How to grow a subscription box business

This is the follow-on guide guide we’ve written that covers how to start your own successful subscription box business..

In this guide we go through the 5 remaining steps post launch that will allow you to grow your subscription box business empire.

Are you a Reader or a Doer?

Talking and reading about starting your own business is different to doing. 

For all the ‘doers’ out there – rock on! You can start designing your very own subscription website for free right now using our drag and drop website builder. 

Upload a product, connect a payment system, and you’re away in minutes. 

Thousands of successful businesses have done just that. Watch how easy it is in the video below.

If you’re not ready to take the first step, keep reading below. 

Step 8: Marketing & Growth – Expanding Your Community

How do I get more subscribers?

It’s time to grow baby! It’s marketing time.

Marketing is a massive component of growth and you will be focusing on this throughout your business lifetime. Always be marketing, but you can work on a more intricate plan once Chapter 7,8, and 9 are all happening!

Some Marketing Ideas

1. The best places to market: depending on what your customer persona is, you’ll be looking at different places to market your business. Nonetheless, there are places that everyone goes, such as Facebook Ads, Twitter Ads, Google Adwords, and Instagram and Pinterest.
2. Test Ads: Take a small budget and start with a targeted ad to test out whether it draws customers. At this point, you are dipping your toes in the water so don’t shut down if it doesn’t work the first time! Keep trying in order to find the exact ad and the exact target that you are satisfied with.
3. Influencer marketing: This is the new age way of marketing and it has exploded! Reach out to big influencers in either your market of choice or someone that you recognize people trust and ask they to advertise your box on their page. That means that you’ll not only have their followers looking at what you have to offer, but you will also have an endorsement from someone who is validated on the internet and can be used as leverage in other marketing!
4. Referral Campaigns: It’s all about friends here. Create a refer-a-friend campaign and give people incentives to introduce others to your box. Maybe for every 3 people they tell and get to sign up, you’ll give them a free month? Could be anything you think would make it worth their while to tell people!

Talk isn’t cheap when it comes to marketing…

Word of mouth is probably the gold standard that you are hoping to reach when you market your subscription box. Statistics show that over 80% of consumers fully trust or somewhat trust what family, friends, or colleagues say about a product! You can tap into this by reaching out to everyone you know and sending them a box or even a promo code to give to people they believe would be interested in your business. Better still, you can leverage a refer-a-friend campaign to maximise this effect.

Extensive Topic

There really is so much more to talk about when it comes to marketing, but we cannot stress this enough: it is one of, if not the most important thing you can do to grow your business!

Marketing is a full time job.

Eat, pray… oh wait, wrong motto. But you know what I mean. Do it all day, errday.

Further Reading on Marketing

Read more and learn how to grow your subscription box to 1,000 subscribers. Additionally check out our 12 tips on subscription box marketing success.

Step 9: The Assembly Line – Shipping & Fulfilling Orders

How do I streamline and save money?

At this point you’re past the “how to start a subscription box business” stage. You’re running and sending out shipments, and working to streamline your process so you can focus on marketing all the live long day! Because having everything automated means that you have the space, time, and peace of mind to grow.

Depending on the size of your business and what you’ve got going on, there are two main ways of attacking this very important component of your business.

Remember: this is how and when your customers get their box! The more you’ve got it figured out, the happier they’ll be and the more likely you’ll keep them long term and have them telling all their friends about you!

What are your options?

Do It Yourself

When you start as a small subscription business, doing it yourself is the most efficient and cost effective way to go (until it’s not… but more about that in a bit). Going with this option means that you need to be prepared from start to ship. This means that you need to go through these steps:

1. Pick and package your items – This is hopefully already planned out by now and you know what items you are sending with what print materials and what confetti (optional, but I love it!). If not, then take the time to pick out the products that are going into this upcoming box and put it all together.
2. Shipping logistics – You’ll need to have the boxes ready and sealed in a way that is fit to ship. Also you need shipping labels, and hopefully tracking numbers in order to keep your customers posted if something is on its way. This is the kind of stuff you can do at home. Get a label printer and keep your customer information organized on a spreadsheet so you can mark it off as shipped once you send it. Get acquainted with Excel… it’ll become your best friend! And so will highlighters 🙂

Outsource It

As you grow you’ll quickly realize that packaging boxes in your garage and printing labels from your desktop at home may not cut it. You’ve got way too many orders and keeping the products organized and getting it all shipped just isn’t working. How many trips to the post office can a person take in one day!? Also, the trunk of your car is nothing close to a Uhaul…

This is the point when you need a professional who can help you navigate the fulfilment seas (yes, look at me with all my metaphors).

Outsourcing Options:

1. Research fulfilment companies – Also known as 3PL (third party logistics) there are many options out there, but as you’re growing into the hundreds or thousands of subscribers, we advise it’s best to find a company that you trust and can ship to your common destinations quickly, reliably and affordably, that may be able to satisfy your needs. What do these fulfilment companies do?

1. Hold your inventory in a warehouse so it’s not in your garage
2. Have the boxes sent to them so they can package your items
3. Keep track of what is sent and what is still waiting to be fulfilled
4. Ship out the box
5. Keep you (and even your customer) updated
6. Give them the relevant information – Unfortunately, there is no company that reads your mind, just yet, we’re working on it. Giving up the reigns to picking, packaging, and shipping does not mean that the customer experience should be diluted! Make sure to give the fulfilment company you pick exact directions for what goes into the box, how it should be packaged, the way the print materials (if any) should be ordered, and what type of shipping it should be sent out as.

