ChargeX Beyond was all about looking ahead and reimagining a more robust future with the best and brightest minds in ecommerce. Hundreds of merchants, partners, and colleagues came together in Washington, D.C. for three days of storytelling, learning, and in-person connection. 

Missed the conference this year—or just want to relive the details? You’re in the right place. We’ve got the full event recap, including speaker highlights, industry insights, and details on next year’s event.

Merchants that go beyond

We kicked things off on Wednesday evening with a welcome reception. A highlight of the night was our Merchant Gallery, a museum-style showcase spotlighting eight Recharge merchants whose purpose goes beyond their products.

All of the featured brands—Blueland, Bobbie, Bite, Who Gives a Crap, Early Majority, Blume, Tea Drops, and Bird&Be—are dedicated to making a difference in both their customers’ lives and our society as a whole. And each one embodies the spirit of the beyond event theme—helping us set an intention for the rest of the conference.

Opening remarks & the Recharge product roadmap

After we recounted moments from the previous evening and reconnected with old friends, Thursday’s sessions began with a welcome keynote address. Recharge CEO Oisin O’Connor walked us through the three stages of ecommerce our world has seen thus far: The Start, The Scale, and—our present state—The Mature Phase.

In today’s world, Oisin noted, being a resilient business reigns supreme. Now more than ever, businesses are looking for ways to streamline their operations, foster loyalty among their customers, and create sustainable practices.

Oisin was joined by Erin Carey, Recharge’s Senior Director of Product & Customer Marketing, who spoke about how brands can incorporate “cornerstone moments” into their shoppers’ journey to increase engagement and retention.

Jordan Bluhm, Recharge’s Principal Product Manager, then walked through the Recharge product roadmap, announcing several major upcoming releases—Bundles, Memberships, and Rewards—that will enable merchants to maximize the value of their customers. 

Finally, Wesley Magness, Research & Development at Recharge, walked us through Flows, the glue that holds Bundles, Memberships, Rewards, and Subscriptions together with automations for surprising and delighting customers throughout their journey.

From sign-up to staying power: Strategies for retaining subscribers from Chris George

Next, Chris George, Co-Founder of the acclaimed SubSummit subscription commerce, talked through his strategies for retaining subscribers in today’s market.

These days, Chris noted, many customers don’t feel loyal to brands due to factors like poor product quality, negative customer service experiences, and lack of personalization. The key, he said, is to focus on listening to your customers and what they’re obsessing over—then bring this back to your brand to do something about it. For subscription brands, he observed, the stakes are especially high, as you’re not just competing within your own vertical, but also with other subscription brands. 

Insider expertise from merchants & partners

Thursday afternoon brought a wealth of breakout sessions organized around different themes. 

On the partner track, Brandon Amoroso, Founder of Electriq Marketing (a DRINKS company) kicked things off on the main stage with a talk on building a retention program for your merchants. Afterward, Adam Pearce and Peter Gardner of Blend Commerce discussed agency and tech partner strategies to help merchants grow LTV and better understand their customers.

On the merchant track, attendees could choose from a multitude of sessions. Topics ranged from psychology-based advertising techniques to strategies for personalizing the buying experience with customer data.

Lending their expertise to each session were industry leaders from PrettyLitter, Bokksu, Vegamour, Blueland, HelloBello, KnoCommerce, Friendbuy, Chelsea & Rachel Co., Open Farm Pet, Absolute Web, Rebuy, Sticky Digital, Wandering Bear Coffee, Primal Kitchen, Uqora, Churn Buster, Alpha Omega, Praella, and Scoutside.

Merchant & Partner award winners

ChargeX 2023 marked our first ever Merchant & Partner Awards, where we honored exceptional members of our ecommerce community. And the awards went to… 

Partner Rising Star Award: Vaan Group

Our Partner Rising Star Award recognizes a Recharge partner who is investing in growing their subscription business with Recharge and taking the steps to proactively build their business for both immediate and long-term success. Congratulations to our winner, Vaan Group!

Amplifier Award: Gorgias

The Amplifier Award recognizes the Recharge technology partner whose integration and engagement has added significant value for Recharge merchants. Congratulations to our winner, Gorgias!

Agency Partner of the Year Award: Electriq Marketing

The Agency Partner of the Year is our top partner award, recognizing the Recharge agency partner who led the pack over the last year in terms of engagement, merchant focus and execution. Huge congratulations and appreciation to Electriq Marketing!

Merchant Rising Star Award: ModifyHealth

The Merchant Rising Star Award recognizes a new(er) Recharge merchant who experienced a high level of growth in 2022. Congratulations to ModifyHealth!

Holiday Highlight Award: Clearly Filtered

The Holiday Highlight Award recognizes the Recharge merchant who achieved the most impressive results over Black Friday/Cyber Monday. Congratulations to Clearly Filtered!

Merchant of the Year Award: Crunch Labs

The Merchant of the Year is our top merchant award, recognizing the merchant who exhibited best overall performance in 2022. Congratulations to Crunch Labs!

Beyond Award: Bobbie & Presidio Creative

And finally, The Beyond Award recognizes both a Recharge partner and merchant who implemented a program or project within Recharge that goes above and beyond out-of the-box capabilities. A huge congrats and thank you to Bobbie & Presidio Creative!

To innovation & beyond with Matthew Luhn

An expert at crafting narratives and creating vibrant characters, Matthew Luhn is a Pixar-credited author and storyteller whose credits include the Toy Story films, Monsters Inc., Finding Nemo, Cars, Monsters University, Ratatouille, and UP.

His keynote speech focused on how merchants can use storytelling and narrative techniques—like the hero’s journey narrative arc—to center customers, engage audiences, and foster an environment of innovation. 

Closing out Day 2

Throughout the conference, guests could stop by our office hours in between sessions to chat one-on-one with Recharge product experts about our Early Adopter Program, Product Roadmap, and any specific product-related questions.

After the sessions, we capped off Thursday with wine and whiskey tastings, followed by a party at D.C.’s stunning LINE Hotel to chat with our new connections over music, food, and drinks.

Minimizing risk & maximizing return through experimentation with Prismfly

We began the final day of the conference with a talk from Prismfly’s Co-Founders and Managing Partners, Yaseen and Yusuf Shurbaji, on how to maximize return and minimize risk through ecommerce experimentation.

They walked us through how to focus on high-impact, low-effort tests, leverage different types of experiments, and contextualize your conversion rate performance with the right supplementary metrics.

Building a brand with individuality & community at the forefront with Jonathan Van Ness

Friday’s keynote with Jonathan Van Ness was one of the most anticipated talks of the conference—and it did not disappoint.

While Jonathan is beloved for his role on Netflix’s Emmy Award-winning reboot series, Queer Eye, his expertise goes far beyond TV.  In his talk, he shared insights from his experience launching his acclaimed DTC haircare brand, including his rigorous testing process and priority to help people feel comfortable in their own skin rather than buying into a specific, pre-set beauty standard.

