product, which I think we really have, they’ll keep coming back. In the end, I would say you really need to consider whether there’s a need for what you’re selling, and whether it’s a one-time need or a constant one.
Q: Ok, so once you’ve got the right product and the right target, what else?
Rob Hoxie: Simplicity. Coming from a tech background, I’ve always been a fan of Apple and their simplicity model. That’s reflected in the fact that we have just three choices for subscriptions at Tiege. We try to avoid complexity, and I think that’s one of the things that’s helped us be successful. More choices isn’t always better for the customer experience — or for conversions.
Our next focus was retention. It’s easy to get caught up in focusing on sales and trying to get more subscribers, but in retrospect, the time and energy and thought that goes into keeping subscribers is just as important — if not more. You can learn it the hard way, or you can plan for it from the start: how are you going to keep your customers happy and engaged?
Q: How do you keep your customers happy and engaged?
Rob Hoxie: One of the major things that helped us launch successfully and build a loyal community of not just subscribers, but what I’d even call “fans,” is something Aaron actually came up with. When Aaron, Kelley, and I had inked our partnership, we were starting at ground zero. All we had was a signed contract — and an entire business to build. That’s when Aaron came up with the idea to video blog about the process of creating this company.
He wanted to create a YouTube channel where we would document this whole journey for everyone to see. Kelley and I were skeptical at first, but it turned out to be a brilliant idea. After 35 video blog posts, when we finally launched the site, we had something like 5,000 followers ready to become subscribers — and they were engaged followers, too — because we hadn’t just been telling them about what we were doing, but also asking for feedback along the way. We really included our audience in the process, asking them to help pick packaging designs, suggest tagline ideas, and give their opinions on everything we did. It made people feel like they were a part of something — as opposed to just buying a tube of moisturizer from a big consumer product company. Forming that kind of community from the start is an amazing thing if you can pull it off.
Q: What about after launch? Have you kept listening to customer feedback since then?
Rob Hoxie: Of course. We had built up this great community that was already used to letting us know what they thought, so we encouraged that. We got tons of emails right after we launched — many of which we printed out and still have hanging on a wall in our office. A lot of what people said was incredibly positive, but there were also suggestions for improvement in there. For example, we had tried to make sure that the size of all of our products was just enough to last the average user an entire month — but we heard that a couple of the products were maybe just a little too small and subsequently increased the size in our next production order.
Q: Beyond just listening to customers and taking their suggestions to heart, is there anything else you think is important for retention?
Rob Hoxie: You can’t slack off when it comes to customers who pause their subscriptions. We’ve made it relatively easy for our customers to pause using the Recharge customer portal. However, we then have to make sure that we’re always encouraging those customers to resume their subscriptions. We send out emails reminding people to come back, because their skin matters.
Q: Have you encountered any challenges being in the consumer packaged goods market, where there’s a lot of competition from big names?
Rob Hoxie: Sure, there’s a lot of competition out there from traditional skincare companies, but we’ve been successful by being different from the big guys. We’re a small company that has great products and does things a bit differently. We grew up on social media. We were pretty much created on top of a YouTube channel. We reach people differently than a traditional company, and our customers like that. It’s helped us carve out a very successful niche for ourselves.
That would be my recommendation to others: think about how you can be different from the big names in your industry by engaging with your customers in a more personal way.
Q: How big of a role has technology played in your success?
Rob Hoxie: Having the right technology partners is something that I think is incredibly important for the success any online business. It’s easier said than done when you’re a startup, though. Sometimes you choose who you choose, because you don’t have a ton of funds in the beginning. We actually started out on WooCommerce and WordPress, and we muddled through for a while and outsourced tech support when we needed to. Once we had thousands of subscribers, we realized we needed a company behind us that could provide professional, 24/7 support and a lot more stability. We switched to Shopify and Recharge in mid-2017 and that’s really made us feel a lot more confident in our ability to scale.
Q: You mentioned how great the subscription business model is earlier. For our last question, tell us why you think so.
Rob Hoxie: The great thing about a subscription businesses is that you don’t have to rely on one-time purchases. As a business owner, you can plan better and see into the future more accurately — compared to a more traditional model where you hope customers come back and buy again from you. With a subscription, you’ve sold what is hopefully a great product, and it’s easy to continue doing business together.