As you grow even further, your concerns will change. In the full chapter (coming soon) we will discuss:

• Learn how to optimize your shipping and lower costs
• How to negotiate costs down with volume (Trust us, it’s possible!)
• Manage your customers’ expectations

Customer Updates

People want to stay posted because they are as excited to receive your box as you are to send it! Make sure to always keep your customers informed about when to expect their shipment and if there are any delays. They will appreciate your candor and trust you even more, which means…better customer lifetime value.

Step 10: Supporting Your Customers

I’ve got the world on a string… and 100 unread emails

You’ve got a lot going on at this point. With coordinating shipping, planning the next box, and trying to stay afloat with operational costs, the last thing you need is customers sending you emails with questions, comments, and the dreaded concerns.

First step: get a glass of wine in hand. Okay, now read on.

It is part of having a business so take a moment to be overwhelmed and then let’s get on with it! Here you can manage it in two ways:

1. Setup an email address: If you’re still growing on a smaller scale, you may be able to just create a support email address and have people send over anything and you can respond to it. But if it’s just Jane, Bill, and Sam, this may be manageable. However, if it’s them and an entire clan, then maybe not.
2. Implement a support platform: With more customers you might need some organizational tools that help with customer support. Programs like ZenDesk process customer support emails by organising them into tickets that can be assigned and tracked in once place. You can control what you say, whether the ticket has been resolved, or whether it is pending for more attention. This puts everyone in one place and makes high volume messages easier to manage.

Step 11: Collecting Feedback, Learning & Improving

Okay subscription gods, where to next?

Your happy customers are your brand ambassadors.

Like I said before, many aspects of your subscription business will change as you learn more about your customer base. Analytics will become extremely important in understanding what you’re doing that is keeping your customers on board, and what might need revamping!

Chances are you’re now getting consistent growth with your subscription business with a steady flow of new signups (if not, please refer to Chapter 6 on marketing), you’ve figured out the best way to put your box together and send it out, and you’re excited about growing!

The amazing part of having a subscription business is the stability it brings through its recurring monthly revenues. As long as you keep up the good work, you’ll be open for business… subscription business! (Don’t judge us for being way too excited)

Listen (read) to the data

Once you’re at this stage, it’s time to get down to the numbers. Understanding your business and where you may be having friction points or why people leave (cancel their subscription) will help you make your business better with healthier growth and increase customer lifetime value due to a lowered churn (the rate of cancellation).

Ahhhhh, so many technical terms in one sentence! Don’t panic, you’ll be speaking in this lingo soon enough and everyone around you will be like UH, we don’t get it.

Nothing is forever and everything changes, so the sooner you come to terms with this in business, the better.

Talk numbers to me

There are multiple online tools to help you track analytics for your subscription business and test out potential changes to see how they affect your business. Baremetrics and ChartMogul are two great analytics tools that show you everything from revenue, to churn, to what happens when you’ve implemented a new marketing campaign or changed a product and whether it has positively or negatively influenced the business.

Once you get this kind of information, what do you do with it? Iterate. Anything that isn’t working anymore, change it up and make it better. Anything that people want to see, try to make it happen.

Listen to your customers!

I could talk about this topic for a long time, but you must must, I repeat, must talk to your customers, especially when and if they cancel. You want to know exactly why they cancelled. This will allow you to collect the feedback and make informed decisions to improve your business. This will help you increase retention and the lifetime value of a customer. It will also lead to happier customers that stick around and…

Don’t worry it’s not all criticism here! You should also try to find out what the customers like about your subscription business. Knowing what they like might surprise you and allow you to emphasize these points that add value for the customer.

Bottom line is, you want to really understand your customers no matter if they stay or cancel. In fact, treat those loyal customers well and they’ll love you even more for it.

Step 12: Expanding & Scaling

Please sir, I’d like some more. MORE?!

Congratulations. You have put together a successful subscription business. Boxes are rolling out, money is coming in, customers are happy and getting their questions addressed and they can’t wait to tell their friends! Take a moment to have a 30 second dance party. I’ve had one in between each of these chapters.

Feeling good? Awesome. At this point, you’ll be really focused on marketing so check back into Chapter 6 to really get into the nitty gritty of it.

Optimize

This is the time to start optimizing your business processes (shipping, automated emails, automated ads, automated everything-you-can-possibly-automate) and keeping your operational margins and profit margins healthy.

Diversify

What else do businesses do at this point? Diversify. When companies do something and do something well, they may decide that it’s time to expand their offering. This doesn’t mean straying from your targeted niche, it just means finding new ways to give people what they want!

Case Study

Originally Birch Box (now there’s a team that know how to start a subscription box!) was centred around getting great skin care and makeup products to women who had a slight (understatement of the year..) obsession with all things beauty. How did they expand? They now cater to men who are interested in these items as well.

Some companies also add in one-time products. These products can be purchased as stand alone, non-recurring products, and they can be anything from something that is typically in a box, to something that would totally compliment the box items! (Think shaving cream for a razor blade subscription box).

We won’t overwhelm you with the details of this step here. You’ve just started for Pete’s sake!

And that’s it… It’s grow time… get it?

We’ve come to end of our guide on “how to start a subscription box business”. I am really glad you joined me, and I hope our journey and relationship doesn’t end here. If you’re serious about starting a subscription box, then I’m sure you have more questions, if so, then let’s talk. Feel free to tweet us.

If you have any questions or need any help starting your business, then please feel free to contact our friendly support team! We wish you the best of luck in starting your subscription box business.

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