There’s no question that strategic promotions and discounts motivate consumers to buy a product. But they can also open the door to a long-term relationship through subscriptions. According to our recent survey, more than a quarter (26%) of respondents said that discounts motivated their decision to enroll in a subscription experience.
But which promotions should you use to attract subscribers? There are three main types of promotional offerings. Not only do they drive subscriber acquisition, they can also mitigate subscriber churn and boost average order value.
Enrollment Incentives to Convert Customers into Subscribers
Enrollment incentives help brands reach customers that might be hesitant to try a product, brand or subscription by delivering extra value. There are numerous types of enrollment incentives, but the most common are discounts, free shipping and a gift with purchase. Subscribers should receive these incentives on each order they receive, not just the first one.
Our data shows that offering a 5% discount with a subscription increases enrollment by 104%, while offering a gift with purchase can increase subscription enrollment by as much as 130%. Free shipping is a table-stakes incentive; 85% of shoppers say that not having free shipping for online orders is a “deal-breaker.” The good news is that while free shipping can be expensive, implementing a free shipping threshold tends to increase average order value.
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It’s important to note that the type of enrollment incentive that is offered should fit into the context of your brand’s broader promotional strategy. For instance, many beauty brands offer a gift with purchase as a way for a customer to try a product that is new to them. Data backs this up as well: A study from the global professional services firm Alvarez & Marsal found that 44% of consumers tried a new beauty brand because of promotions and/or discounts last year, up from 25% in 2020. Understanding the ways consumers are motivated by promotions can help you determine how to best market and offer discounts.
Subscribe More, Save More to Increase Share of Customer Wallet
Subscribe more, save more promotions are discounts applied to recurring subscription orders, with the discount increasing alongside the number of subscriptions or products a consumer subscribes too. As a result, consumers save money when they subscribe to multiple products. For instance, if a customer is subscribed to three supplements, then a 10% discount is applied to the entire order. If the customer is subscribed to five products, then they might receive a 20% discount. The subscribe more, save more strategy fosters long-term loyalty with customers as the brand continues to provide ongoing value.
Because retail giants like Amazon offer these types of promotions, it’s critical that brands offer their own version. However, as previously mentioned, it must fit into the context of your brand’s broader promotional strategy. The subscribe more, save more offering must be at a competitive price point and give consumers an incentive to remain a loyal subscriber. For brands, these orders will lead to increased average order value and increase margins.
Retention Rewards to Foster Loyalty
In a similar vein, retention promotions are meant to reward loyal customers. However, they are less frequent than ongoing subscribe more, save more discounts. For example, making a dedicated subscription purchase free, such as every fifth order. Frequently providing subscribers discounts on their recurring orders offers a surprise-and-delight experience that simultaneously reminds consumers of the benefits of having a subscription.
Another way to reward retention through promotions is a points-based rewards program, where consumers earn points for every purchase. From there, consumers can use points to redeem a free order, gift with purchase or an increased discount. Letting members choose whether their points are applied to new purchases or existing subscription orders can make the program feel more personalized. When promotions are tied to subscriptions as a reward for retention, consumers are likely to stay with a brand long-term. Our data shows that these offers increase subscriber retention by as much as 10%.
Pair Promotions and Subscriptions to Ensure Lasting Consumer Relationships
In any case, “spray and pray” promotions aren’t the most effective strategy as they don’t foster long-term commitment and customer lifetime value. Between enrollment, subscribe more, save more and rewards, brands must choose promotions that make sense for their overall strategy. While discounts are the most common type of promotion, that doesn’t mean they can’t be creative or match a brand’s personality and core offerings.
Promotions make the subscription experience stand out, especially as the market remains highly competitive. As a result, brands will be able to attract new enrollment while also fostering long-term loyalty.
Casey Burt is Director of Customer Success at Ordergroove — a leader in Relationship Commerce. With more than 15 years of ecommerce and subscription experience, Burt is passionate about developing world-class subscriber and customer experiences that help turn one-time transactions into long-lasting relationships. His team partners with and guides Ordergroove’s largest strategic clients, such as PetSmart, GNC and L’Oréal, to ensure they implement successful subscription strategies. When he’s not helping brands reach new levels of subscription success, Burt is taking care of his new child or trying to add a mile to his long-distance running record.
