2023 is the year you can break out and achieve massive success in your Subscription Box Business.
The main thing you need to understand, though, is that the game has completely changed compared to how things were a couple of years back.
In the past, it was much easier to get traction in your business.
The economic situation was completely different; the average consumer wasn’t as price-sensitive and savvy, and online advertising wasn’t near as difficult as it is now.
There are a lot of big boxes and direct-to-consumer brands in general that are now under a lot of pressure. (some have already filed for bankruptcy)
This is all public knowledge, I am not naming any names, but if you search on google, you will be able to see this information.
This is not a gloom and doom post, but what I am saying is simply the truth.
Now the good news is that you can still have a lot of success, and you can still build a business that can completely change your life, but you need to be willing to adapt to the current climate.
In this post, I am going to break down five things that you need to start doing straight away so you set yourself up for massive success over the next 12 months.
· Do a full financial audit.
The first thing you need to do is to get your house in order. That means now is the perfect time to do a full financial audit of your business and cut everything that isn’t needed.
I would export all of your company’s bank transactions and then go through each of them one by one. I guarantee you probably have a number of bloated expenses that can be cut and wouldn’t make a difference to your business.
Over time you can end up signing up for a lot of unnecessary services, software and apps. Unless these are essential to the everyday running of your business, now is a good time to cancel them.
The same goes for unnecessary consultants, agencies, staff or VAs. You need to look into this deeply and work out who is making vital contributions to the success of your company and who isn’t.
Obviously, it isn’t nice ending relationships with people and letting them go. Still, sometimes in business, it’s necessary if you want to keep your company in the best health so you can push on and continue to succeed.
The goal of this exercise is to increase the overall profitability and efficiency of your business so you have more capital in your reserves encase you need it not only to survive but to thrive if some interesting opportunities come up.
· Do a full marketing audit.
One of the worst pieces of advice you will get is somebody telling you to cut all of your marketing activities. You need to keep marketing. Marketing drives customers. Customers drive revenue, and revenue is the lifeblood of your business.
Without a fresh batch of new customers signing up for your box on a consistent basis, you will eventually go out of business. As no matter how good your churn rate is, it will eventually catch up, and your MRR will start to retract.
Now the correct thing to do in times of economic uncertainty is to do a full marketing audit and cut everything that isn’t driving meaningful and profitable growth.
Yep, that means if you spend big money on marketing each month and some of the channels still aren’t performing after a lot of testing, it may be time to rethink your strategy.
My advice would be to double down on what actually is working and pull back on your testing budget for a bit.
You should still be testing new channels and looking for new opportunities to reach your ideal customers, but now isn’t the time to be aggressively spending while trying to figure out these channels.
Cut the budgets back until you have data to suggest you will get results, and only then should you start deploying a generous budget to that channel or campaign.
The exact same thing needs to be said about marketing activities that don’t cost you a lot of money but cost you a lot of time and don’t drive any meaningful results.
Time is your most valuable asset by far, and if you don’t respect it, you can end up wasting it, and you will never get it back.
E.g. you may have spent the last 12 months attending multiple in-person events trying to promote your box.
These events didn’t cost you a lot of money to attend, but they did cost you an enormous amount of time.
When you check the results of this marketing activity, you see it drove a total of 27 subscribers over a 12-month period.
This has not been a good use of your time, and you should cut back on this immediately.
You need to identify the marketing activities which drive real results, and your time should be spent on those.
(Also, nothing against in-person events; they can be useful sometimes for getting customers. I just used that as an example)
Again the purpose of this exercise is to increase the overall profitability and efficiency of your business so you are making more money and you are getting better results from the time you are dedicating to your marketing)
· Customer experience is critical.
Keeping your customers happy and providing a world-class customer experience was always extremely important, but these days you need to be placing a bigger emphasis on it than ever.
Your goal in 2023 is to build a subscriber base of raving fans who will continue to renew each month and buy any additional products you choose to sell.
You need to be doing everything in your power to wow your customers with every single interaction you have with them. You need to put a big effort into your customer service and resolve any issues that come up ASAP.
That means if a customer is genuine and gets in touch with an issue, you go all out to resolve that problem ASAP.
You don’t have them jumping through hoops and making things difficult, so they end up going crazy and leaving your business a bad review.
E.g. If a box gets lost in transport. You replace it and move on.
You need to be aware of the bigger picture and understand that in the majority of cases, it is best to resolve issues ASAP and move on.
Obviously, you need to use common sense and make sure nobody is abusing your good nature, but in most cases, they won’t be. Just sort the issue and move on.
