The Subscription Playbook: 7 Plays to Cut Churn, Lift LTV, and Unlock Zero-CAC Revenue

Speaker A: Last year we launched something called Mystery Reward where customers do not necessarily know about a, ah, reward, um, unless they come on a portal.

Speaker B: Well, hello and welcome to another edition of the E Commerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG M Commerce. And today we're, we're talking about subscription revenue, how to increase it, how to reduce churn, how to extend the length of time that someone has subscribed with you. How do you even think about non traditional subscriptions? Maybe you're a business that you haven't thought about subscriptions. Maybe uh, you're outside of the uh, consumable space. You know, obviously for beauty, for supplements, for anything food and bev, subscriptions are a no brainer. Maybe you're outside of that, but subscriptions could still work for you. And so, so many good examples we're going to dive into today. And my guest is the CEO and founder of Loop Subscriptions. Piyush Jain is with me. And Loop is one of those services where so many of our clients, so many of the top D2C brands are using Loop subscriptions. And so with that, welcome to the show, Piyush. And how's it going?

Speaker A: Thanks, Brett. Uh, things are good. How are things with you?

Speaker B: Going good, man, it's going good. It's a crazy start to the year. Super busy. And um, yeah, hopefully, uh, barring any macroeconomic issues, I think this is going to be a great year for E Comm and our D2C friends. And so let's dive right in. Piyush, I love the topic of subscriptions. Anytime you can build a structure where going into the new month you already know, uh, to a pretty high degree of confidence, you've got this base level of revenue in the form of subscriptions, makes your business more valuable, more predictable, more profitable, all of those things. And so I want to start with something that you shared with me that I thought was fascinating. Um, and one of the best ways to improve your subscription business is to reduce churn. And so you talked about 70% of subscribers that visit the subscription portal or subscriber portal. They're going there to either 1 cancel or 2 skip. So 70% of people that log into their portal, it's with intention of let's either cancel or not get a subscription this month so you get revenue leakage happening right there. So uh, frame that just a little bit for us and then let's start to talk through what are some of the ways we can prevent that revenue leakage from happening.

Speaker A: Yeah, yeah. So there's um, you know, everyone, um, generally just keeps on talking about it that they don't want to send emails to the customers, um, because customers will cancel. Um, um, same thing about portal, uh, brands don't want customers to sort of log in into their portal, um, uh, because the probability of cancellation is higher. And that's actually we've looked at so much of data across different categories, supplements, beauty, pet, um, different, different catego categories. And uh, one of the consistent trends that we're seeing is um, customers who are going or who are visiting the portal are either going there, 70% of them are going with the intent uh, to either cancel, skip, um, reschedule, basically actions which are negative actions, revenue leakage actions. And um, when we looked at this data, um, I mean the first thing was that, you know, how do we make, what do we do to retain uh, those subscribers? Um, so we started with gamifying, um, subscriptions. Um, this is way back, like this is about two, three years back where um, what if brands could make their subscription interesting by offering reward on future orders, um, say high discount on third order, second order, fifth order or a gift, third things on those lines. And with that what we did was also started showing a banner on the customer portal and we saw that it leads it, it led to a really good um, reduction uh, in Churn, case in point is a brand called OCR Malibu. So they've been with us for about, they migrated to us about two years.

Speaker B: OC Malibu, that's a skincare brand, is that right?

Speaker A: Yeah, the skincare brand. Yeah. So they migrated to us about two years back and they migrated with about the Churn was a little over 10% and they don't do discounts. Uh, they're not a discount heavy brand. And but uh, we're able to figure out that their highest drop off is a third order. So one of the interesting things that they did was um, they did a gift, uh, of a travel pack, sample size, um, on the third order. And they started communicating this from the first order on the customer portal. So as soon as the customer goes on a portal the first thing that they see is this banner that hey, you're two orders away from getting this gift. When they go on a second order and they say, hey, you're just one order away from getting this gift. And this really helped. Uh, their churn sort of dropped by about 5%. Um, churn dropped by 50%. So their current churn is 5% now. Um, so this worked really amazing.

Speaker B: I want to talk about for just a little bit and then once you're going to continue on it. But so this is OC Malibu skincare brand, premium brand. They don't like to do discounts. We have several clients that are in that boat that don't like to do discounts. So instead they said, hey, as soon as you subscribe on the third month you get a free travel kit. Do you know what the retail value of that travel kit was? Piyush. Do you know it knew like what kind of value they attached to that?