The post How to build a successful subscription business: An interview with Rob Hoxie, Co-Founder of Tiege Hanley appeared first on Recharge.

Recharge announced this week that it is among the first companies to be included in the Shopify Plus Technology Partner Program.
“We’re pleased to be among the select partners announced this week,” said Oisin O’Connor, Co-Founder of Recharge. “Recharge has been an integral part of the growing subscription economy on Shopify Plus, and it’s an honor to be recognized as one of the leading technology partners in the Shopify ecosystem.”
The news comes on the heels of Shopify’s announcement of their Technology Partner Program at IRCE 2017 in Chicago. “We are thrilled to welcome Recharge to the Shopify Plus Technology Partner Program. This announcement recognizes the best-in-class solutions that, together with Shopify Plus, further enables the rapid growth and innovation possibilities of today’s modern merchant,” said Jamie Sutton, Head of Technology Partnerships, Shopify Plus.
Recharge continues to grow their subscription platform this week with the release of the Recharge API. The new feature, already launched with over twenty Shopify Plus clients and integration partners, will help merchants and partners build, scale and customize how customers purchase and manage subscriptions. At the same time, app developers and partners will have the flexibility to create unique purchase workflows, customized customer portals, automated marketing and robust analytics as well as connect to third party apps like Klaviyo and Smile.io.
Current Shopify Plus stores using the Recharge API include Hubble Contacts, Pusheen Box, Ritual, Grunt Style and many more. “As a fast-growing company we need to pull specific data to help forecast our inventory,” says Paul Rodgers, CTO of Hubble Contacts. “It’s been great to be able to use the Recharge API to create custom reporting and analytics in real-time to help our business continue to grow.”

The post Recharge joins Shopify Plus Technology Partner Program appeared first on Recharge.

That should come as no surprise to subscription ecommerce businesses, who make the majority of their revenue selling to their subscribers and reducing their amount of customer churn (when customers stop using a business’s products or services over a certain period of time). 

How you combat churn—also known as your retention strategy—is key to ensuring you have a healthy subscription business. Especially considering that according to Gartner, 80% of your future revenue is likely to come from 20% of your current customers.

Despite knowing the importance of reducing customer churn, many subscription businesses struggle to hold onto their subscribers. For one reason or another, existing customers decide to leave your subscription program and stop buying from you.

In this post, we’re going to delve into the reasons why people cancel their subscriptions and what you can do to reduce this customer churn rate.

Why is customer churn rate important?

Here are a few reasons why it’s important to keep your customers from canceling their subscriptions:

Subscription businesses are based on retention, not conversion 

Subscription businesses survive because customers stick with you for a long time. Businesses with a very high customer churn rate are best visualized as a leaky bucket. If the total number of customers you’re adding to your subscription program (imagine you’re adding water to a bucket) is less than the number of customers lost from your subscription program, you’re in trouble. Your bucket has too many holes in it and you’ll soon be out of water.

Low customer churn allows you to pay off your customer acquisition costs, meaning that, over time, each customer becomes more and more profitable. 

Some businesses may not make a profit until after a new customer’s first few subscription orders. So, what happens if those brands have high customer churn rates? Very simple —they won’t be profitable and will be bleeding their business dry. 

That’s why your main focus should be on increasing your customer retention rate, not on converting as many customers as possible. Customer attrition should be more of a focus as opposed to customer acquisition.

Subscription companies are always selling & customers can cancel at any time 

Each month, your customer has the option of deciding to spend their money somewhere else.

Don’t assume that they’ll just stick with you. You need to be proactive and remind your customers of the value you’re offering.

This means that, if you want to keep your customer, you should focus on delivering an exceptional customer service experience alongside your great products or services.

By reducing your churn rate, you increase your average customer lifetime value 

It’s a pretty straightforward equation. The longer a customer stays with you the more money your business will end up making.

If your average customer stays with you for six months, and you increase that by one month, you’ll increase your revenue by 16%.

That’s why you should try your best to reduce customer churn and increase customer retention as much as possible.

