Setting the stage for Subscriptions
When you think of the term subscription do you think of a SaaS tool like Spotify, Netflix, or Headspace? Or a product like Ipsy, or your HelloFresh meal prep kit?
What do SaaS and subscription-based e-commerce models have in common? Both need to heavily focus on building a relationship to see successful long-term retention.
When reviewing industries, online D2C companies are often siloed into “e-commerce”, and online tech into “SaaS”, when in reality an online subscription has more similarities to a product subscription than not.
Commonalities
Monthly or Annual subscription payment plans
Discount in upgrading to annual
Referral incentives
Are these the three pillars to subscription success? Potentially, but let’s dive in a bit deeper. I want to unpack a couple of examples.
Typical SaaS subscriptions
TV subscriptions (Hayu or Netflix)
Graphic Design (Canva)
Meditation App (Headspace)
Music (Spotify)
Typical e-commerce subscriptions
A monthly facial membership (Fig Face)
A beauty box (Ipsy/Birchbox)
Flower subscription (the Wild Bunch)
Meal prep (Freshprep)
The difference between the categories is trading a fee for a service, vs. goods.
So what really makes these brands successful and how do they all use email to leverage building a relationship? It’s all about how their marketing can be used to build the relationship on behalf of the brand.
Saas Subscription & Memberships
Headspace
What?
A meditation mobile app geared towards offering user-guided meditation ranging from 3 minutes to an hour.
How much?
$69 USD annually.
Commitment?
Monthly, or annual.
How is email involved?
Retention, retention, retention! Headspace has a fantastic email program that includes:
Milestone moments for key areas in the user lifecycle (the screenshot below is a friend referral campaign after the recipient completes 30-days of meditation).
Frequent reporting on progress.
Both annual, and one-off (I received emails on my meditation performance both in the middle of the year, and at the end)
I personally think their email program is well done, with a perfect balance of activation, re-engagement, and touchpoints that definitely influence my
Grammarly
What?
A SaaS tool that actively checks your writing as you type (across online platforms, Google docs, and more). It comes in the form of a desktop app, web browser, and chrome extension.
They offer a freemium membership, but their paid model is worth it.
How much?
Starting at $12/month (their annual plan).
Commitment?
Monthly, quarterly, or annual payment plans.
How is email involved?
As a non-member, Grammarly will frequently send you upsell pieces advertising their benefits, and pricing options. Emails specific to the membership come from “Grammarly Premium”.
They give you tid-bits of data driven emails, advertising your tone and word-counts, but once you activate the premium plan you unlock a majority of features including the chrome extension.
As a converted member, I now receive weekly writing update emails that send from “Grammarly Insights” that clearly recognize my membership status, and are rich with data.
The differentiation in From Name, and how Grammarly caters to a member vs. non-member are very well defined via email.
They also change email copy based on inactivity. Geared towards reengagement.
What are the common themes of SaaS subscription marketing?
Use of first-party data (such as Grammarly’s word count)
Check-in’s during periods of inactivity
Acknowledgement of a paid account
E-commerce & D2C Subscriptions & Memberships
freshprep
A meal prep subscription company, freshprep is located in Vancouver, BC. They pride themselves on locally sourced ingredients and offer a variety of vegan, vegetarian, and meat-friendly meals.
What?
A weekly meal prep subscription (prepped ingredients + recipes), with the option to add on snacks, small prepared meals, and other ingredients.
How much?
Starting at $69.99 for 3-meals
Commitment?
Weekly, with the option to skip weeks.
How is email involved?
Mala the brand
This D2C candle brand based out of Vancouver, BC, can be found in retail stores across Canada and US.
However, they have also began to build a presence in the D2C subscription space. Offering a monthly Candle membership.
What?
A monthly subscription box.
How much?
$42/month
Commitment?
3, 6, or 12-month options
How is email involved?
Monthly upsell’s to non-members (me) advertising what’s included and the perks.
Formula Fig
Formula Fig is a e-commerce and D2C company with physical store locations in Vancouver, BC, and soon to be Toronto and LA.
They offer monthly facial memberships to guests.
What?
A monthly facial membership that includes 1-facial a month, product discounts, and local member perks to various small businesses residing in the same area.
How much?
Starting at $79 a month, with 3 higher-priced options,
Commitment?
6-months, with month to month after.
How is email involved?
Email is frequently used to retain members. With perks, check-ins throughout the 6-month period, and referral pieces meant to drive new traffic.
Plot & Good Pair Days
Wine clubs, although not immediately defined as a “subscription” have been taking the food industry by storm, and are well received by their buyers.
Plot wine, a winery located in British Columbia offers bi-annual wine subscription boxes. One release in the early summer, and a second in the fall. As a subscriber, you have the option to purchase the first and then re-opt into the fall with an early release to those that purchased the summer case.
Good Pair Days, an Australian brand offers a monthly subscription that includes 3-bottles of wine chosen for you based on a wine-pairing quiz. You can cancel at anytime.
Signup form to drive subscription.
Subscriptions and memberships don’t have to be reserved for your phone plan, a country club, or platforms like Netflix. DTC brands can use subscriptions & memberships to drive long-term customer retention, and keep LTV number up.
Common themes of D2C subscription brands:
Shorter time commitments (seems to be that you could purchase a one-off and cancel, but there are benefits in staying for longer.
Overall, subscriptions and memberships don’t have to be reserved for your phone plan, a country club, or platforms like Netflix. DTC brands can use subscriptions & memberships to drive long-term customer retention, and keep that LTV number up.