Jonathan also shared valuable insights for growing a successful business with the crowd. When asked what his one piece of advice would be for the audience full of entrepreneurs, he said, “Hire slow, fire fast,” emphasizing the need to invest in your team for long-term, sustainable growth. 

From innovation to authenticity: How Sahara Lotti turned Lashify into an international success story 

Our final merchant-led talk of the conference featured Lashify’s CEO and Founder Sahari Lotti. During this fireside chat with Oisin, Sahara shared the importance of building a brand that is not only authentic to you, but also helpful to your customers. Centering your customers in this way, she explained, cultivates resilience in your brand, as well as loyalty in your customer base. 

Sahara noted the importance of customer feedback to Lashify’s success, and how channeling this feedback into action has been paramount to the brand’s growth. 

Join us next year in San Diego!

And that’s a wrap on ChargeX 2023! We’re so grateful to the merchants, partners, and team members that made this year’s event possible. We loved connecting with you in person and hope you had a chance to build valuable connections with fellow industry leaders.

Stay tuned for updates on next year’s conference, which will take place in San Diego. We hope to see you there!

The post ICYMI: Going above & beyond at ChargeX 2023 appeared first on Recharge.

One way to do this is through cross-selling, a strategy that involves recommending complementary products to customers at the point of purchase. Cross-selling not only increases revenue per customer but also improves the customer experience by helping customers discover products that they may not have considered before. 

In this blog post, we’ll explore some effective strategies for increasing your revenue through cross-selling, how to measure the effectiveness of your cross-selling, and provide ideas and cross-selling examples that you can use to improve the bottom line of your ecommerce site.

3 strategies for increasing revenue through cross-selling

1. Use customer data to personalize your cross-selling recommendations

One of the most effective cross-selling tactics is to personalize recommendations based on customer data. Personalization is key to effective cross-selling campaigns. You can start by collecting and analyzing customer data, such as purchase history, browsing behavior, and demographics. This data can then be used to recommend complementary products that are most likely to appeal to a particular customer. 

A great cross-selling example is from Blueland. When a customer adds a Laundry Starter Pack to their cart, during checkout, Blueland offers additional products that the shopper may want to round out their initial purchase. These simple product suggestions not only result in more sales, but also act as an awareness play for your customers at an influential time in their journey. 

To incorporate data into your cross-selling strategy, you can use personalization tools such as Octane AI, which lets you create product recommendation quizzes and questionnaires that you can use to personalize cross-selling on your website.

Different businesses can personalize their recommendations in data-driven ways by basing their recommendations on a customer’s previous order history or through customer segmentation. For example, if a customer has bought pet food from your website, you can recommend products like treats, toys, or other related items. 

2. Incorporate discounts strategically

Another strategy to consider for increasing average order value (AOV) through cross-selling is to incorporate discounts. Discounts can be an effective way to incentivize customers to take advantage of cross-selling. When they’re offered a discount, customers may be more willing to try out new products without the fear of having to commit financially to something they may not like.

However, it’s important to be sure not to over-discount your products and miss out on profit margin. Instead, you must research and determine the ideal discounted price for your efforts that will help increase purchases without bringing down your bottom line.

For example, a business selling skincare products might offer a discount on a new facial cleanser when a shopper purchases a moisturizer. This can incentivize them to try out the new product while still increasing AOV and maintaining profit.

3. Increase the accessibility of cross-selling 

Another strategy for increasing revenue through cross-selling is to increase the accessibility of your cross-sell items. Ease-of-use and convenience are crucial to successful cross-selling, and making those opportunities easy and convenient for your customers to take advantage of can help boost sales for your online store.

To make cross-selling convenient for your customers, consider adding cross-selling opportunities at multiple points in the customer journey. For example, you can include cross-selling opportunities on the checkout page, in the customer portal, and in post-purchase emails. Additionally, make sure your cross-sells are accessible on multiple devices through strategies such as transactional SMS.

For example, Who Gives A Crap sells a toilet paper subscription. In the customer portal, shoppers can add complementary items to their next shipment. Without being forced to make an additional purchase, an existing customer can easily and quickly add on relevant products and know they’ll be included in their upcoming shipment. A personal anecdote—this cross-sell works on me… a lot. 

How to measure the success your of cross-selling program

Once you’ve implemented cross-selling strategies, it’s important to measure their impact on revenue and other key performance indicators (KPIs). There are several metrics ecommerce merchants should be tracking to evaluate cross-selling campaigns, including AOV, lifetime value (LTV), and customer retention rates.

Increase average order value using cross-selling techniques

A successful cross-selling strategy should increase the amount of money your average customer spends with you in a single order. If you see your AOV declining or remaining stagnant, re-evaluate your discount strategy to ensure you’re not discounting to the point of losing out on important profit margins.

Cross-sell your way to increased customer lifetime value

. It’s crucial to track the total amount of money a customer will spend on your site over the course of their relationship with your business. In doing so, you can see if your cross-selling efforts are leading to a higher lifetime value for your customers. Increases in LTV ultimately mean that your customer is continuing to see the value you bring to them. By highlighting the key benefits of additional products, you not only can see an increase in revenue over time, but also an increase in your longevity with your customers.

Retain your best customers by suggesting additional products

By tracking the percentage of customers who continue to purchase from your business over time, you can see if your cross-selling strategies are leading to a higher likelihood of customers returning to purchase again. By using strategies like including cross-selling options in places like the customer portal or in transactional SMS, you increase opportunities for your customers to engage with you. Increased engagement can mean increased retention. And in a world in which acquisition costs are higher than ever, retention remains the most important focus for ecommerce businesses.

The difference between cross-selling & upselling

Cross-selling isn’t the only road to increasing AOV, LTV, and retention. Upselling, while often referenced when talking about cross-selling, is a separate sales technique to increase revenue. Where cross-selling focuses on offering other products to customers that are similar in nature, upselling provides options for an upgraded version of the product or service a customer is purchasing.

For example, Arcane Fibre Works, a yarn company, offers customers a subscription as part of their “Sock Club.” Yarn enthusiasts can select the color-family of yarn they’d like to receive. But Arcane Fibre Works has a creative upselling tactic. In their dropdown, they offer a “One of each!” option, where customers can receive all 3 in the color-family for an upcharge.

Cross-selling is crucial

Cross-selling is a crucial sales tactic of any ecommerce business looking to maximize revenue and improve the customer experience. By using customer data to personalize recommendations, incorporating discounts strategically, and increasing the accessibility of cross-selling options, merchants can effectively increase their bottom line. Additionally, tracking key performance indicators and continually optimizing efforts can help merchants see the greatest impact from cross-selling campaigns in terms of AOV, LTV, and retention rates. 

The post Maximizing revenue through ecommerce cross-selling: Tips for merchants appeared first on Recharge.