Why do loyal customers cancel subscriptions?

Listed below are all of the main reasons why customers cancel their subscriptions. For brands looking to hone in on their customer retention strategies, it’s crucial to first understand why customers might be cancelling. This way, you know what to focus on when it comes to retaining customers and building customer loyalty. 

1. Too much focus on acquisition 

Getting new customers is important for your growth, but keeping them is far more important.

Many streaming services, for example, offer discounts to new customers for the first couple of months but neglect to provide any incentivizing deals for their loyal subscribers. We all know someone who’s hopped around to every gym and fitness class in the city to take advantage of their free or discounted rates for new members. 

The best subscription programs make sure they don’t lose sight of the big picture by focusing solely on bringing more customers into the business. If you neglect to take care of your long-term subscribers, your customer loyalty will suffer and your churn will go up.

Don’t make the same mistake. Reward your most loyal customers with impactful deals and meet customer expectations by providing an excellent experience throughout their customer lifetime.

2. You don’t deliver the same value anymore 

The primary reason a customer first bought from you is likely because you were offering something valuable to them.

They decided to become a subscriber because they wanted to fulfill this product need each month, and your recurring service seemed like the best option.

What do you think will happen if you start sending lower-quality products or restricting their options on order delivery?

Customers will start looking for different options. Depending on your vertical, there are likely several competitors offering similar products and services, so always be sure to keep your quality up so that repeat customers keep coming back for more. 

3. No options to change or edit their subscription 

The needs of your customers might change over time. The best companies grow with their customers and meet them where they are. 

Subscribers want flexibility over their subscriptions. They want customizable options to meet their needs for what’s best for their life. Having a flexible customer portal that gives customers options around products, delivery schedules, and how they pay are now the norm. Rigid subscription plans with limited options around skips/swaps or changing the cadence of deliveries are prone to raising churn rates and decreasing the customer retention rate.

One of the most common reasons for customer churn is subscribers having too much product. If customers don’t have the option or aren’t aware of the ability to skip a shipment, change their schedule, or try a new product, they’re likely to cancel their subscription. To retain customers, make their subscription as flexible as possible. 

4. You increased your prices 

Increasing your prices might cause a lot of customers to cancel, especially if your main competitive advantage is your low pricing.

Paying more for the same thing makes people feel like they’re being ripped off. So, avoid increasing pricing for your current customers.

Of course, sometimes you will have to do it to survive in business.

In this case, be sure to back this increase in pricing up with an increase in value for whatever you’re offering to your customers.

Explain to them how the product quality or service will improve. Align your pricing with a social cause, such as a percentage of each sale being donated to a charity cause that aligns with your brand. Listen to customer feedback to understand where your pricing sweet spot is. 

5. Customers don’t use your products 

Buying a product is not the same as using it.

Sometimes, you might have customers that initially decided to subscribe to your service, but never ended up using your product.

That’s why it’s extremely important to engage with your customers regularly and teach them how to use your products.

Be sure to collect customer feedback to figure out whether or not they are happy with the quality of your product or service, and how they are using what you sell. This simple rule can save your business.

6. The customer is trying to cut down on costs 

Sometimes, our financial situation changes, and we need to spend less money or we simply want to spend it elsewhere. Sometimes, there is nothing you can do when this happens, but in other situations, you can improve your chances of holding onto the customer.

If you are one of the first things that your customer has decided to cut down on, that means that your product or service is not a high priority for them.

Be sure to regularly remind your customers of your value proposition and why your products are so convenient to receive on subscription. This will keep your products valuable in the eyes of your customers and increase your chances of avoiding being canceled if money gets tight for your subscribers.

7. The customer found a cheaper competitor 

Of course, there will always be someone who can sell even cheaper than you, even if that competitor isn’t making any profit from their sales.

This might be a reason for customer churn, especially if your competitive advantage is low pricing.

That’s why you should always focus on having other advantages, as well — like exceptional customer service, high-quality products, and an engaged brand community. These advantages all combine to build up your brand loyalty, which in turn deters customers from ever wanting to switch to a competitor.