Speaker A: Um, I wouldn't have idea on that. But uh, it'll be totally cool. Yeah, yeah. But of course it won't be as expensive as saving uh, a churn.

Speaker B: Like uh, right, for sure. And so let's just. And I mean I don't have this side in front of me, so I'm just going to totally make up prices. But like if say the subscription was uh, $100 a month, maybe that that travel kit had a retail value of 50. Well we all know like the cogs are going to be way, way less than that. This is uh, you know, the true hard cost to the brand, minimal perceived value to the customer, huge. But also doesn't cheapen the brand. And so I love that, that you're, you're framing it from the beginning. You're setting expectations, you're creating um, you know, kind of this, this desire and anticipation for that reward. And so basically what you're saying is their churn rate was 10%. This dropped it to 5. So essentially cut the churn in half, uh, or significant increase in the rate of retention. That's huge.

Speaker A: So when we saw that this started working and then a lot of our brands would have implemented this pretty easy to set up. Um, and then we thought that how can we make it better? Um, because in this case there is still that reward is just there. Um, so then we thought that how about we gamify even further and how do we get customer opt in onto this? So uh, last year we launched something called mystery reward where customers do not necessarily know about a reward, um, unless they come on a portal. And as soon as they come on a portal there's this thing which just pops up and it says hey Brett, you've got a mystery reward. And then customers clicks on claim reward and uh, we see that about 40% of the customers would end up claiming the reward and um, the churn rate sort of further goes down.

Speaker B: So maybe they. So let's make sure I understand this. So someone logs into the subscriber portal, maybe again they're there to skip, cancel, reschedule, whatever. They see this mystery reward and you can claim it. Are there stipulations there where you like it comes with your next subscription or something or you just get to claim it and keep it and the act of claiming it lowers churn. Um, talk about how that works.

Speaker A: Yeah, so the fundamental difference here is um, that in the earlier example, the earlier what we done was that everyone would get that reward irrespective of whether they're visiting on the portal or not. Essentially there was no opt in there. Uh, in this case this is for customers who are visiting portal where we know that uh, there's a high risk. Only for those customers there's this reward which pops up. It's like a pop up, like a full page, sort of a uh, you know, banner, uh, which with this gift, uh, you know, brand can design it however they want to and they're like um, we got a reward for you and then just customers just clicks on it. Uh, brands can choose to offer multiple different types of gifts and customers can select one. And uh, just this piece of opt in and this the work. The reason that it works beautifully is that it's not um, brand is not giving. Brands are not giving to everyone. It's only for those customers who are coming with a high intent to cancel or, or skip basically revenue leakage. And there's a customer opt in. So this is further sort of taking down churn by about 20, 30%. So this has been working really, really well. And of course all of this with the caviar that, you know, brands needs to have a customer portal which is easy for subscribers to manage subscription and so on and so forth. All of that's like basic but um, just the engagement with subscribers at the right time because this is like portal is the last place uh, of defense and doing it proactively before they hit cancel, um, it goes a long way in um, reducing the churn.

Speaker B: Yeah, I love this idea of gamification because it really speaks to human nature. Right. And it makes us want to do more. I think about the digital comparison is a lot of apps will talk about streaks, you know, streaks of you using this app and then what that means for you. Right. Like there are some of these, these brain games and learning apps that they try to get you to do that instead of scrolling social media. And so they'll talk about your streak or like the Bible app talks about your daily streak and like you don't want to break your streak and so it motivates you to Kind of get in there. Or the. I'm using Whisper Flow now which is kind of the, the voice.

Speaker A: Yeah.

Speaker B: To text app. And it like every now and then it's going to say hey, you've used this, your streak is you know, six weeks in a row or whatever. And it's this many words and like it just kind of frames it. You're like oh cool, I got to keep going. Right. And so uh, I think this is just sort of the product version, the DTC consumer version of that gamification. Um, what else are you seeing from brands in terms of gamifying subscriptions that you found to be really effective?

Speaker A: So funny you talk about streaks. Uh, we actually have a product which is called Streaks and the inspiration was Duolingo. And um.

Speaker B: Yeah, Duolingo. Yeah, that's another one. Yeah, yeah, yeah.