With giant online retailers, like Amazon, offering same-day or next-day shipping at no cost to the buyer (if they’re using Amazon Prime), merchants are up against a new expectation from shoppers. While it’s unrealistic for customers to expect the same from brands they subscribe to, merchants must create the best experience through the shipping process to compete. 

Getting subscription box shipping right

There are many decisions a merchant must make before a box is even sent to a customer. What kind of mailers or boxes will you use for your product? Are sustainable shipping practices an option? Will you offer free or discounted shipping for subscribers? How can you ensure your shipping process is cost-effective for your business? 

1. Choosing the right vessel for your products

There’s a delicate balance between keeping your shipping prices low while also giving your customers a great unboxing experience. Choosing packing materials that are lightweight, like envelopes or poly-mailers, can help you save money, but they also have the propensity to rip during the shipping process. Choosing a custom box gives customers the immediate delight factor, but can be a more expensive option.

2. Weighing the sustainability option

Sustainability has become a huge focus for consumers in the last decade. Especially, as buyer generations skew younger—Millennials and Gen Z—the importance they place on sustainable shipping practices increases substantially. They are even willing to pay a premium for shipping, as long as it follows environmentally friendly practices. 

3. Providing shipping discounts to subscribers

Part of the benefit of being a subscriber is receiving additional value from a brand. Many merchants offer free shipping to their subscribers to entice them to regularly and repeatedly make purchases. As a subscription business grows their subscriber base, the reliability of recurring revenue can allow for savings on shipping costs for their customers. 

4. Choosing the right shipping services for the right cost

It can be easy to default to the cheapest service for shipping your subscription boxes to customers. But oftentimes, cheap doesn’t always mean the best. Every ecommerce merchant has unique needs to get their packages to their customers in a timely and reliable manner. Find a highly reliable shipping provider that can handle fulfillment in the ways you need it the most.

The top 4 shipping carriers

Every ecommerce merchant will have different needs and preferences when it comes to shipping carriers. USPS, UPS, FedEx, and DHL are the most popular carriers for subscription box shipping. Each has different delivery times, shipping rates, and restrictions on the weight and size of packages. 

1. USPS

USPS is a great option for shipping lightweight items. It’s typically the least expensive carrier, with the lowest rates for items under two pounds. Their Priority Mail Cubic pricing model is also based on volume, not weight, for items under 20 pounds, so merchants can often find better pricing than with other carriers when shipping heavier items. 

Note that while USPS has gotten better in recent years, they are still slower than other carriers and unreliable in certain areas of the country––which might affect how quickly they arrive in your customers’ hands. 

2. UPS

Merchants who need to ship heavier items or more expensive items often use UPS. Where USPS has a maximum weight of 70 pounds, UPS doubles that for a maximum shipment weight of 150 pounds. UPS also ensures products up to $50,000, making it a more reliable choice for luxury items like jewelry, watches, and furniture.

3. FedEx

FedEx is a premium service that many merchants use, especially for same-day or overnight shipping. With their options for refrigerated and cold shipping and fast and reliable delivery times, FedEx is often the preferred choice for ecommerce food merchants. 

4. DHL

DHL is a global delivery company that specializes in international shipping. They have a wide network of local locations, and they’re one of the most reliable options for shipping packages abroad. If you’re shipping in the US, DHL is likely not the right choice for you due to its shortcomings in reliability and tracking. 

Specialty cases for shipping

For ecommerce merchants with specialty items, it’s imperative to review the regulations of each shipping carrier. 

Wine merchants, for example, cannot ship via USPS due to their regulations against alcohol. Instead, they must use UPS and FedEx, both of which allow alcohol and heavier shipments. 

Merchants selling cannabis products are even more highly regulated by each shipping carrier. CBD products need to be tested and regulated for acceptable levels of THC before they even make it to the carrier for shipment. 

Packaging also comes into play with specialty items. Do your subscription box products need to be refrigerated? Do you need extra padding or dividers to prevent damage? What are the unique requirements to ensure your product gets to the customer quickly, safely, and intact?

Considerations for ecommerce shipping

There are a number of different considerations that go into choosing the right ecommerce shipping carriers. 

• Cost: How much does it cost? Are there any additional fees to ship subscription boxes? Are you using cubic pricing or pricing by weight? Are custom boxes worth the investment or is it better to use pre-priced boxes, like USPS Priority Mail? Are you eating the cost of shipping to provide your customers with a free shipping option? 
• Dependability/deliverability: Does this carrier have a high average deliverability rate and good customer service? Are there guarantees of delivery that you can confidently communicate back to your customers? Do you have a good tracking system you can rely on? When will the package arrive if you ship through this carrier? Can you or your customer track it in real-time or do you need to wait for an update from your carrier whenever something happens with the shipment? Will shipments make it to destinations that are in more remote locations?
• Access: Is this carrier easy to use and understand? 
• Customer support: Does the carrier have good customer support? Can you speak to someone if you need help, or do you need to go through a ticketing system and wait for an email response? 

Shipping is one of the most important elements of your ecommerce business. You can have a great website, amazing products, stellar customer support, and a solid mission, but if you don’t have reliable shipping options, it could negate all of the hard work you’ve put into building a strong subscription business.

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Standing out from the competition in a highly saturated market has driven merchants to deliver personalized experiences to capture loyalty among their customer base. A study by Segment found that 44% of buyers would likely become repeat customers if the shopping experience were personalized. It’s a difficult job, but when done right, can give a better understanding of customer behavior and their appetite for personalized experiences.

What is ecommerce personalization?

Ecommerce personalization can be defined as the process of using both anonymous and known customer data—demographics, past purchases, browsing behavior, or search intent—to create unique experiences for online shoppers visiting and purchasing from an ecommerce website. 

Ecommerce personalization efforts can look as straightforward as questionnaires on a site to provide product recommendations. They can also be as complex as using browsing history and domain referrals to change a website to fit a specific customer profile.

How to implement ecommerce personalization

There are many different ecommerce personalization tactics an online store can use to enhance the customer experience and recommend relevant offers to increase sales. Email is a channel that is used often to grab the attention of a customer by using their first name. In fact, emails with the recipient’s [correct] first name have 2.6 times higher open rates than generic emails. But that’s not the only opportunity merchants have to create a strong personalization experience for their customers. 

1. Utilize quizzes & questionnaires

Quizzes and questionnaires are often used by brands who need to present product recommendations based on the specific needs of their customers. The shopping experience can look like this: A customer needs to find a skincare regimen that addresses the areas they’re most concerned with—aging, sun damage, and non-uniform color. They come across user-generated content (UGC) from an influencer they follow, and find themselves on a skincare brand’s website. 

After browsing, they realize there are far too many options for them to make an informed decision. Thankfully, the brand has a “Find Your Regimen” questionnaire front and center on their website. The customer answers the questions, hits submit, and is given personalized recommendations for products that will help them achieve their skincare goals.