8. The customer found a competitor offering better services or products

 There might be someone who outsmarts you with higher-quality products. Remember that a higher-quality product does not mean that people will automatically switch to using them.

It’s all about positioning your brand and offering exactly what your customer needs.

If your competitors are offering additional features, but your customers don’t need them, why switch?

Remember what Mike Dubin, founder of Dollar Shave Club, said: “You don’t need a backscratcher and 10 blades.”

So, your competitor will only be able to successfully steal your customers if they offer them something better that that simultaneously fulfills their needs. Take some time to understand what your customer wants and what your competitors are doing so that you can achieve high levels of customer satisfaction.

9. You provide a bad customer experience 

Even if you have the best products in the world, you will turn a lot of customers off with bad customer service. When people have questions or problems, they want someone from your side to pick up the phone and help them ASAP.

If they have to hold the line for 30 minutes or wait days for an email back, you’ll make them feel very disappointed. And with time, this disappointment might lead them to decide to cancel.

Prevent cancellations & improve customer retention rate with these customer retention strategies

If you want to prevent more customers from canceling, you should utilize the following customer retention strategies. Not only will they help you increase customer loyalty, but they will also help you exceed customer expectations and keep repeat customers coming back for more for years to come.

1. Communicate regularly with your customers 

This will allow you to learn more about customer dissatisfaction, any needs that aren’t met, and the reasons why your customers might cancel their subscription.

The best and simplest way to do this is with your customer service program.

Every time a customer contacts you, that means that they have a problem that needs to be solved. So, make sure to record calls and save all chat and email messages.

Then, spend some time analyzing these issues and finding the most frequent reasons why people contact you.

Here are a few other ways to get to know the needs of your customer a bit more proactively:

• You can create a post-purchase survey and send it to your subscribers
• You can contact your most loyal customers and survey them 
• Less direct but incredibly important, use analytics tools like Google Analytics or if you’re a Recharge merchant, utilize your Recharge Analytics dashboard

2. Always focus on improving your service

When you do this, the value that you offer to your customers grows over time. Plus, focusing on improving allows you to build even greater brand loyalty, which makes it even harder for your competitors to steal your customers.

There are several things that you should focus on improving in your subscription ecommerce business, such as:

• Quality of your products : When you’re reselling someone else’s products, this might be harder, but you can always be on the lookout for better suppliers or ingredients.
• Your product packages: Understand which products your customers tend to use together and offer them as a bundle at a better price. Also, consider the quantity of products that people buy, and create different offers based on the number of items people are buying.
• Customer service: Don’t make people wait for someone to pick up the phone. Train your staff to answer all questions as quickly as possible.
• Delivery: Make sure (if it’s within your logistical control) that you’re delivering your products on time and damage-free.

3. Make your subscription as flexible as possible 

Allow your customer to switch their plan at any time with ease. 

Make the whole experience as intuitive as possible so subscribers can simply go to your website and easily swap products, skip an order, or change their delivery schedule.

4. Teach your customers how to use your products 

If you’re selling skincare products, teach your customer how much of the product to use and how to apply it. If you’re selling coffee beans, teach customers how much they should grind for the perfect cup.

Providing supplemental information that is helpful (and flexes your delightful brand tone) will go a long way toward convincing subscribers to stick with your subscription service.

5. Frequently remind your users of the quality & benefits of your products 

As previously mentioned, in subscription businesses, you need to keep reminding customers of the reason they’re subscribing to your customers every order. And that reason is, your product is desirable, delightful, and betters their life. 

You need to remind your customers why they chose you in the first place.

Be sure to communicate regularly with your customers and inform them about your value proposition, how you can help them solve their needs, and why they should stick with you.

6. Share the same values as your audience 

A lot of the time, customers will choose you because you share the same values.

This may be related to their lifestyle, sustainability and saving the environment, or helping those in need. Be sure to let them know what your brand values as a company and engage with like-minded customers on your social media channels.

7. Handle bad publicity

No company is immune to bad publicity.

You might not be able to prevent bad PR, but you should always act accordingly when it comes up. Otherwise, you might lose a lot of customers. This happened with Netflix when they decided to increase their pricing and split up their streaming service and DVD-by-mail service.

