What’s better than one amazing gift? How about an amazing gift delivered to your door every month for a few months? Of course, we’re talking about gift subscriptions.
The subscription industry has boomed in recent years, with the average US consumer has around 12 subscriptions, and this increases the younger the demographics as Millennials have around 17 subscriptions on average. If we look at gifting specifically, 72% of Gen Z say they’ve given a subscription as a gift. This means that even if a customer is unfamiliar with the products their gift recipient likes, they are familiar with the benefits and ease of subscriptions. They can choose a subscription, knowing that the brand will take care of finding the products, while they get the credit for choosing a great gift.
So, this is all great, and gift subscriptions are a no brainer especially if you have an existing subscription product. And if that is the case, you’ll likely already be familiar with one of the biggest challenges of a successful subscription model - retention and churn.
The bad news is that this becomes even more of a challenge with gift subscribers. After all, they’re not the one who researched, bought into, and paid for the subscription. That was the person who gave it to them as a gift. You need to convince them that your subscription is worth carrying forward when their gifted period runs out.
The good news is that there are plenty of ways you can reduce churn and improve gift subscription retention. Let’s look at how to do that in just 4 steps.
Step #1 - Make it easy to set-up and manage their account
It sounds simple, but making account management easy and straightforward for gift recipients will be one of the most important things you can do to reduce post-gift churn. In fact, 79% of subscription customers globally say they wish companies made it easier for them to self-manage their subscriptions.
If you’ve ever had a subscription where you couldn’t quite figure out how to cancel it, or it was difficult to find where you should add your details, then you’ll understand just how much it can spoil your experience.
The first step is in actually activating the subscription and setting up the account. For many merchants, the “gift” setup is still the gift buyer purchasing a regular subscription then either adding the recipient’s details, or having to transfer over the account. If your subscription is tailored based on something like a quiz flow, then this means the recipient may not get the opportunity to answer for themselves.
By integrating Govalo with an app like Recharge, you can completely streamline this process and make it a smoother experience for everyone involved. The customer buys the subscription, adds their recipient’s details, and the recipient gets an email with a code and all the details they need to redeem and activate their subscription. From there, they can add their own details, complete any personalization quizzes, and manage their account without any hand over or friction. They can also add their own payment details, which makes it easy for them to carry forward the subscription.
The subscription is now totally in the hands of the recipient, but the work doesn’t stop there. It’s just as important for gift subscribers as your regular ones that you have a really simple, easy to navigate customer portal. It should be clear to them where they can swap items, change their details, view upcoming orders, and skip a month if for example they’re on vacation. This will set them up for a great experience and give them a greater sense of ownership and control over their subscription, making it more likely they’ll want to carry it forward when their gifted period comes to an end.
Step #2 - Design a gift specific onboarding experience
When someone receives your subscription as a gift, they haven’t gone through the same discovery and decision process as the rest of your customers. With a regular subscriber, they’ve had to read about your service, understand your brand and products, and make the decision that it’s worth trying out. Gift subscribers don’t have any of that, and that makes their experience unique. There’s a chance they may have heard of your brand before, or tried similar products, but there’s equally a chance they have no knowledge at all.
You need to design a separate onboarding experience that takes their unique circumstances into account. That means looking at your existing onboarding process, and thinking about where you could tailor it to gift recipients. That may be adding extra questions into your quiz flow to better understand the recipient’s understanding of your products, or just tweaking the messaging they get to acknowledge that it’s a gift.
Email and SMS are two of the most engaging channels you’ll use as part of your subscription service. It’s how you communicate order information, new products, promotions, request feedback and more. Therefore it’s important to use this channel to enrich the onboarding experience for gift recipients. Give them a full introduction series to your brand, as well as the benefits and perks of your subscriptions, information about your products, and any communities that exist around your brand.
When it comes time to ship their first order, include material in their delivery that speaks to it being part of a gift. That could mean changing the wording on printed leaflets, or adding in more brand education than you normally would.
Step #3 - Step up your end of gift cycle communication
Have you ever signed up for a subscription, and you get a ton of freebies and communication during the onboarding process, then you barely hear from them afterwards? Keeping up engagement is vital to reducing subscription churn, and it’s even more important when it comes to gift subscriptions. You need to have a plan in place for how you’ll turn that gift recipient into a loyal subscriber, and it has to be engaging and valuable.
Set up automated email campaigns that will start targeting gift recipients once they’re 2 or so deliveries away from the end of their gifted subscription period. You should include the following as part of these workflows:
- Reminders that their subscription is coming to an end - i.e. “You have 2 deliveries remaining!”, “Your last delivery is coming up!”.
- Details of perks and benefits of the subscription.
- Incentives for carrying it forward past the gifted period, e.g. a gift card to spend on their subscription, or a free product tailored to their preferences.
- Information about upcoming boxes - personalize these with products they would like based on their engagement with previous deliveries.
- Information about pricing options, and how to add their payment information to their account.
As for SMS, you can use this as a more conversational, feedback oriented way to engage the subscriber. Ask them questions such as “We hope you’re enjoying your gift! Have you liked your experience so far?” with different responses depending on their answer. If the answer is more negative, your customer support team can then reach out to them and attempt to understand why they’re unhappy and resolve any issues they may have.
Step #4 - Bring them into your loyalty program and community
Building a meaningful relationship with your customers is crucial to retention. Community and loyalty programs are two methods you can use to do just that, and it can be especially effective when convincing gift subscribers to keep their subscription.
Let’s start with loyalty programs. 71% of consumers say loyalty programs are an important part of their relationships with retailers, and 79% say loyalty programs make them more likely to continue doing business with a brand. Ensure that gift subscribers are well informed about your loyalty program - how it works, how they earn, how to redeem, and so on. You could even offer a bonus to gift subscribers to encourage them to explore more about your program e.g. “Here’s a gift from us!” with extra points or a tier upgrade. You can then use this as part of your end-of-cycle communication strategy to encourage them to carry the subscription forward, by reminding them of the benefits they’ve already received or redeemed.
When it comes to community, gift subscribers may feel less bought into your brand because as we’ve covered, they weren’t the one who researched and decided to purchase something from your store. Therefore your community is going to be essential in giving them that brand buy-in, by seeing how others engage with your brand and what you do to cultivate that community in return. That might be showcasing user generated content, highlighting community members in newsletters, giveaways, charity drives that align with community values, etc. It means to the gift subscriber you become more than just a box of products they get each month.
Gift subscriptions are a huge opportunity for merchants to grow their subscriber base and sell more during key sales periods. By thinking about gift subscriber needs and how they may differ from a regular subscriber, you’ll design a unique and engaging experience that’s optimized for retention.