There is no point getting into a back-and-forth with somebody that will leave you bad reviews and hit you with chargebacks. It drains your energy, drops morale in your company and does your business damage in the long run.
Customers are more price sensitive these days and a lot more careful about what they spend their money on. If there are loads of bad reviews about you online (even if they aren’t true) it will stop people from signing up for your box.
Another tip would be to reply to every single post across social media.
Every month in BusterBox we get a lot of customers posting pictures of their dogs and our boxes on Instagram and tagging us.
We have somebody that spends a considerable amount of time replying to all of these posts. Our customers love it, and it also helps with sales.
If somebody’s friend sees we have replied to them, they think wow, that’s crazy a company takes that much effort to write back. I must check them out.
They then come over to our page and start following us, and if they have a dog at some point in the future, there is a chance they will sign up for BusterBox.
Customer experience goes so much further than support tickets and social media interactions, though.
Your customer experience needs to stand out in every single aspect of your business, from your website design to your subscription management system and everything in between.
If you have a confusing website that doesn’t paint an accurate picture of what you’re doing, that is going to come back and haunt you when somebody signs up and receives a box which doesn’t match their expectations.
Likewise, if somebody signs up and then needs to skip a month, cancel or change frequency, and you are making that extra difficult, that will come back and haunt you in the future.
As I mentioned earlier, customer experience has always been important, but these days it is absolutely critical. People are a lot more careful now about how they spend their money, and if you aren’t standing out in everything you do, they won’t sign up, or they will cancel.
· You need more products to sell
I have spent the best part of 4 years telling Subscription Box owners they need more products to sell, and these days, it’s more important than ever. Listen, none of us has any control over ad prices. We can do our best to optimise and lower CAC, but sometimes, it’s going to be what it’s going to be.
What we do have control over, though, is our ability to generate more revenue by selling other products to our customers. I guarantee you have a percentage of customers who would be delighted to purchase more products from you if you gave them the opportunity to do so.
We need to be doing everything in our power to maximise the customer’s lifetime value, and a subscription box as the only product is not going to do that. You need to offer them other stuff.
You are in a fantastic position where you are gathering all this data on your niche, and you should have a very good idea of other products they are likely to want. So it’s just a case of putting these products in front of them either through an online store or through add to box.
(TIP. Add-to-box converts way higher than a stand-alone store)
You need to dedicate time over the next 12 months to building out a backend of products you know will convert well. When you sell more products, you generate more profit on a per-customer basis. This means your customers are worth a lot more to you than your competitor’s customers are to them.
This allows you to spend more to acquire a customer than your competitors and still be highly profitable. (Remember, the company that can afford to spend the most on a customer always wins)
We have been working on this in BusterBox for a long time, and we now have a number of products we offer that convert well.
Example: We recently acquired a pet portrait business to give us more products to offer on the back end.
· Be ready for opportunities.
Unfortunately, in times of economic uncertainty, some companies will struggle, and others will not make it. (It’s sad, but it is simply the truth) This means some opportunities may present themselves to you over the next 12 months.
· This could be bankrupt stock offered to you at a cut price.
· This could be a marketing opportunity offered to you at a cut price.
· This could be the opportunity to purchase a competitor at a cut price.
· This could be the opportunity to purchase a complementary business at a cut price.
If any of these opportunities come up, your business needs to be in a solid financial state to make the most of them. That’s why it is important to get ahead of everything and do what I said earlier in the article. You need to be placing a massive emphasis on profitability and banking as much money as possible in your bank account. So in 6 months, if a competitor approaches you with the offer to double your subscribers for a cut-price deal, you can seriously consider doing it.
Likewise, if a supplier reaches out and offers you the opportunity to purchase 6 months’ worth of stock for a cut-price deal (that would seriously boost your profits), You have the cash sitting there to consider doing it.
We are now navigating a completely different landscape, and as a business owner, you need to be prepared. There is still so much opportunity, and the companies that adapt will come out much stronger on the other side.
If you are in the early days of your Subscription Box journey or you are thinking of starting one, I would still go ahead. Some of the most famous companies were created in the middle of recessions. There are also a lot of advantages for you as well (E.G, Ad prices are certain to drop in the coming months as there will be less competition. It will also be easier to work with certain suppliers who will be glad of your business)
I still have a lot to say about this topic, and I will probably write another article about it as I don’t want this one to turn into a book.
I hope you found this article helpful. If you have any questions about marketing or subscription boxes in general, please let me know. Have a great day.