So, here’s what to do when this happens:

• Admit your mistakes and make apologies
• Try your best to help all people who have been affected
• Explain why the mistake happened and what you learned from it
• Let people know how this crisis will allow you to serve customers better in the future

8. Always increase pricing with a value offer 

When you have to increase prices, make sure to communicate how this will result in the customer receiving a more valuable experience.

Explain how this will improve your service —they’ll receive upgraded products with extra features, premium customer support, or something else.

9. Always have someone to answer questions & help customers

Handling customer support might be tough, especially if you’re a small company and have a lot of questions coming in from customers.

If you can’t handle it yourself, you may want to consider outsourcing it. There are a number of companies that are well-trained and will learn and answer everything about your product.

Long story short: Make an effort to hold onto your existing customers

To build a successful subscription ecommerce business, you not only need to acquire new customers but retain your current ones.

Understanding the why behind customer churn is the first step in implementing effective customer retention strategies and increasing your customer retention rate.

The post Why people cancel subscriptions and how to reduce customer churn appeared first on Recharge.

Oisin– Hey guys this is Oisin from Recharge, and I am really excited to launch our new blog. Our first interview is with Joseph from Little Life Box. This is a really well established subscription box company that has hundreds of subscription customers. Today we are going to talk about how you can start a subscription company like Joseph and how you can scale it to success. So Joseph- can you give us a little backdrop of your situation and background?

Joseph– Sure! Well, my background has absolutely nothing to do with subscription boxes. I graduated in architecture, worked in that field for a little while, and even currently do some work in architecture as well as digital design. The subscription boxes were something I had heard of on the side, which has now become a relatively full time job. Success was not necessarily expected, but we have ended up doing very well, so it has turned out to be a full time gig for the time being.

Oisin– Wow, that’s amazing, that is the aspiring goal of every entrepreneur!

Joseph– Absolutely, Yeah there are never any guarantees when you are an entrepreneur, as you can try a lot of different things might not work out, but this one has stuck

Oisin– How did you come up with the idea of Little Life Box? Also, could you please give the readers an idea of the product that you provide?

Joseph– Yes. A little background- we send out samples every month of different healthy alternative products. There are a lot of boxes out there that are just snacks, or cosmetics, or just one specific type of product. Whereas we do a mix, so its really- I have two other partners that are in with me. One of them handles the product procurement, they basically do the research, and find whether its products that they try in person, or discover through different blogs or Pinterest. When they want to try the products, they contact the companies, to get them on board. Which is the toughest part, which I am sure we will talk about later! So, it could be anything, this past month we had everything from natural dishwasher detergent to cosmetics to chips to… anything we find that we think is a healthy alternative.
We came up with the idea by basically… well we are only located in Canada for the time being, and one of my partners who started out is one of the original founders, she heard something similar in the United States called “Conscious Box,” and she wanted to subscribe herself, but they didn’t ship to Canada. So we did our market research, and realized that there is actually a big demand in Canada, and looked into starting it up ourselves. I had a background in web design and worked in online processes before, so I was familiar with how to get it off the ground and start it up. And we just had to give it a try, and it was a hard first couple of months getting off the ground, and now we are we are now!

Oisin– That’s Awesome, I guess the biggest struggle that people have are the first ten sales that aren’t your friends or family. How did you get that initial traction –that first group of people who loved your product?

Joseph– What we did initially, and I am completely surprised this worked ourselves– as we didn’t know what to expect… that was the big challenge¬– we had no money, we didn’t want to invest too much, and we really believed in it. Which left us with the challenge of spreading the word. We started by not actually accepting any payments. We created our social media accounts, started following different health bloggers, getting the word out about the box, advertising- saying we were going to be starting off in three months. By doing so we were gauging the interest of potential customers. So we had it set up to say something like “hey if you’re interested, go to our website and sign up to join.” This was essentially a mailing list at the time, and we were saying “hey sign up now, and we will contact you whenever they are first up for sale, and we will let you know when you can buy your first box.” In a matter of two or three months we had about 50 people who said they wanted to sign up, and out of them, about 20 were friends. The others came from us posting on other peoples social media accounts, posting on bloggers accounts, on health food bloggers and different writers, and commenting on pictures and saying “hey you know you should check out Little Life Box,” and we got some traction that way. So we started off with about fifty for our first month.

