Subscription-Based Marketing

How Collecting Emails Expands Outreach Opportunities

The online marketplace continues to change the shape of the business landscape. One of the most significant elements is subscription services. While this certainly isn’t a new business model, a wider variety of businesses have embraced it.

This approach to business doesn’t just offer companies the chance to gain relatively predictable recurring income. Subscription services can also form a part of an effective marketing strategy. With some planning and consideration, your businesses in this field can make regular connections with their consumers by email in ways that aid retention, support upsells, and identify new prospects.

What Is Subscription Marketing?

The subscription business model has seen significant growth with the rise of the digital landscape. This approach essentially requires consumers to pay a recurring fee for physical products, streaming services, and software licenses, among others. Consumers often prefer this model due to its convenient nature. Businesses can benefit from this convenience and boost their long-term customer retention. There are relatively few types of companies that can’t offer some form of subscription service.

From a marketing perspective, subscription businesses tend to have a natural connection to effective consumer outreach. Customers often engage with brands with purely online methods, signing up via the website, which triggers further interactions. After all, part of the sign-up process involves consumers providing their email addresses. Not to mention that, as they’re receiving recurring services as part of their subscription, an occasional emailed piece of marketing isn’t an unusual, unexpected, or invasive element.

This forms the crux of subscription-based marketing. Your marketing department has the privilege of access to multiple inboxes as a result of consumers’ connections to your business. Companies in other industries end up investing quite a bit of money for this result, when in actuality, the result is already baked into a subscription business model.

That being said, you shouldn’t take advantage of this model and never interact with your customers. Enhance the already existing relationship. Bolster their engagement by introducing them to services, recommendations, and ideas. Leverage your relationship with them to reach other potential consumers.

How Can Different Models Be Most Effective?

Not all subscription services take the same shape. There are 5 different subscription models — each differs depending on the types of services or products being offered. This also means that each can have a varying level of efficacy for marketing teams. All of them provide opportunities, though, and you must understand which of the models can be most conducive to successful outreach and what forms of marketing they tend to support.

The subscription models and areas of efficacy are:

Freemium

Freemium subscriptions are most often associated with software services. Your company can attract a large number of emails in this model to use in your marketing because the product tends to be complementary. After all, there are few business owners or private consumers that won’t consider signing up to a free service with great features. You might then gear your marketing toward upselling if your company offers different product tiers. If there’s an open-source element, you might find it more impactful to direct your emails toward community engagement and encouraging consumers to share product information among peers.

Fixed usage

Fixed-usage subscription plans are a more simple approach. Consumers gain limited access to a product or service for a single price. This doesn’t offer much scope for upselling marketing, because there are no other tiers. However, you may find email outreach related to encouraging loyalty to be impactful. For instance, providing your customers with continued value through good content keeps them attached to your services. Regularly introduce them to new ways to use the product so they recognize the advantages of recurring membership

Unlimited usage

Unlimited usage subscriptions only offer one plan to each user, but from there, each user has unrestricted access to the service. This can be a difficult model to market for, as consumers already have free rein over their use of your products. Again, your focus here should be emphasizing the value of your product to keep consumers attached to it. If you provide business software, show your users how their unlimited access to features can make them more agile. As a streaming service provider, you might reach out occasionally to introduce them to elements of the service they might not have explored. By repeatedly focusing on the best aspects of your service, subscribers may also be more likely to discuss this with other potential subscribers.

Per-user

Per-user subscription models have consumers pay a price depending on how many people use the product. If you run a software company, particularly operating in business-to-business (B2B) landscapes, this is the approach you’re most likely to use. As a result, your outreach can be most effective when you use it to show how your product can improve business efficiency. After all, consumers will want to connect with you on a recurring basis because you help them meet their business goals. Your email marketing could also offer price breaks on higher numbers of users and trials for innovative features.

Pay-as-you-go

Pay-as-you-go (PAYG) subscription models involve adjusting pricing depending on how much of the service consumers use in a period. This gives users a significant amount of flexibility and freedom. Therefore, you have the opportunity to provide value to subscribers by emailing them with practical advice. Show customers how to strategize their usage of the service by switching out different options depending on their budget, projects, and schedules. You can also find new subscribers by showing current consumers how they can interact with friends and family through your services. Showcasing your product as part of a positive community experience in your email marketing may entice them to recommend your company to others.

What Are the Challenges?

No matter what model you end up using, subscription-based marketing isn’t a magic system that results in immediate success. As with any form of outreach, certain challenges need to be addressed to ensure success. Gaining an awareness of these can help your business’ marketing team make more informed choices in relation to their emails.

Some of the key challenges of subscription-based marketing include:

Retention and churn

Your subscription business is almost guaranteed to experience a certain amount of churn. The average churn rate for subscription models is around 5-7%. It’s important to address this challenge by establishing email marketing methods to prompt retention. You need to be able to ascertain what aspects of your business keep customers connected to your services so you can represent and leverage this in your outreach. This certainly isn’t an easy task.