Speaker A: So um, in both of these example what, what earlier I shared, we are rewarding customer irrespective of consistency. But the biggest drop offs for brands would happen on their first three orders or first five orders. So then um, we thought that you know there should be some sort of a mechanism where we can also gamify this consistent behavior. So to solve for that uh, we sort of uh, built a module where if customers complete X orders in a row on speculated timeframe. So for example if it's a 30 day subscription. So if a customer completes their next order in 30 days, another order in next 30 days and so on and so forth, then they unlock special type of rewards. So four Sigmatic does it like really well where um, if customer coffee. Four Sigmatic is a coffee brand and um, everyone, I mean everyone would end

Speaker B: up consuming a mushroom. Mushroom coffee, Nootropics and coffee. Brilliant brand, excellent products. Yeah.

Speaker A: So for those guys, um, uh, you know if customers um, completes their order in uh 30 days then they unlock um, additional 5% discount uh after two orders. Um, uh after two orders another um uh 5% discount on the fourth order where there's a highest drop off for these guys, let's say then they would increase the discount to about 10%. So idea is that.

Speaker B: And then that discount would be used for the next subscription or that discount would just be used for any additional purchase they want to make.

Speaker A: No, no, for, for that subscription. Because uh, our uh objective is that the customer should be rewarded for their consistent behavior. And in all of this the important thing is the customer needs to be aware about all of these things. Otherwise it's. I mean you can create whatever programs that you create but if they're not being Communicated to the customers up front. And very clearly it doesn't solve any purpose. Um, so of course it gets communicated in the upcoming order email and so on and so forth. But when customer visits the portal there are again these banners, beautiful banners which just talks about that, you know, hey, thank you for subscribing. You are loyal customers. We want you to continue and here is something additional from us, uh, for you to continue. Now think about this, that how well this could work in the supplements category. We want you to be, you know, for better health, consistently, uh, keep on using the product and uh, we are with you and you know we'll, we'll sort of offer additional discount and whatnot, rewards and so on and so forth for you to order consistently.

Speaker B: That's great. It's great. So you're, you're communicating that via email, potentially via sms. And, and how are you seeing brands communicate that? Are they making that part of the hey, your subscription is coming up. And so they're kind of, they're adding that in there maybe because, because that, your, your subscription is coming up. One, it can just be exciting if you're really ready to get that, that uh, product again. Two, it could be a reminder to cancel or skip if you have too much of the product. It's like are you seeing brands put that hey, bigger reward coming in this subscription? They're putting that communication there or it's a separate communication. What are you seeing?

Speaker A: Yeah, so I mean we've also looked at this data that uh, when do customers exactly cancel? Um, so there are two big hotspots. So one is immediately after ordering, uh, which is what we call zero day churn, uh because customers only subscribe for a discount. Um, and then second is after upcoming order email. So another insight that uh, you know that we. So another data point that we communicate with brands is uh, that what is your zero day churn and what is your upcoming order email? Churn.

Speaker B: Yeah.

Speaker A: So after upcoming order email is sent, how many customers are sort of going and canceling? So about 20 to 25% of the cancellations which would happen would, would be triggered in last three, four days after that email is sent out.

Speaker B: Interesting.

Speaker A: So then designing that emails become very important and um, that's where um, whatever. So of course one is an educational component of that email, uh, why customers consistently keep on using the product. And second is also this additional delight or surprise, um, you know, factor which could be introduced in the email that just says that hey, you know, we know your next order is coming in, but along with the next order, there's something extra, which you're going to get. Um, so, and of course it's on the email and then it's on the customer portal so customers do not miss it. And um, that's how it works.