Oisin– Oh Wow, well that’s a great way to do it you know, kind of testing the waters before actually putting any money in. A lean start up way, that’s great to hear. The other issue that people have, and you know we see this all the time, is that people come in and they have their initial base and they have a great idea, but they really don’t know how to grow it. What kind of tactics have worked out for you guys that have grown your base from the initial few people that you got from the blogs to what it is today?

Joseph– Well, for us it has really been a steady growth, and we haven’t tried to grow too fast, so we wanted to take the bumps along the way, and learn from the mistakes, and see how everything goes. You know we started off with 50, then we grew to just under a 100, then to over a 100 then to 200, and right now we are where we are today, just over 1500, and we tried so many different things, it is hard to say exactly what worked. We tried everything from attending trade shows to buying booths at marathons and advertising that way. What I think mattered a lot was customers or potential customers talking about us. So many people these days have blogs or are actively commenting on social media, and on other peoples blogs or sites, and when they find something they like, then they are going to want to talk about it and share it. That is actually the best way of spreading the word right now. Our members talking about it, and telling their friends about it. For every one person who is happy about the product they then go and tell six or seven friends, and then we grow that way. We haven’t actually put any money into advertising, which we probably could, but we are trying to manage the growth and not explode too quickly, and at the same time, we are not millionaires, so we are trying to manage the amount of money put into it. That’s worked for us, it has been a steady growth, and we can see that incremental growth each month. You know, we are convinced that the more people talk about it, then a health food blogger will talk about it, and then talk about it on their blog. They may have a couple of thousand followers, and that’s advertising right there.

Oisin– Great, you have a great product, and we see that constantly through reviews and everything, it makes total sense. Another question I have too is about your affiliate engagement. You have been really big on affiliates. You really seem to be able to engage people. What kind of tips do you have to provide to companies just starting out. How they can create affiliate programs and thereby making champions for their offerings?

Joseph– We discovered that people want to be affiliates, as they talk about these products anyways. Especially with subscription boxes, people are very passionate about it. It is a big thing- if you look on YouTube you can see people doing unboxing of subscription boxes, they love to talk about them, and love to share what they got this month. So if someone has a YouTube channel, and if they are doing unboxings anyways, it makes sense for them to sign up as an affiliate. That way, if someone signs up for the subscription box using the affiliates promo code, then they make a little bit of money off of it. The demand is there, and it is not a hard sell, and it is definitely a fantastic way to grow your business, because it encourages people to go on their blogs and YouTube’s and do a good job of going into detail about the product, and they get really excited about offering a promo code to their listeners. “Go get 20% off using our code.” It is definitely a great way to help the growth of the company, and Shopify actually offers a billing app that is great for referrals, so the tools are all there. We have a section on the site where people can sign up to be affiliates, and there they are given everything they need like their promo codes, then they they go from there.

Oisin– Makes total sense. So how do you identify different people who could become potential affiliates, and how do you do the initial outreach to build the relationship?

Joseph– Part of what focus on in our advertising strategy, is searching for bloggers, and looking for people who will talk about the box and review it. We want to get it into the hands of people who will enjoy it, and if do they like it or want to talk about it, plus they have a significant following. For them, we always offer them to be an affiliate, because it makes the most sense and we will get the most referrals. But really, we leave it open to anybody. Someone may sign up and think “well I may introduce this to ten of my friends and make a couple of bucks off this,” and they become an affiliate. It could be a blogger- it could be anybody, really. Ideally, you really want to partner with the people who have the most influence.

Oisin– For sure, how do you usually structure it with the affiliates? Do you do it one time? Lifetime? How many times? What is the lifetime value of the customer that you are going to acquire?

Joseph– The particular app that we use allows them to log into the shops backend where they can then track the amount of people who use their promo code, and it gives them the link that they can use. So, if someone uses the link and are redirected to our site, any purchase that the person makes counts as a referral, so it is actually really easy for them to use it and set up. It is pretty much work free on their end. They can post their review like they usually would, and then at the end say “hey if you are interested, here’s the promo code!” Then it tracks it automatically, and we send off the commissions

Oisin– So that’s a big Shopify app, and it helps grow your business?