2. Implement dynamic content

Another tactic used in personalization is to serve up relevant content to customers based on their previous sessions on a website. For example, new customers to a site may see the overall generic messaging and images that speak at a high level about the brand and product offerings. But as those website visitors return, merchants can use machine learning to understand their user behavior—preferences, previous purchases, and even intent—and show them images and content that is relevant to the online shopper. This personalized experience can create a sense of trust, feeling that the merchant fully understands the unique needs of their customers. 

Merchants can also use third-party data to supplement these personalization efforts and lean into regional or location specific information, demographics, and look-alike profiling to engage customer segments.  

3. Create complementary offers

The personalized shopping experience can also be achieved by utilizing your own knowledge about your products and serving up complementary products that would further drive customer satisfaction. For example, if a hair care merchant were offering shampoo and conditioner sets targeting frizz, they could offer up a serum or other styling products that are directly in line with what their customer is trying to achieve. It’s a cross-sell tactic that can ultimately lead to more sales, while also enhancing the customer experience.

Examples of ecommerce personalization

A good ecommerce personalization example is JVN Hair. In the navigation of their site, they have an option to take a “Hair Quiz.” Each question also comes with a tip so customers can have a better understanding of how best to answer the quiz for their specific hair needs. The results are calculated to provide personalized product recommendations, all complementary items to each other, with a 25% off discount. 

Another way to deliver personalized experiences is in using bundling functionality, like the brand, Crafty Ramen. By selecting preferred options, customers can build a custom kit personalized to their taste, mitigating the possibility of receiving an item they don’t care for. Enabling bundling on product pages further drives customer engagement month after month. Customers can select new items for their bundle, or go all-in on their favorites.

There’s a sentiment among some customers that subscriptions are too much of a commitment. Wild Planet Seafood puts language and functionality upfront for their subscription offering that showcases how their customers can personalize their subscription experience. 

Providing product swap options, different package sizes, and desired shipment frequencies, customers can create a personalized delivery that can alter and shift as their circumstances change. This type of personalization is less about the specific product offering, and more about working around unique schedules and shipment preferences. 

3 benefits of implementing ecommerce personalization

1. Customer loyalty

Most businesses are in the game of customer retention. Especially for ecommerce, returning visitors aid in meeting business goals by creating a recurring revenue stream. Personalizing the customer experience further drives loyalty, allowing your shoppers to understand that you “get” them. By showing them you care to understand their unique needs, they are more likely to return month after month to get what they need.

2. Competitive differentiation

What about your product or company makes you different from your competition? How would your ideal customer identify with your brand in a way that speaks to them? As the shopper pool gets younger, they are gravitating more toward brands that have their own best interests covered. Personalization based on mission is a way to stand out from others in your market segment. Customers that feel as though they are truly understood by a brand are more likely to invest their money in products that they feel meet their specific tangible and immaterial needs.

3. Increases conversion rates & boosts sales

Creating an ecommerce site layout where personalization is at the forefront can convert first time visitors into loyal customers. Avoiding analysis paralysis by utilizing personalization tactics to offer up the right products at the right time can eliminate the overwhelm customers are often faced with. Think of it as doing the heavy lifting for your shoppers. You have done the hard work of researching what would be right for them. Now all they have to do is trust that you truly do have the products that will solve their unique challenges or problems. 

Marketers agree that personalized experiences are one of the most important tactics to focus on to boost sales. According to respondents from Campaign Monitor, personalization has increased sales by 20% on average.

Challenges of ecommerce personalization

When done right, the benefits of ecommerce personalization outweigh the risks—but there are a few reasons why personalization can be challenging. Get it wrong, and customers are likely to leave you for a competitor who is nailing their personalization strategy. 

Dirty data

One challenge of ecommerce personalization is managing and analyzing the amount of data needed to nail the personal touch. Maintaining “clean” data is imperative to generating personalized content. Without it, customers can very quickly lose trust in the brand’s authenticity.

Too many variations

Try not to boil the ocean. Personalization can also get unruly very quickly. Think of all of your customer segments. What would it look like if you created variations to copy on your most highly trafficked web page that speak directly to them? 

Now slice the segment even further. What if you split that specific segment into further micro-segments based on a demographic indicator? Your one page of copy has now ballooned into many iterations all trying to say the same thing, but in a specific way to a specific group of people. The key here is to figure out your top customer segment—those most likely to convert and to stay loyal—and cultivate personalization for them first. Once you establish the baseline, you can build slowly and accurately.

Human or machine?

Budgeting and bandwidth often come up as challenges in getting personalization right, so merchants often turn to artificial intelligence (AI) to do the heavy lifting for them. Where AI can be a powerful tool to create variations on a message, the same challenges apply as the data issue. Products of AI will still need a critical eye for review and accuracy before going out into the world to ensure that the customer doesn’t see through the tradeoff of human touch for the sake of efficiency. 

What it means to personalize your customer experience

Personalization has become the benchmark of perfection for ecommerce brands. Without some level of personalization opportunities, customers can point out the hole that’s missing in their experience. 

Ensure you are amplifying customer experiences throughout every phase of the customer journey. What are their touchpoints and how can you make each of those feel unique to the user? Analyze high traffic places on your site and ask yourself if those areas can be altered to provide a personal touch.

Remember, the better the personalization, the stronger the customer loyalty. 

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What is the definition of return on ad spend (ROAS?) 

Return on ad spend can be defined as the amount of revenue generated for every dollar spent on advertising. ROAS is a key metric used by an ecommerce business to identify the success of a specific marketing campaign. It enables businesses to forecast exactly how much revenue they can expect to generate from their advertising spend over a given time period.

How to calculate ROAS

Calculating your return on ad spend can be similar to calculating your ROI. Dividing the dollars spent by the revenue generated by a specific ad campaign will give you your ROAS. 

The ROAS formula is: 

ROAS = (revenue gained from ad campaigns / ad spend) x 100

A great example of this can be found in digital advertising. When looking for the ROAS on a specific ad campaign, you can take the sum of the ad costs for paid ads, such as pay-per-click (PPC) and paid social. You can then find the sum of the revenue generated from those activities. Revenue generated, in this case, would be the deals that have closed as a result of this campaign. With low advertising costs, the higher your ROAS will be. 

Let’s say your digital marketing team spent $1,000 on an advertising campaign, and $5,000 of revenue was generated. Your return on ad spend would be 500%, or a 5:1 ratio.

According to BeProfit, the current average ROAS for ecommerce businesses is 2.87:1, or a 287% return on ad spend.

The importance of evaluating your return on ad spend

Developing a strong, flexible marketing strategy is key to getting the most revenue for the least amount of spend. Using past ROAS data can help in building a solid plan to increase your overall return while also ensuring you’re hitting your target audience at the right time. 