Speaker B: Yeah, it makes a ton of sense where you know, those upcoming subscription emails, you got to do it right? Because I mean there, there are some things I subscribe to and I mean I love subscribing to things because then I don't have to think about reordering. But sometimes I'll like run out and then I'm like, when am I going to get like my coffee or coffee from um, one of my favorite coffee shops and um, sometimes run out and then I'm like, when's the next order coming? So I'm looking for that email. I want that email to let me know. But for other things, maybe I got too much of it. And so that email, it's a trigger, it's a reminder, it's a, hey, you got another subscription coming up, you should probably cancel. Like that. That's kind of the underlying message, right? And so that's interesting. 25% of churn comes within three or four days of that subscription reminder email. So, so then shift the message and talk about the upcoming reward, the mystery reward, the bigger discount, the free gift type of thing that's coming up. So, uh, really craft and tailor that message, then get the portal to match that message and now you can greatly reduce that. That churn that's triggered by that email. Love that. That's super, super smart. This episode is brought to you by northbeam. Here's a problem with your data, it's lying to you. Uh, every platform takes credit for every sale. Meta says it worked. Google says it worked. They both say it worked. And somewhere in the middle, you're making million dollar scaling decisions based on a number and numbers that don't add up. North Beam fixes that. It replaces fragmented, biased platform data with a universal attribution engine, BUIL data, so you can finally see what's actually driving revenue and profit. Upper funnel video cross channel journeys. North Beam models the true impact of all of it. So you can scale what works and cut what doesn't. And here's what makes it different for, uh, all of you. North Beam ties attribution directly to your daily P and L by channel, with profit benchmarks built in. So your CMO and your CFO are finally looking at the same number and agreeing on what good actually looks like. So stop guessing. Start trusting the Data, go visit my friends at Northbeam. Any thoughts on the zero day Churn? I mean I guess as we're optimizing the portal and putting banners and rewards and messages there, that's going to potentially help with zero day Churn. Sometimes people are just going to do that because that's the way they shop. They do a subscription to get a discount. They cancel. But any tips for reducing that zero day churn?

Speaker A: Um, yeah. So, um, educational. Um, so most of those customers are coming in with the intent. I mean if they're coming on a portal, uh, to cancel uh, on the same day as um, uh, they've subscribed, uh, then the chances are that they subscribed only for discounts. Um, so there are um, uh two ways if you've seen where brands handle it. Uh, so first is brands um, offer very aggressive discount on um, first order but along with the condition which says that hey, you got to complete minimum two orders. Um, and this is communicated upfront to the customer on the widget or while they are subscribing. So uh, it's a very aggressive discount. We know we are giving a very aggressive discount but we want you to try the product for at least two billing cycles. So that's the one way in which brands um, handle it. And then the second is of course all of these things are there, you know, upcoming rewards and mystery rewards streaks and all of that. But then uh, one interesting thing that we started see brands do is um, when a customers are coming on portal to cancel then the cancellation flow, the messaging on the cancellation flow that is physically designed for this segment who have not even received their products. So for example, um, again I'm taking four sigmatic example again because they've done really good job at cancellation flows. Uh, their save rate is uh, 40% on the cancellation flow. It's one of the highest that we have seen. So customers click. So those guys have even designed um, uh, Cancellation Journey specifically for customers who have ordered and uh, seven days within first seven days of customer ordering. So if customer clicks on cancel, then the messaging there goes like hey, you've not even tried your first cup of coffee coffee as yet. Why don't you try it and then see how it works and then sort of go from there even. It's just because the only thing that brand can do is they can communicate. You know that you know you should at least educate the customers or tell the customers that you should just wait for some time. So very simple thing. Um, but uh, we have seen that even this is sort of helping them uh save um save uh churn. It's a founder video. It's a very or it's a cool shift. So they're doing AB on this. But um uh at least try the

Speaker B: product before it makes sense. Right. So it's a logical thing. Hey before you cancel give it a try. You can always cancel later. Cancellation is easy but why don't you give it a try and see are they, is that just strictly an educational thing? Are they adding a little discount or something to if they stick around or is it mostly educational in this case?

Speaker A: Uh I think uh that's primarily educational at uh this point in time. And um, I mean they do uh sort of talk about it that you know hey after um 90 uh percent of the customers uh would see a positive impact and so on and so forth. So a lot of this is educational and uh they also talk about the fact that you know customer uh sees results very quickly. So uh. But you should at least try the product.

Speaker B: Yeah, yeah I like that a lot. What are you seeing um brands do to increase consumption and to get someone to actually use the product because if there's active usage of the product, active consumption then your not going to have too much product. You're going to stick a little bit longer. I've got a great example from just, just a brand that I do business with or not a client or anything but would, would love to hear what your brands are doing to increase consumption and use usage rates.

Speaker A: Most um of this is um communication um primarily driven by email educational uh information on um uh depending upon the brand category they would either talk about hey you know you started to take the product and uh these are the changes that you'd start to feel now. Um or they would talk about what are the different ways in which you can use the product. Um if there are let's say it's a consumable and you know there are flavors involved and so on and so forth. Um so uh consistent reminders via consistent reminders uh via email uh is what generally brands do to keep the consumption going on.

