25 Jul Pros & Cons of Selling Food & Drink Subscriptions Online
Are you unsure whether selling a subscription service is right for your food or drinks business? Then you’re in the right place.
The rise of subscriptions has been very noticeable in the food and drink industry of recent years.
But there’s more to selling subscription packages than meets the eye.
Yes, it’s a superb way of ‘locking in’ your customers so that they don’t go anywhere else.
It’s can be a helpful budgeting mechanism.
But there are times where a subscription offering might not be perfect and could actually hurt your business growth more than doing it good.
So, in this article, we are asking questions such as:
- Are subscription packages always beneficial?
- When is a good time to invest in subscription selling?
After reading, you will know whether (and hopefully when) the subscription implementation tasks need to be added in your digital marketing plans.
Imagine you are setting up a brand new website selling your much loved food or drink product(s) online.
In order to answer the above questions, you need to answer a few questions about your business first.
Here they are.
Questions to ask yourself about selling subscriptions
1. Does your website have any traffic to generate new subscriptions?
If the answer is ‘no’ then you should ask yourself whether you should put your time, effort and budgets into marketing instead of some superb subscription development functionality – that no one knows about.
Why not get a simple website setup and get your brand ‘out there’.
If you do have traffic, how will it affect your customers actions? Here’s how
2. Will selling subscription packages reduce people coming back to my website?
This is best explained using an example. Let’s say your website generates just 5,000 visits per month. You really want to focus on bringing those visitors back to your website.
Because creating return visitors shows Google and other search engines that your website is popular and trustworthy.
It also means people will type your brand name into the search engines to come back to you – another ranking factor that increases trust and therefore traffic.
If you get people to sign up to your subscription – GREAT!
But the chances are. you won’t get the all-important repeat traffic and you won’t get people who know your brand typing it into Google.
3. Will my product do well as a manual repeat purchase?
Most products work without subscriptions. So, be sure to ask yourself – will people actively look to buy my product again even if they can sit on the sofa and wait for it to be delivered.
4. Am I running purely a subscription-based business model?
If the answer to this is ‘YES’, you don’t need to read on – subscriptions are of course a necessity.
But. If you still haven’t decided on your actual business model, keep reading.
5. When is a good time to invest in subscription selling?
I’m going to put my hand in the fire and say a target of 10,000 visits per month with 30% of those returning visits is an acceptable level to introduce subscription selling.
That’s not true for all businesses though and I’m sure you will make the right decision for you.
6. Do your delivery costs eat directly into profits?
Delivery costs are one of the biggest losses of supplying a subscription service. If you don’t feel you can add delivery costs onto the price for the customer, then selling subscriptions might not be right for you. Particularly in terms of bottom line profits
Okay, so you want to skip subscriptions for the short term and focus on getting your brand ‘out there’. You might need Online Growth Guru’s help – get in touch if that’s the case.
On the other hand, you are happy that subscription selling is definitely the way to go NOW!
You might think – if I have subscriptions on my website, people will flock to buy – not true.
You might also think that once people have signed up, they are with us for the year or more – again, probably not true.
Here are a few tips on how to attract people to your subscription package and then keep them on board.
How to sell subscriptions
Send an email
Hopefully you have a segmented database with a few thousand (opted-in) email addresses. And you know who your most loyal customers are.
Start by sending those people an email. Tell them your subscription service is up and running.
Tell them it’s the best thing since sliced bread
HINT: Make it an email on its own – don’t embed this news into your monthly ‘Newsletter’ which has a hundred other stories in it too.
Plaster it on your site
Assuming you’re not using one of those Shopify templates that all look the same – and therefore you are able to customise how your site looks.
You should really go that extra mile to push the benefits of your subscription packages.
Have a unique page on your website and call it – for example, coffee subscriptions. That way, anyone searching this in Google has a nother chance of finding your website.
Write an FAQ Article
Answer key questions that POTENTIAL customers might have and write the answers in an article on your blog.
The main point here is that this page is not just a page for your current site visitors. It’s also one that ATTRACTS new site visitors.
Those who are already thinking about getting a subscription for the product you are offering.
How to keep subscription Customers
Keeping customers on your subscription package while bringing them back to read your website could determine success or failure.
Here’s a couple of ways you can reduce churn rate (the rate in which people leave).
In my experience, the best way to keep your customers is by educating them on the product they are buying (or subscribed to).
Benefits are often forgotten when they turn into EXPECTATIONS.
Therefore, regular communication with your subscribers, on how they can make the most of their purchases, is the of the utmost importance.
Don’t just leave them to it and think they will stay with you.
Try throwing in a small delighter. Something that the customer doesn’t expect.
If you know people cancel during month 6, then put it in month 4 or 5. That way they might stick around for longer.
All these above tasks will take time, effort and/or money, which leads me on nicely.
Remember, there’s going to be cost implications when setting up subscriptions.
It therefore becomes a question of budget and return on investment.
Cost Implications of Subscription Selling
Once you have a feel for how impactful each of the above actions will be, you can start to budget what your future return on investment.
Your monthly calculation might look like this
(Current customers + (New Customers – Lost Customers)) * Average Monthly spend =TOTAL Revenue
If you want to work out when you will break even, you need to deduct your product costs, delivery costs and your up-front investment from your total sales.
TOTAL Revenue – Product costs – Delivery Costs – Upfront Costs