With any digital medium, audience targeting and ad campaigns to hit those audiences are constantly shifting and changing. That’s why it’s so important to have a continuous interpretation of your marketing metrics, and to continuously refine your campaigns to maintain your target ROAS.

Paid ads aren’t the only way to get in front of your target audience. A robust marketing strategy tackles the customer journey and ensures there are activities for prospects at every stage. Things like search engine optimization (SEO) to drive organic traffic, or targeted email campaigns to your database, are free tools you can leverage to capture interest outside of paid efforts.  

Other metrics to consider when evaluating the performance of an advertising campaign are: Vendor costs and return on investment (ROI) of any tools you’re using, customer lifetime value (LTV), cost-per-lead (CPL), and click through rate (CTR). You’ll often notice that a good ROAS means that these other metrics are also in good standing. 

Pairing these metrics together allows for digital marketers to evaluate the efficacy of their campaigns and plan where to spend their marketing dollars for greater efficiency and return. 

How to improve your return on ad spend

At the end of the day, generating revenue is a key function of the marketing team. By building in efficiencies to increase the performance of marketing campaigns, you can do more with less, bringing new leads to the table and more revenue to the bottom line while reducing overall costs.

However, in today’s highly competitive marketing environment, maintaining a high ROAS can be difficult. Relying on a single ad campaign to maintain your target return on ad spend can result in a very sharp decline if anything goes awry. 

Pairing your overall ad campaign strategy with non-paid activities can help increase brand awareness, which in turn can help the overall success of your marketing efforts. A great way to do this is to utilize marketing tactics like email and SEO while running ads with similar or complementary messaging. As prospects see your ads and find interest in your product, they can take action—whether that’s going to your website, or a specific landing page. Once their information has been captured, you can send them targeted emails to drive their interest further. As they convert, the attribution model still ties that revenue to your initial ad campaign, helping to increase your ROAS.

Another way to increase your ROAS is to use existing data to make informed decisions before a campaign is even launched. Let’s say you had a paid search campaign that resulted in a low ROAS. Look at the specifics of that campaign: What ad groups were used? What was the bidding strategy? What was the audience targeting? Were there wrong keywords being bid on? 

Pivoting on the areas that contributed to the low ROAS can help you identify areas to test out new strategies. If the ROAS calculation remains low, you can look harder at the overall messaging, product offering, or the specific ads that were used to try to generate revenue. 

The post Return on ad spend (ROAS): Are your marketing campaigns driving revenue? appeared first on Recharge.

What is value-based pricing?

Some art, some science, value-based pricing (or value pricing) is a pricing strategy in which a merchant leverages the customer’s perceived value of an item, or what a customer thinks the product is worth. This pricing strategy works best for companies who have a strong focus on building customer relationships and soliciting customer feedback to understand what they are willing to pay for the product. While a value-based pricing strategy can get you a profit generating price, it is also the most complex and requires a lot of attention to get right.

Alternatively, ecommerce businesses with less focus on the customer or ability to solicit customer feedback tend to turn to cost plus pricing or competitor-based pricing. Cost-plus pricing (or cost-based pricing) is the most straightforward, yet antiquated pricing strategy. To determine cost-plus pricing, merchants take the cost of production of a product, determine their desired profit margin, and calculate a price based on that. 

Competitor-based pricing is a pricing method that includes market research for the price of competitive products and using that to inform the overall price of your products. While this pricing model can keep you in line with your competition, it assumes that they have done the strategy planning and research to ensure they are pricing effectively. However, if they haven’t, you all are potentially stuck with ineffective price setting that could result in lower profits.

Price Intelligently put it in perspective: Cost-plus pricing focuses on cost. Competitor-based pricing focuses on the competitor. Value-based pricing focuses on the customer.

Real-world value-based pricing examples

A great example of an ecommerce merchant using a value-based pricing model is Verve Coffee.

Verve Coffee sells a wide range of coffee from various roasters and for various brewing methods. Not only is the value illustrated in their story, but also for each coffee variety, where they give customers the information they need to know in order to brew their best cup.

Additionally, they provide details for every bag of coffee they sell, from the producers to the cultivar, processing method, and even the elevation it was grown at. Providing this level of detailed information increases the perceived value of the coffee, giving customers a personal connection and confidence in purchasing that many other coffee merchants don’t provide.

Another example of a merchant using value pricing is Love Wellness, a wellness brand made for women, by women.

Love Wellness leverages clean ingredients and showcases their “doctor developed” products to create a sense of trust in their customer base. From the consumer perspective, products that are created with that level of care have more value than those who are made quickly and at a lower price point. 

The pros of value-based pricing

While value-based pricing is complex by nature, ensuring your products have actual value to the customer allows you to maintain a higher price point while ultimately allowing you to maximize profits. 

There are many additional benefits to value-based pricing outside of bringing more to the bottom-line. As many merchants who focus on a recurring revenue model can recognize, building stronger customer relationships creates a sense of loyalty and higher retention rates among your top customers. Using a value-based strategy targets these individuals by ensuring they are receiving a product they feel is worth the higher prices. 

Value-based pricing can also aid in giving merchants a better brand perception. By continuously focusing on the value a product can bring their customers, merchants are seen in an overall positive light—as long as that value continues to stay high.

The cons of value-based pricing

The flip-side of value-based pricing as it relates to the perception of your brand is if the value slips, but the pricing does not change to reflect that, customer satisfaction decreases. It’s not an exact science; however, brands should be using both qualitative and quantitative data to make informed decisions about how much value customers are assigning to their products and how much they’re willing to pay as a result of that. 

Raising prices for products without increasing or further illustrating the value can create a negative sentiment for your brand. From there, it can take that much longer to reestablish the value your products bring. 

Pricing something too low can also diminish the perceived value of your product. When products are considered “too cheap,” perception is that the product is also of low quality, and therefore low value. 

It can also be hard to implement value-based pricing. Discovering a customer’s willingness to pay a premium for something needs constant maintenance, taking into account both the competitive landscape and the economic climate. 

3 methods for adopting value-based pricing

Do market research

Establishing a value-based price for your products is ineffective without proper data analysis. Identifying what the market needs, while also figuring out who exactly your ideal customers are, ensures you are setting prices that speak to the value of your products. 

Develop customer profiles or buyer personas

After your ideal customers have been identified, you need to map those to specific profiles or personas. What are their unique needs, pain points, and overall demographic information? Who are you targeting within the broader market and how do they like to be best communicated with? What do they find valuable about products within your market segment? Lay these out in an easily digestible format so you can see them all at a glance and understand the nuance behind each one.

Conduct focus groups to understand perceived value and willingness to spend

Bring a group of your ideal customers together in a series of focus groups with the intention of using real data to effectively price products for them. One way to do this is a price sensitivity questionnaire. Ask them about a specific product and use questions to determine what would be out of the question or too high for them to pay, what would be way-too-low to pay, and what would be right in line with what they would deem appropriate. Aggregate this information to understand what the ceiling and floor looks like for the final price.