Speaker B: Yeah it's such a great uh call out and something that I think most brands don't do very well. One brand that is phenomenal at this I am a customer, they're not a client. Body health and their perfect amino product. So I like to work out. I used to consume protein powder. Almost all protein powder bothers my stomach. I don't like it, I don't like the way I feel afterwards that sort of thing. And so I Saw perfect aminos which are really like, that's the building blocks of protein. You get amino acids, you get the benefit of protein. But they're light essentially no calorie, take em on an empty stomach, things like that. So I tried it. Um, one of my biggest questions though in taking it was like, how much can I take? Like can I take two scoops, three scoops, five scoops? How much can I take? Didn't know really. Um, so I started using it. I got an email that was like, hey, this is your full guide to how to consume and use this product as you're working out and here's how you can do it. And like hey, this is the equivalent of taking 30 or 40 grams of protein but it's gonna have no caloric impact and it's general on your stomach or whatever. And so now I'm like, well I could do at least two scoops a day. On days that I work out. I'll take it before I go to the gym, after go to the gym, that sort of thing. But like, as I was educated then I felt empowered. I was like, well I'm going to increase consumption and guess what, I had one thing ordered a month and now I just throw in an extra pretty frequently because I run out. And so that's one of those things where if I hadn't been consistently educated I may have churned by now or my consumption would just be average right now I know it's above average. And so uh, yeah, that education is huge for sure.

Speaker A: And education mixed with even motivation sort of works really well. So for example, a lot of brands would also sort of talk about that, you know, um, they would add in sort of customer testimonials, they would talk about that, you know, after three months is what you can expect. That's why you, because uh, when brands are um, acquiring customers there's a lot of education which is happening um, on PDPs or a lot of these places. Idea is um, to reiterate that entire messaging, um, to drive consumption. But again, so like brands sort of take a call on uh, how do the. There's a fine line on doing excess of it. And uh, so uh, you know, um, that's a fine line. But yeah, education is important.

Speaker B: Totally makes sense. Um, let's talk about, you mentioned something else when we were prepping that I thought was really interesting. Um, second order subscribers are often 2x more valuable. Um, so people that you know, order for first, then they order again and subscribe two times more valuable, maybe double the ltv, that sort of thing kind of makes logical sense. But unpack that for us and then are there any nuggets or things we could try to kind of tap into that?

Speaker A: Yeah, yeah, absolutely. So, um, you know, um, when we're trying to figure out um, uh, LTV for um, subscribers and we're just trying to dissect data in different, different ways. And uh, one of the insights was that a lot of customers, um, a lot of subscriber, a lot of customers would subscribe on the first order. Uh, but then um, we saw that uh, customers who are subscribing on their second order. So first order was one time, um, but customers are subscribing on their second order. Their LTV is about 2x of customers who subscribed on their first order. So one time customer is of course the lowest subscriber and then subscribers who are subscribing after the first order. So this was a uh, really interesting thing and it makes a lot of sense also from this perspective that if a customer has already tried the product and um, if um, they like the

Speaker B: product, you know, they like it at that point. Right?

Speaker A: Yeah. So then the brands would, should ideally sort of make that process very seamless for these customers to subscribe. So now to solve for that we did something called, we built an entire utility where you know, brands would create unique checkout URLs. One click checkout URLs. So for example, if you subscribe for uh, vitamins then brands um, could run interesting campaigns after 15 days, 20 days, 30 days, days, whatever the consumption frequency is. And with an aggressive discount, um, or some motivation where, you know, hey, if you subscribe now, you unlock special rewards which are not available, let's say on the storefront and whatnot. And um, customer clicks on that link and it's a one click checkout. It directly goes on to, you know, shopify. In most of the cases, all of their details are already there and they just need to sort of uh, you know, just hit that shop pay one button and then the subscription is started.

Speaker B: Amazing. So I order now, I'm in the email flows and all those things that should be happening that we helped set up at OMG commerce and stuff. But at maybe day 25, 28, whatever, whenever, they're probably running out of that product. You are now seeing an email saying, hey, one click subscribe to this. You love it. You're beginning to see the benefits. But the real benefits come maybe in another month or two. So once you lock it in, lock in those benefits get the subscription and that's all just basically a uh, one click deal or close to it to get that subscription. Uh, I love that, that's awesome.