Joseph– It has a very low cost, it is not a free app, but it is well worth the price.

Oisin– One issue that we see with a lot of box companies is their management of inventory and procurement. So every month you get people to sign up, and then you have to provide a box… how do you handle that? How do you handle the scaling and all that?

Joseph– Well that’s the hardest part, if it was that easy everyone would be doing this, right? Without giving away too much of how we do things and what’s made us successful, it is really about building relationships as far as identifying the products that you want. It is calling them up, making your pitch, building a relationship with that person, finding out who you need to talk to, explaining the benefits of taking part and gaining their trust. Once they do take part, they really do realize the advantage of it. A lot of people are skeptical at first, because not everybody knows how subscription boxes function, and how they can be really beneficial for your business in terms of marketing. Sometimes it is a tough sell, and sometimes it is hard to plan what’s in the box. What kind of products do we want in the box? Who can we call? Okay, we already contacted these people. But… that’s the hardest part, that’s what makes the business successful when you can go out and do that. In terms of managing inventory- it is not easy. Our packing weekends are hectic, when we are getting the boxes ready and the teams all here. The first couple of months were a transition period as we had to learn different ways of doing it, what works for us, or for you. Then you get your system down. It is a lot. We send out boxes once a month, and we also offer special gift boxes we can send out on demand, and we send out a couple of those on a daily basis, but it is mostly once a month. We ship on the first of the month, so it is the days leading up to that which are definitely the busiest part of the month.

Oisin– When you guys were just starting off- I know a lot of companies that come on with us, they limit the amount they are going to fulfill each month and then open up from there, do you do the same?

Joseph– Absolutely, absolutely, because nothing is done last minute! The products we line up for every month’s box are organized a few months ahead of time. So we know how much product we are working with, and how many boxes we can sell

Oisin– What kind of advice would you give for people entering this market? What are the top tips to become successful?

Joseph– That’s a good question, I think the top thing- especially when dealing with subscription boxes, is that people seem to expect things to be tailored to them personally, especially dependent on the product. From what I know about the subscription boxes out there, you find something that you are generally interested in, there’s Bark Box for people with dogs and you’re going to get dog treats and poo bags or whatever in the mail every month. They are things that are very specific, but at the same time you don’t exactly know what you are going to be getting in the mail every month, so there are always going to be people that are disappointed. So, the biggest piece of advice I would give people is to not get discouraged, because you are going to get negative feedback, you’re going to get people who are going to be saying things like “ oh my god this box is garbage, I couldn’t use anything inside of it, this was a waste of money, why did I sign up for this?” Then there will be people who absolutely love it, who are going to send you a huge letter thanking you saying things like “ oh I gave this to my niece and I’ve been using it for weeks and I bought more of this and that and so it is so open and subjective so naturally you’re going to get a lot of it, and it is easy to get discouraged at first, but it is the nature of subscription boxes. Unless you are the type of company offering something very specific that they know of ahead of time, which most aren’t, especially when it comes to anything food related, or cosmetic related, subscription boxes are usually a surprise what you get them every month, and in them are an assortment of a certain type of product. Of course you’re going to get negative feedback. So if I had to give one big piece of advice it would be to not get discouraged, and to not forget that you are doing a good job, and there are always going to be people who aren’t satisfied no matter what.

Oisin– I think that’s great feedback, we see that here across the board too, you have to realize where you are today, or how things are going today isn’t going to be where you are going to end up, you have to kind of take it day by day, feedback by feedback, sale by sale, to really build something ground up.

Joseph– That’s true when you are selling any type of product, but it is especially true with this when people are getting a box of assorted items that they don’t know of ahead of time. ( Exactly what they are going to be getting). Then it can be open to a lot more criticism. So yeah, don’t get discouraged

Oisin- Well Joseph, thanks so much for joining this interview today and we are excited to share this with our readers and get the word out about how people become successful in the subscription box industry!