In determining the value creation of your products, create another questionnaire to help customers select which products in a list have the most value, and which have the least value. Create multiple of these short lists with 4-6 options in each one, all at different price points. Then create a grid to analyze that compiles the data from all respondents to determine the value your customers assign to certain products.

Should you use value-based pricing?

In short, yes. Value-based pricing captures a customer’s justification of spending for increased value. This strategy enables you to focus on creating the best products you can, and generating targeted and specific campaigns to your customers to illustrate that value. It helps you focus your spend efforts while also creating attention around amplifying the customer relationship. 

The post Value-based pricing: Pros & cons of this strategy appeared first on Recharge.

However, when presented with too much choice, we face a dilemma. What if we make the wrong decision? What if we spend time overanalyzing our choices, only to become overwhelmed by the entire process?

Choice paralysis is a common problem that ecommerce business owners need to be aware of and work to mitigate. Left unchecked, you could be creating undue decision fatigue for your customers, and in the long run, leaving them to the point of no purchase or even cancellations. 

What is choice paralysis?

Choice paralysis, sometimes referred to as analysis paralysis, is the detrimental pause customers face when presented with too many options for fear of making the wrong choice. 

Most people may think that customers want as many choices and options as possible. But the correlation between choice and satisfaction is not one-to-one. In fact, studies show that too many choices reduces future satisfaction because the decision-making process becomes too overwhelming. This results in decision paralysis which ultimately leads to the reverse outcome…they’re unable to make a decision at all.

The risks of choice paralysis

At the end of the day, the decision-maker, aka your customer, is the person who will need to overcome their analysis paralysis. But without intervention from you to help point them in the right direction, you run the risk of losing them altogether. 

Choice paralysis can ebb and flow in intensity for your customers. Perhaps you are selling to a parent of young kids who is the default decision-maker in their home. Pairing the constant loop of decisions they have to make on a daily basis surrounding their kids and family with too many choices from your product offering can result in overthinking and overwhelm. It’s not that your products are even too complex or have too many choices. But when combined with their life of decision-making, it can stop them in their tracks.

Who faces choice paralysis?

Research shows that all consumers face analysis paralysis. Important decisions, such as medical decisions or job choices, can fatigue a customer before they even get to you. Life is full of complex decisions, so with you providing them advice on making the right choices for themselves, you can help improve the quality of their experience with you.

4 proven methods for overcoming analysis paralysis in your business

1. Present fewer choices: In 2000, Sheena Iyengar and Mark Lepper did a study around analysis paralysis with shoppers who were presented varying amounts of jam to sample and purchase. This study found that the customers who were presented with more choices (four times as many), were one-tenth as likely to make a purchase.
2. Make customers aware that they can unsubscribe or cancel anytime: By giving your customers a very visible “out,” you are able to alleviate the fear and analysis paralysis that their decision may result in a long-term commitment they’re not ready for.
3. Utilize personalization to create a tailored experience: When customers are deciding on what products to buy from you, they very rarely need to see your entire offering. Understanding who they are based on the data you’ve collected can help you present the best choice. By giving them a tailored experience on your website, you reduce the mental energy needed in their decision-making process, which in turn allows them to stop overthinking and make the right decision for themselves. 
4. Boil down complex options into tangible steps: If your offering includes multiple pieces to build as a whole—for example, a curated box of gift items—design a process for your customers to walk through to avoid analysis paralysis. One way to do this is by narrowing the focus to each step. First, perhaps they select a box design. Next, the card that will go inside. After that, food items. And finally, maybe more options to curate the box based on a color or theme. The basic idea here is to break down too many choices into manageable pieces. 

Choice paralysis examples & their solutions

Many merchants have found ways to boil complex decision-making into manageable opportunities on their website to help customers make the best decision for themselves, which ultimately reduces customer churn.

Bumpin Blends

A great example of this is with Bumpin Blends. Bumpin Blends sells pre-packaged and portioned smoothie cubes to provide customers with easy nutrition based on their needs. They have over 20 flavors, which could easily result in analysis paralysis for customers. But Bumpin Blends developed a quiz for customers to select the things that are most important for them to manage by using these smoothie cubes.

The result? A curated set of options that gives the person the ability to choose from the flavors they may like, without an overwhelming list.

Wüfers

Another example is Wüfers, creators of gourmet dog cookies. Wüfers presents customers with only two options to select from when it’s time to make a decision on their subscription offering. In a matter of minutes, customers can see the differences in package options, and the overall value of each box, so they can decide for themselves what they’d like.

The second part of their strategy utilizes the tactic of putting their cancellation and skip policy right up front. Of course, this doesn’t guarantee a customer will make a decision to subscribe with them, but it helps them not feel overwhelmed at the fact that they may be “locked-in” to a long-term commitment. 

Make decision-making easier for your customers

Overanalyzing and overthinking are two of the biggest side effects of having to make too many decisions. Ensure your customers can avoid feeling exhausted by making the decision-making easier for them. A customer’s inability to decide can lead to lost revenue—not to mention frustration. Thankfully, there is an easy solution to avoid choice paralysis: give fewer choices and a tailored customer experience. 

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The average customer for a subscription merchant can be highly valuable. As brands focus more on long-term relationships with their customers, they can see increases in key areas like average order value (AOV) and customer lifetime value (LTV). By comparing CAC to LTV specifically, you can understand not only the value that new customers bring in to your business, but also how you can pull various levers in marketing and sales spending to optimize your subscription business.

This post will define and help you calculate your customer acquisition cost, then dive deep into the various tips and tricks to using this metric as a key indicator of success for your business. 

What is customer acquisition cost?

Customer acquisition cost (CAC) is how much it costs you, the business, to acquire a new customer to purchase your goods or services. The costs associated with acquisition can look like marketing and advertising dollars, sales commissions and salaries, and any other money that goes into capturing interest from prospective customers. From there, you divide that total dollar amount by the number of customers you have. 

Understanding your CAC can help you not only identify areas of opportunity, but it also can help you streamline operations around a particular sales or marketing activity. For example, if you realize that your customer acquisition cost is high for a particular pay per click (PPC) ad set you’re running, you can repurpose that ad spend to other marketing campaigns that have lower CAC, allowing you to maintain a higher profit margin all around.

How to calculate customer acquisition cost

In its simplest form, customer acquisition cost can be calculated as:

CAC = Dollars spent on sales & marketing efforts ÷ number of customers acquired 

Within the “dollars spent on sales & marketing” bucket, you’ll want to be sure to include things like the salaries of your sales and marketing teams (including commissions), your advertising spend, any potential agency fees, field event spend, etc. To optimize around your customer acquisition cost, many businesses break out CAC by campaign.

For example, you could easily analyze the success of a field marketing event by adding up the costs of the prep of the event, the staff that attended, and any additional promotional efforts around it, then divide that total by the number of acquired customers as a result of that event. 