Speaker A: And then brands can also actually figure out you know, very interesting insights in terms of um, you know they can, if they end up creating multiple URLs then you know even figuring out which messaging is working well, what timing is working well, like looking at different checkout URLs uh, to see which URL is uh, which message. So for example uh, give insight in terms of which link is being clicked how many times and what is the completion rate. So for example um, you know, um, um after 15 days there's URL one, after 20 days another one. And you know brands can do different, different types of testing um, for content, for timing, et cetera and set up different URLs and they can keep on iterating even on the content side and they can see the entire results um, just uh, on a dashboard pretty easily. So uh, one of our common customers living with daily I think um, they've also been um, they've been sort of power user of uh, this particular feature.

Speaker B: That's great. Um, another topic that I thought was really interesting is um, upselling as a zero CAC revenue channel. So taking subscribers, I think you talked about good protein potentially with this where their subscriber product launches, new product launches, go to them first, new you know, opportunities, uh, go to them first, things like that, uh, talk about that a little bit and maybe unpack the good protein example or other, other examples if they're more top of mind. How do we kind of embrace that you know zero CAC revenue channel?

Speaker A: Yeah, yeah. So um, so when we started uh, solving for upselling, um, one of the things was that um, if customer likes one product or they're already subscribed to one product, it's a no brainer to give them another product and directly do it um, on the customer portal, single click with the next order and so on and so forth. And this by the way can be another messaging which can go into upcoming order email. Hey, because you are a loyal subscriber, we're giving you something which will work very well with something that you're already subscribed to. Uh, and add this in your next

Speaker B: order or hey, this pairs well what you're ordering now, pairs well with this new product or this additional product is added to your order type of thing. We'll make it easy.

Speaker A: Yeah, yeah. And these are like very uh, basic use cases where uh, you know uh, Depending upon which customer, what, who the customer is, what you want to upsell to them and then just have that communication on email, have that communication on the customer portal, like and make it like very simple for the customers to um, add another product in um uh, uh, with their future orders.

Speaker B: Good.

Speaker A: Um, protein is a very interesting um, case study because those guys are uh, power users for upselling. Those guys drive significant, I think 25% of their revenue on subscriptions is driven by upselling. That's an insane number. And at their scale, um, those guys have high uh, five digit subscribers. And um, what they would sort of experiment so they would experiment a lot with um, with communication. So even on the customer portal, what communication makes sense? Um, and you know brands sort of figure out that which communication is driving higher CTR. What discount works better, um, is a 10% discount, 20% discount or 10% discount on next two orders. And this is only for the upsell, you know the newer product which is being added not on the existing one. So brands can run a lot of these interesting things. Um uh, they would run a lot of these interesting things to drive that upselling. And then they also started doing this, that you know, customers who have been their most loyal subscriber, like customers who've done 10 plus orders whenever they would launch new flavors, it would exclusively be available only for those customers. Yeah, uh, BFCM deals. Uh, so BSCM deals will first land on the subscriber portal only for um,

Speaker B: uh, early Black Friday deals. Only to you as a subscriber or maybe only to you as a 10 times subscriber. You're, you're a true VIP, that type of thing.

Speaker A: Yeah, yeah. New product. So, and it works really, really well. Um, so idea is that brands could essentially segment their customers into different, different ways and they could try to figure out that which product, which uh, discount, which offer would work really well for which customer segment and um, then just run with it. So good protein does it like really, really well.

Speaker B: It's so great. And just understanding the power of a good subscription business. And as you make these little improvements and little tweaks over time, some of these brands you talked about have uh, 10x12x their subscriber revenue. And so again that subscriber revenue is a consistent base you can count on for next month. Uh but it also leads to more upsells. So like getting, you know, getting people to buy additional products. Subscribers are way more likely to do that. Uh, there's also the benefit of increased word of mouth and referrals and things like that subscriber is way more likely to do that than someone who just buys once or twice. And so so many benefits tied in here um, that I really. Yeah, uh, love it.

Speaker A: Yeah. So one of the interesting things that we've done um, uh, for brands is so uh, you know one time customers or even these subscribers would also have um, uh if the brand is using loyalty then they would have uh, these loyalty points. Um, so one of the interesting things that we ended up doing is that customers can directly buy the product from their loyalty points. So it's an incremental discount. So they would be able to pay, uh, there's a discount on the product, they will be able to redeem their loyalty point. And um, it's a very seamless way for them nice to add another product.