Subscription fatigue

Subscription fatigue occurs when users are overwhelmed or exhausted by experiences related to recurring services. They may get tired of all the subscriptions they currently have,, the prices involved, and even their issues with the subscription industry itself. The challenge of marketing is not just addressing these components, but also mitigating the potential for consumers to experience subscription fatigue from the number of outreach emails they receive, too.

Effective communication

Email marketing is, in essence, a form of communication with subscribers. Unfortunately, the biggest challenge is modifying it in ways that ensure customer engagement and appreciation.  It’s important to establish strategies that prioritize the clarity of your messaging. You should also provide various types of communication to make your outreach more enjoyable and accessible for subscribers.

Evolving needs

Customers’ needs tend to change over time. As a result, your services will also change to effectively address their evolving needs. Part of the challenge will certainly include reaching out by email to demonstrate that your product continues to be relevant. You will also need to understand how changes in trends related to marketing can also alter what your subscribers find engaging about your outreach.

Competition

One of the key challenges related to your marketing strategy is safeguarding against consumers moving to a shiny new subscription. Your approach may need to involve emphasizing how your product is superior and even highlighting the benefits and conveniences associated with sticking with the current service. Importantly, you’ll need to raise awareness of your brand’s uniqueness in the field.

How Should You Use the Product?

Subscription-based marketing can be effective when your company utilizes the product as a driving force of email outreach. Simply sending out advertising copy or a company update may not be the most engaging approach. Rather, you should establish content that focuses on the services users subscribe to. Being specific offers you opportunities to perform more relevant outreach.

You can begin this by segmenting your consumers based on data that illustrates the products they buy and how they use them. Understand what each of your groups likes about the subscription and what challenges they run into. You can design your email outreach to emphasize the strengths of your services and offer relevant information that may address any further difficulties.

You can also use this information for product upselling emails. Emphasize how their current experiences can be practically improved by upgrading to a new tier or adopting an additional feature. This can be particularly impactful if your email is coupled with a free trial of the service. In effect, you’re allowing users to gain tangible experiences of your service rather than simply rely on the claims in your emails.

How Should You Use Content?

In the digital marketing world, content continues to be king. This is certainly relevant to email marketing for subscription services. After all, content gives your company another opportunity to extend the value you’re providing to your customers. By offering more quality information to your subscribers, it is likely to result in a greater impact on your retention, your product-led growth (PLG), and new customer onboarding.

High-quality content creation requires a solid strategy and the informed use of effective tools. After all, the platforms and content types that are effective in subscription campaigns may not be the same as in other fields. Take the time to identify the content categories relevant to your email outreach and your type of subscription products. Select formats that can easily be adopted for your outreach, such as embedded social media posts, video or podcast links, and blog text.

Consider how creating a selection of assets in advance can help you personalize emails with the most relevant content types. You can create content calendars and schedules for your website or social media content. However, for email, a solid collection of different content allows you to be more agile.

Remember you can always leverage content to provide value to your consumers. Tutorial videos can introduce new or more efficient ways customers can use your service or product. You can also publish podcast interviews related to your field — which can not only be interesting to listen to for customers but can emphasize your brand’s expertise.

Don’t overlook the importance of embedding these pieces of content, either. This technique enables consumers to share your assets via social media channels or email. It’s a simple design choice and one that can see more current subscribers passing your materials on to their friends, family, or industry colleagues. As a result, you’re extending the value your content provides, which may prompt new subscriptions.

Where Do Loyalty Programs Fit In?

In addition to the value provided by the above-mentioned content, you can also extend the value of your emails by including elements of your loyalty program. This can be an effective way to improve how consumers engage with your products, provide the potential for upselling, and influence retention. This is also a good way to stand out from your industry competition by offering your long-term users more for their money than they’d obtain from other businesses.

Consumer data is key to any loyalty program. It allows you to make more relevant offers and rewards to loyal consumers, rather than just generalized discounts. Utilize their customer interaction data and email them exclusive deals that improve their customer experience. This could be in the form of a limited-time bump-up of their tier. Alternatively, if you’re using a points-based system, use data about their prior activities to email them with relevant products or features.

It’s important not to overlook referrals as a part of your email outreach related to loyalty, too. Consider contacting subscribers at regular intervals to alert them to your referral program. This may involve rewards per number of new sign-ups your customers generate. This can not only improve the retention of current subscribers but also expand your outreach opportunities further.

Conclusion

Subscription-based marketing offers your company a range of ways to engage more meaningfully with consumers. Each subscription model has different points of efficacy alongside a raft of challenges. These aren’t insurmountable and you can usually address them with strategic planning and relevant content choices.

Many of the elements we’ve outlined focus on how you can interact with subscribers to maintain your business now. But it’s also important to consider how the subscription industry is likely to develop in the future.

Many companies are seeing consumers drop subscriptions due to difficult economic periods, which may require you to send discount codes at more regular intervals. Technology changes, too. So, will customers prefer more interactive outreach, perhaps involving you embedding chatbots in your emails? Alongside implementing your current subscription marketing strategy, take the time to keep an eye on what’s coming down the track and make early adjustments.

By Indiana Lee, BOSS contributor