4 Questions That Predict Your Subscription Success
The subscription trend has swelled to a massive wave.
Since 2015, subscription sectors of the economy have grown by over 300%. By 2021, over 68% of U.S. adults used a subscription service for at least one household item.
Of course, this trend isn’t without reason. Not only do subscription services offer more unique and immediate opportunities to customers, but they also increase purchases overall for almost any organization.
This isn’t to say that just anyone can ride this wave to success. Churn rates are an unavoidable reality for any subscription, and the feverish demand for the right subscription service can sometimes be too much to handle for certain organizations. However, for those entrepreneurs that can methodically find the right products at the right price for the right audience, these opportunities can mean sustainable growth and a highly-engaged fanbase.
So, how can you predict such success? After years as a leader in the subscription box industry, these are my four tried-and-true questions that indicate whether or not your subscription service is tapping into its greatest potential.
1. Are you niche enough?
A revolving collection of rubber stamps. A recurring gift of unique items before each new moon. A moss of the month club. A museum exhibit shrunk down inside a box. That’s just a small sample of how highly targeted a successful subscription can be.
As the consumer world gets bigger, it also becomes more specialized. An explosion in choice and competition means two things: (1) it’s easier than ever for customers to find what they want, and (2) customers are demanding more personalization to their purchases. Did you know that over 70% of customers now expect some level of customization to a product or service? After all, why buy a simple “Kiss the Cook” apron when you can order one with your full name, preferred color, and customized cooking quote from your favorite grandmother?
One successful example of such specific targeting comes from Amanda Stucky, who now produces highly coveted, subscription-based stickers and accessories for Hobonichi planners. As a planner enthusiast, Amanda wanted to do a lot more than just add one more organizational option to an already booming market. She wanted to design something that was uniquely hers, highly engaging, and EXACTLY what her audience was dreaming when they imagined creating and customizing their ideal planner.
For Amanda, the choice was Hobonichi. After spending some time connected to a passionate group of Hobonichi enthusiasts, Amanda started creating her own Hobonichi stickers with a simple hobby knife and a whole lot of patience. Before long, Amanda had created her very own version of the Hobonichi style, and she had an excellent feel for what her fellow enthusiasts wanted when designing their own planners. This is what I call “riches in the niches,” which is when an aspiring entrepreneur figures out exactly how to serve a specialized group of consumers. Amanda was able to build an audience of 600 followers, 100 of which have been subscribers to her MLP box from launch, just off of creating stickers for a certain kind of life planner! Not every ideal customer can be so easily defined by a pre-existing group, but when such an opportunity exists, the results can be powerful.
2. Is your product curation comprehensive?
Product curation is about a lot more than what looks good and what feels exciting. Your product list needs to get your customers excited, but it also needs to make these selections based on three critical considerations: price, profit margin, and perceived value. If just one of these values is out of whack, it can stop your subscription service dead in its tracks.
Is your price just right for your audience? Are your profit margins sustainable in the long term? Is someone going to look at this box and FEEL the value of their membership? Your subscription box has to be MORE than the sum of its parts — MORE than a collection of great products. Your subscription box needs to generate excitement, but it also needs to answer YES to each of these questions to achieve the sort of success that can help grow your business.
Over 20% of subscription services fail each year to increase customer retention, and product curation is one place where most businesses have room to grow. Finding a product list to satisfy price, profit, and perceived value each month can be daunting. But don’t back down. Your ability to create these lists is what made you the CEO in the first place.
If you need to see this sort of curation in action, look no further than Jonica Thompson of Jonica’s Bakery. The waitlist for Jonica’s subscription is probably growing as you read this, but curating items and vendors to strike the right balance wasn’t an easy task. Product curation is difficult enough, but when those products are perishable and need to arrive fresh and unspoiled, the matter becomes even more complex.
Jonica knew curation and logistics were critical to her success, so she went through a series of tester boxes and shipment methods before even setting her sights on a launch. After incorporating user feedback and documenting the success of different shipping techniques, Jonica finally arrived at the subscription service that she provides today. When you carefully curate your products and vendors, your initial audience will quickly become your very first subscription ambassadors.
3. Do you go “ALL IN” for every launch?
Super Bowl LVIII was the most watched program in U.S. television history. The game averaged over 123.4 million viewers, surpassing even the peak of last year’s Super Bowl by almost 10 million. These numbers say nothing of the countless memes and non-stop speculation train that was created by the buildup to the 49ers, the Chiefs, Usher, and Taylor Swift. If nothing else, Super Bowl 2024 reminds us that hype is immensely powerful.
Everything about a subscription box is engineered for excitement. The mystery. The waiting. The arrival. The reveal. Each part of the journey can be so exciting, but perhaps none more powerful than your initial launch. This is your opportunity to make big waves and ride those waves to greater success in the future. This isn’t the time to be bashful. This is the time to go ALL IN and showcase your subscription with all the hype and fervor of the Super Bowl.
Redheaded Camel was already producing beautiful hand-lettered items and original artwork when the CEO, Sarah Cummings, decided to design her own subscription. After a soft launch, Sarah’s subscriptions were struggling to gain traction, which was surprising since everything else about the subscription seemed executed to perfection. Sarah knew what her audience wanted — monthly single-print T-shirts and unique door hangers — and she had curated her selections with precision.
But buildup is everything, and a soft launch wasn’t doing justice to Sarah’s efforts. Once she committed completely, with live online engagement and more active outreach across the board, her subscriptions sold out and generated waitlists in no time.
4. Are you prepared to grow?
The Stanley drinkware company was never “small,” but the 2020s thus far have completely redefined their bottom line. Thanks in large part to a TikTok trend, the company’s annual sales went from $70 million in 2020 to $750 million by 2023.
When everything falls into place, a subscription success box can grow beyond your initial expectations in the blink of an eye. Trend can accomplish almost anything in 2024. But beyond that, a perfectly calibrated subscription box with the right audience and the right price is a force unto itself. Are you willing to hire extra help? Can you source your products to scale? Are you prepared to find new leaders to grow and manage different aspects of your business?
A tidal wave of demand can be a blessing for those ready to ride the waves, but it can be a curse for those who aren’t able to handle the torrent. If you want to prepare your subscription box to seize every opportunity, you need to adopt a “CEO” mindset. You need to think about the bigger picture, consider your long-term growth options, and be prepared to imagine a world beyond the subscription itself. Are there other products or services to satisfy the rising demand for your brand? How can you engage with a growing waitlist and keep them interested?
I saw this mindset metamorphosis firsthand when working with Nicole Jenney of GPigBox. When Nicole’s subscription box for guinea pig owners quickly catapulted to 500 subscribers in just four months, she didn’t miss a beat. By embracing her new role as CEO, Nicole built a right-size team to handle the workload, maintained excellent customer service despite the increase in demand, and sustained constant communication with her ever-growing waitlist. By the end of her first year, Nicole had won a coveted industry award and created a thriving fanbase for future projects.About Sarah:
Sarah Williams, The Subscription Box Queen, is a dynamic entrepreneur, coach, and bestselling author. With a passion for subscription boxes, she guides businesses to profitable heights. Her book, “One Box at a Time,” published by Hay House, distills her proven strategies. Join her community at LaunchYourBox.com.