Speaker B: So. But yeah, so I'm subscribing, I'm ordering a bunch of loyalty points if that's the way things are set up in my system. And then I could send an email saying hey, add this additional product, appears well with what you already have or it's a new product, I think you'll love it, that type of thing. And hey, you got X number of loyalty points. Just apply that to the purchase.

Speaker A: Yeah, yeah, yeah, yeah.

Speaker B: Love that, love that. So let's talk about this for a minute. Piyush. I um, you know for when we work in a lot in the, in the beauty category, skincare supplements, love all of them. I love consumable brands and products. Um, but let's talk non traditional a little bit because you know, I know you're always thinking about okay, how can we add a subscription component to a brand to a product category where maybe it's not as obvious or kind of a non traditional subscription type business. Can you give us some examples there? And then, and then how should those non traditional brands that kind of approach that.

Speaker A: Yeah, so um, I mean all the different types of subscription which are mostly for consumables. Um, right. So um, um, individual product subscription bundle subscription, prepaid subscription where customers end up paying upfront for like 12 months etc. So all of these things, um, brands have been sort of experimenting a lot. Um, and um, one of the interesting type of use case that we started seeing is in physical products space where let's say if um, there is a uh, air purifier brand then um, they would um, sell air purifiers, um, but they would offer an eddy. They would sort of have two different plans. So one is you can only buy air purifiers and Another is you can buy air purifiers but with a filter subscription. Uh, and um, now here the subscription is not of course air purified. The subscription here is a filter. And um, that is something that we have started seeing um, pick up. We have like few brands um, who have been using this type of a setup. Um, digital membership, subscription is starting to sort of pick up as well. Brands, um, like Signos, um, et cetera, where customer um, is buying membership uh, along with the physical product.

Speaker B: Um, membership to like was this like a fitness brand. So they're buying a subscription to like a digital portal or something?

Speaker A: Yeah, analytics. Let's say if someone uh, is buying um a physical product then it's a membership to see analytics, um, something on those lines.

Speaker B: Yeah, yeah, yeah. I really like that example of so if I buy an air purifier I've got that option. If I buy an air purifier and I, I go and get the subscription because hey, you're going to have to get replacement filters. And you know what nobody wants to remember and what nobody usually does remember is buying filters. And so just do that right now. Are you seeing then for brands like that, are they offering a discount on the air uh purifier if you go ahead and subscribe or they just offering a discount on the subscription? Potentially both. Like what, what are you seeing that incentivizes that, you know, locking in the subscription when they purchase the product.

Speaker A: So the biggest one that we see generally with these um, add on subscriptions is um, uh, subscription on the uh discount on the add on product. So let's say if filter is $100 then instead of 100 you can lock this price for $75. And uh, it makes customer pause and think that you know, they would be needing. And if they're buying filter then they've already decided that they need filter and then filter, ah, sorry air purifier. And then um, at that point in time they're like, you know, they might as well sort of lock in um, discounted price for air purifiers which would not be available. If they just go and sort of see air purifiers, uh, they go and um, brands would have different discount for air purifier subscription. So for example when you buy, when you're buying air purifier then filter is at 75, um, if you subscribe. But if you're only subscribing to filter then brands would keep that discount a little lower, say $uh 20. So you know, additional motivation for Customers, some brands also do this that they would also give um, the even on the one time purchase, let's say air purifiers for uh, $100. Then um, air purifier plus subscription would be say $90 compared to $100 for one time postures.

Speaker B: Yeah, yeah, yeah, totally makes sense. So then, then you've got that added kind of psychological benefit of I know I'm going to need the filters and if I go ahead and do that now, I'm locking in the biggest savings I can get or potentially I'm locking into big savings and I'm getting a little bit of savings on the air purifier, that sort of thing. You know we, we have a refrigerator, uh, with an ice maker and you know the water that's in the door or whatever. And I get to where I was just like always having to order the filters. And so I was like, I just subscribe to it. And now you know, just the other day the light came on, I'm like oh wait, I just got a filter like yesterday. This is great. I don't have to think about it now. I can just plug it in. And so ah, yeah, that happens a few times and you begin to think, okay, some of these subscriptions are actually quite useful for me. So I want to start doing them

Speaker A: even with like very different soap, air filters, water purifier. So all of these are ah, standard things even with shoes. Right. Uh, brands can offer subscription for soles.

Speaker B: Yeah. So um, soles, laces, other things like you think of. Yeah, I think, I think that's one of those things where really you're probably just limited by your imagination only. Like what, what is an extra utility, um, that someone could get from my product and what, what could make that, how can we make that a subscription?