Your customer acquisition cost will ebb and flow, however, as customers may convert at a later date. You’ll want to create dashboards that can analyze this metric in real-time to get the most accurate representation of how certain sales or marketing activities are performing.

Customer acquisition cost sheet example

To measure and compare the cost of your customers acquired by campaign, you can create a sheet to track the entire process.

This can allow you to track the effectiveness of various campaigns and patterns in your expenses over time.

The link between customer lifetime value & acquisition cost

LTV is the metric used to determine how much revenue one customer will generate throughout their entire relationship with you. For subscription ecommerce businesses, LTV tends to be higher than general ecommerce sites, in that they will spend more over the course of their subscription with a brand.

LTV is calculated as:

Customer lifetime value = Average revenue per customer ÷ customer churn

Comparing LTV and CAC can help you determine the viability and health of your business. If your CAC becomes higher than your LTV, your business can not continue to succeed with that ratio. By comparing these two metrics, your LTV to CAC ratio is able to be analyzed. 

To calculate the LTV:CAC ratio:

LTV : CAC ratio = LTV ÷ CAC

Successful companies utilize the LTV:CAC ratio to determine spending habits for sales and marketing campaigns and help with understanding the value of each customer compared to how much it cost to acquire them. The ideal ratio is 3:1, though that can fluctuate. As long as the ratio is higher than 1, the customers are likely creating value for your business. 

3 factors affecting CAC for your online business

In an ever saturated market, new customers are harder and harder to acquire. To improve customer acquisition cost, you have to find ways to engage with these new customers via your ecommerce website in ways that are unique and memorable. Winning sales means considering the factors that affect your CAC, such as the ones listed below. 

1. Cost of goods & services

If you’re seeing that your CAC is too high, you may want to consider increasing the costs of goods and services to account for the value that they will bring in once acquired. By increasing the average order value of new customers, you can offset the high CAC and work to increase their overall LTV.

2. Marketing & sales strategies

If you notice that your CAC for a particular channel or campaign is suboptimal for your overall success metrics, work with your marketing and sales team to see how to pivot the strategy. Testing messaging, channels, or even product offerings can be great ways to see if you can lower the overall CAC for a given initiative.

3. Organic site traffic 

Focusing on marketing efforts that cost very little is another great way to affect your CAC in a positive direction. It is likely that your ecommerce site is bringing in a significant amount of your overall web traffic, and as a result, likely converting for you at a solid rate. 

Enhancing your organic marketing strategy to focus on SEO, more concise and meaningful content, and overall web performance can significantly impact your CAC. Just be sure to keep an eye on your conversion rates as more traffic visits your shop online. 

Benchmarking CAC

The US Small Business Administration recommends that an ecommerce store should spend 7–8% of their revenue on marketing costs. However, due to a variety of factors, many ecommerce companies will spend upwards of 20% to attract new customers. Whether due to seasonality, company maturity, or competitive pressures, the fluctuations in that spend will also fluctuate your customer acquisition cost. 

You can benchmark your customer acquisition cost against other ecommerce businesses or even traditional retailers. But it doesn’t always paint the clearest picture of how successful you are as it relates to CAC. 

Utilizing the LTV:CAC ratio is the most accurate depiction of your business success. As mentioned before, the ideal ratio for an ecommerce business is 3:1. You may think having a higher ratio—like 5:1—is even better. In actuality, it means that you’re spending too little to acquire customers. Focus on increasing the lifetime value of your average customer, while maintaining a 3:1 LTV:CAC ratio to determine how much revenue you should be attributing to your marketing spend and sales tactics. 

Customer acquisition cost vs. customer retention

It’s important to remember that your customer acquisition costs (CAC) aren’t the only measure of your value as a company. In fact, studies have shown that it can cost up to five times more to acquire a new customer than to nurture and maintain an existing one. With subscriptions, that is compounded by the fact that you are in the business of long-term customer relationships. 

Focusing on keeping your current customers happy further increases their lifetime value. As more customers enter the pool, take the time to create meaningful experiences so their LTV continues to stay high and you can rely on customer loyalty to keep them for the long haul. As your LTV continues to rise, you can invest more dollars into acquiring new customers.

Improving the LTV:CAC ratio to boost online sales 

You know how to calculate CAC now and why it’s an important metric to consider when building a business plan to sell products online. Customer costs will always be a part of your budget, whether you sell physical products or offer a service. There are some crucial strategies for lowering CAC that can help your company maximize the business to consumer relationship and win new customers at a lower cost. 

To improve the LTV:CAC ratio, consider:

• Bringing core competencies in-house
• Diversifying your social media marketing strategies 
• Researching your target audience
• Offering a subscription service to your customers
• Assigning an owner to the LTV metric 
• Making decisions informed by data 
• Optimizing the customer experience by adding loyalty programs

Attracting online shopping customers to your store

Whether you follow the business-to-business or direct-to-consumer model, at the end of the day, customer acquisition cost is a useful metric to help you determine the health of your company as it relates to acquiring customers. Thinking about the relationship from business to consumer can help your online store make decisions that will boost ecommerce transactions and give you an influx of new customers. Considering LTV in relation to CAC is crucial—when the total cost to acquire a customer is balanced by how much they spend with your store, your company will find success. 

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80% of consumers feel that it’s important for companies to design environmentally friendly products, making it imperative that ecommerce merchants evolve to meet their customers where they are with a mission that speaks to what they care about. According to Forbes, a corporate strategy focusing on sustainable practices can add brand value, meet consumer demands, increase efficiency, attract valuable talent, and create new opportunities. 

As Earth Day fast approaches, we wanted to highlight four Recharge merchants with missions of sustainability, showcasing how they not only talk the talk, but walk the walk. 

How Keap Candles keeps up with their sustainable mission

Keap Candles, a zero-waste candle company based out of New York, started with a philosophical question: “In an always-on world, how can we reconnect with ourselves and restore our balance with nature?”

You don’t have to search hard for Keap’s commitment to the environment on their website. In fact, on just about every page, they explain the purpose behind what they do. Whether that’s in their zero-waste initiatives, their work toward creating a 100% regenerative supply chain, environmental advocacy through the 1% for the Planet and Climate Collaborative, or their commitment to connecting customers with nature, the team at Keap Candles puts sustainability at the forefront. 

Their products and delivery to customers are also built with sustainability at the heart. They utilize innovative materials, making their sustainable packaging 100% plastic-free, reducing overall waste. 

The candles themselves use sustainable coconut wax for a clean and complete burn, and no adhesives are involved—so their labels and wicks can be easily removed, making the jars entirely reusable as well.

Who Gives a Crap gives a crap about people & the planet 

Who Gives a Crap started when they discovered that over 2 billion people didn’t have access to a toilet bowl. So in July 2012, co-founders Simon, Jehan, and Danny launched a crowdfunding campaign to raise enough pre-orders to start production on their product. 