Speaker A: Ye.

Speaker B: And uh, even if your take rate is not the same or the, the, the duration, someone say subscribe is not the same as a, you know, beauty brand or something, it could still be a meaningful impact uh, to your revenue, to your business. So that's great. Um, kind of last topic here. Piyush. As we're, as we're nearing our end uh, of our time here, what can we do to increase the take rate? Right. So like we, so we've got a subscription business. What are we testing on the PDP or with offers or things like that, how can we increase the take rate for subscribers?

Speaker A: Yeah, so um, a lot of this would be about uh, customers deciding whether they want to buy one time or they want to buy Subscriptions. So then what is it that they're getting additional for subscription?

Speaker B: Yeah.

Speaker A: Um, so of course, there are discounts, which everyone is doing. But then some brands would get creative with it, and they would communicate the subscription offering. Uh, so they'd make subscription offering look like really big. Um, so say, you know, if you're adding a gift with the subscription purchase, then, um, that product might be. That's a $50 product, and that gift is, let's say, worth, um, uh, $20. Um, then then brand could communicate that, you know, there is a. If you subscribe, then you are unlocking these additional. You know, you are unlocking $20 worth of, um, another product. Um, there's one thing which seems to be working well. Another thing, uh, which seems to be working well is staggered discount. So let's say first two or three orders at higher discount, just. And then the communication here is that, you know, we want you to try this, and we know that you'll see results. So first three orders are at, let's say, 20% off, and then after that, you sort of. Brands would reduce it to 10%, 5%, whatever that number is. And, um, that seems to be working well. Uh, talking about, um, some brands do this, that on every order brands is doing some type of a mystery gift. So communicating it upfront that, hey, if you subscribe, then every month you're going to get something. And, uh, communicating all of this directly as a part of that subscription widget or on the PDP so that customers, uh, don't miss it. So, yeah, I love that.

Speaker B: Where if, you know, if I'm thinking, hey, I kind of want to subscribe anyway, I think I'm going to use this. I like the savings and the discount. Now you're telling me about a mystery reward that I'm going to get each month. Okay, just one more thing to kind of tip me over the edge and make me say yes. It's really great.

Speaker A: Yeah.

Speaker B: Um, fantastic. Well, Pierce, this has been amazing. Love what you guys are doing at Loop subscriptions. As I mentioned, a lot of our top clients are customers of yours, and you guys are working with you. We already mentioned several, but good protein, four sigmatic, Living Good Daily, oc, Malibu Primal Queen, Neutropol, and the list goes on and on. Um, for those that are saying, hey, I don't think my subscription game is where it should be. I need to check out Loop. How can they learn more? How can they get a demo? How can they connect with you?

Speaker A: Absolutely. Um, reach out to us, um, on, um, a Website, write to me at piyushwork co. Um, we've migrated over 19, um, hundred plus brands so far and uh, for every brand, um, churn reduction, um, improving upsell revenue and uh, improving payment recovery. So this is something that we've done consistently for so many brands, um, that we migrated and we take care of end to end migration. Even if you're not thinking about migration, uh, we can always do, uh, subscription audit for your brand and tell you what are some things that you can fix.

Speaker B: Love that subscription audit. If you got any component of subscription in your business or you're wanting to add it, uh, take piyush and his team at loop up on that. Check it out. So that's loopwork.co and it's Piyush P I U P I Y U S h@loopwork co. So check them out with that piyush. Thank you so much. Love this topic, love what you guys are doing and look forward to chatting again soon.

Speaker A: Yeah, thank you so much, Brad. It was good to connect and talk.

Speaker B: Absolutely. And as always, thank you for tuning in. We'd love to hear from you. Uh, let us know what you think about the show. If you found this helpful and you think someone else will find it helpful as well, please share the show with them. And with that, until next time, thank you for listening. That'll do it for this week's episode. One final mention. If you feel like you've stalled out with your growth, if you feel like you've missed opportunities, and if you feel like your current team or agency, they just don't have that buyer anymore, or maybe you feel like you've outgrown them, we would love to chat. You may be missing opportunity and we don't want to miss an opportunity to work with great brands. So if you'd love to scale on YouTube or Google or meta or Amazon or email and SMS or just look like a second set of eyes to look over how you're growing right now, uh, Visit us at omgcommerce m.com and we can't wait to help you scale profitably.