Less than a year later, they delivered their first product and committed to 50% of their profits going toward improving sanitation in the developing world. 

With such a dedication to humanitarian efforts globally, Who Gives a Crap also committed to creating products that weren’t hurting the environment in which we live. They created their bamboo toilet paper line, which requires almost 90% less land per finished sheet to produce. 

Their recycled toilet paper is made from post-consumer waste paper, predominantly from schools and offices. They also offer free carbon neutral shipping on orders over $25.

Who Gives a Crap even focus heavily on sustainability and green practices on their blog, “Talking Crap,” which focuses on things like, “A few ways to be an eco-friendly traveler,” or “Going zero waste: 7 ways to reuse your food scraps.”

Dropps drops the packaging problem in return for carbon neutrality

Dropps, creator of the first laundry detergent pod, came alive due to a need for gentle detergent that wouldn’t strip delicate materials. Since its inception, Dropps has been committed to creating laundry detergent that would be tough on dirt, but gentle on clothes and the planet.

They employ numerous environmentally friendly tactics: Creating sustainable products, no animal-testing, carbon neutral shipping, and using low-waste packaging. Traditional laundry detergent comes in large plastic jugs, and their pod-like counterparts come in plastic tubs or pouches. 

Dropps wanted to reimagine how their laundry pods were sent, so they ship direct to their customers in a recyclable, compostable, and repulpable box. They even took it a step further by utilizing corrugated cardboard suppliers who are certified by the Sustainable Forestry Initiative, paper tape and recycling compatible adhesive (RCA), as well as  recyclable and compostable shipping labels.

Pela peels back the layers on how to stay sustainable

Compostable and cell phones are two things that don’t often go together. But Pela, creator of the world’s first compostable phone case, decided that our planet deserved better. 

Pela started with “a big, hairy audacious goal”—a BHAG—they want to create a waste-free future. In 2020, Pela published the Pela Lifecycle Assessment Report, updating and adding new calculations for their CO2 emissions, water, and waste impacts. In that report, it was illustrated that Pela uses 30% less carbon emissions, 34% less water usage, and a whopping 80% less waste production.

Pela’s mission and purpose helps offset the environmental impact of over 1 billion plastic phone cases that are sold each year. And every year, over 60,000 of those phone cases are thrown away because they no longer fit the current model phones. Pela continues to educate consumers that there are better alternatives out there that will further help the planet.

Taking small steps to reduce your carbon footprint

We know that not all business models can present fully sustainable options, whether due to product type, manufacturing processes, shipping constraints, or other external factors. But the world and technology is constantly evolving to support various businesses on their missions to become more eco-friendly and reduce energy waste. 

Using brands like Keap Candles, Who Gives a Crap, Dropps, and Pela as inspiration, find small sustainable avenues to carve out for their business. Building a more sustainable future helps us all in the long-run, for our planet, future generations, your conscious consumers, and future talent you’re looking to attract.

The post Dedicated to sustainability: Ecommerce merchants who showcase their purpose appeared first on Recharge.

There’s tremendous upside to conversion to subscription. Not only are subscription merchants 2—4 times more valuable than their counterparts, but they also have higher average order values (AOV), lower churn rates, and higher lifetime value (LTV).   

Create a subscription landing page

Too often, subscription businesses forget to create a subscription-specific landing page that informs customers about the value of subscribing, while also answering commonly asked questions.

It’s important to include not only your value-add messaging on this page, but also to remove roadblocks that would potentially prevent someone from coming back to you after they skip or cancel their subscription. This illuminates the low-risk opportunities for subscribers, in that they don’t have to worry about how hard it may be to cancel.

Default to subscription

In the checkout process, a great way to encourage more subscribers is to have the default option be “subscribe.” The caveat here is that this tactic must be paired with an excellent and strategic subscriber journey mapped out. If not, you increase the potential for an explosion of support tickets.

Utilizing this strategy can also help your conversion rate, in that it builds additional awareness to your subscription offering. Even if the customer ultimately toggles to a one-time purchase, they still have an active awareness of the option to subscribe if they choose to at a later date.

Illustrate the value of your subscription offering

Subscriptions can provide tremendous value to customers who take advantage of them. Whether that’s in the form of convenience, discounted pricing, early access to new products, or exclusive membership opportunities, the value to a subscriber is unmatched when compared to their counterparts. 

The value you provide to your subscribers also cultivates loyalty. You’ve invested in a long-term relationship with your customers and in doing so, are creating a two-way line of communication and engagement. 

Implementing a loyalty program can also formalize that relationship by providing incentives for subscribers based on the actions they take. Perhaps it’s as easy as awarding subscribers more points per purchase than one-time purchasers, or a special gift or discount after so many renewals. Whatever way you choose to structure your loyalty program, it’s imperative that you make it social and attractive for those taking part.

Include subscription messaging in your marketing efforts

In any marketing campaign capacity, your conversion rate can very quickly help you measure the impact of your messaging and allow you to pivot as necessary to create verbiage that really speaks to your target audience. When marketing your offerings, be sure to include language that directly highlights the option to subscribe.

This can be paired with general messaging about your brand and products, or it can be a standalone message with a highly targeted group—perhaps those who have abandoned their carts. 

Make your subscribe option prominent on your website

Have you ever been to a website and browsed around later to discover there were options you didn’t even know existed? A challenge many brands face is how to get everything they want to say in a prominent place on their website without overwhelming their customers.

Instead of taking up valuable space on the homepage with subscription messaging, try including it in the navigation as a separate pathway from a one-time purchase flow. A great way to try this is via a quiz or questionnaire. Not only are you able to provide personalized recommendations for customers based on their answers, but you can also highlight the convenience and value of subscribing. 

Retarget abandoned cart users with offers

Using technology to your advantage to meet customers where they are can greatly increase your conversion rate when it comes to obtaining new subscribers. 

When customers build their first subscription box with you or add it to their cart but don’t cross over to the final purchase phase, you can use their information to send them highly-targeted and specific messaging to entice them to return. Perhaps it’s in the form of a discount for their first box—though we recommend using this sparingly as after that trial period is over, they are more likely to cancel. You can also offer a gift product or samples to include in their order if they return to help give them a little extra incentive. 

Whatever value-add you provide, it’s also important to reiterate the FAQs of subscribing with you in that abandoned cart messaging. What are the 2—3 key wins a customer would see if they subscribed with you, and what is your return and cancellation policy? Outlining those up-front can remove any last-minute doubt and push them to try it out.

Converting subscribers is a multi-faceted approach

Just as there’s no magic wand to make your business successful, there’s not a one-size-fits-all approach to converting one-time purchasers to subscribers. Utilizing these tactics along with others that are unique to your brand and vertical can allow you to set yourself apart from your competitors and start bringing in recurring revenue.

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