Appstle Subscriptions – Innovative use cases to win the e-commerce game

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Overview

Sure, Appstle Subscriptions is about providing the opportunity to your customers, to subscribe to your products or services on a regular basis, and for you to develop a strong recurring revenue stream! But, it can be a lot more!

This doc will walk you through some innovative use cases of key features offered by Appstle Subscriptions! Our goal is simple – we want our merchants to thrive in their e-commerce journey, and stand out from the ever expanding competition

Use cases – high level snapshot

Use cases – in detail

1. Product Swap Feature

1.1 Avoiding ‘out of stock’ situations

Strategically swapping an out of stock product (with required customer intimation and approval) will avoid customer churn and loss of sales. Appstle enables you to do this both manually (when you see that the inventory of a product is running low), and automatically, based on pre-set rules.

For example, lets assume your store sells pantry/kitchen items. You have several customers who have subscribed for Starbucks’ Keurig coffee cups. But in a given month, the supply from Starbucks is running low. In this situation, you can set up an automatic product swap with Peets’ Keurig coffee cups. Now, as soon as the Starbucks cups goes out of stock, your customers will be shipped the Peets’ Keurig cups. To make sure that your customers are happy with the swap, and understand that it was due to supply issues beyond your control, you can trigger an (automatic) email to them before the swapped product is shipped, informing them of the change, and giving them an opportunity to skip the delivery, if they prefer.

This will not only ensure that your sales remain high, but will also help with customer engagement and loyalty!

1.2 Enabling customers to try new variants

Most shoppers interested in products that have many variants, subscribe to just a specific variant. Oftentimes this specific variant pick happens based on convenience (eg: the first hit that came up when they searched for the product), rather than a deep-set favoritism! A good strategy for a store to sustain shoppers’ interest and loyalty to their store, is to enable them to try the other variants.

Going back to the same Starbucks’ Keurig coffee cups example, lets assume a customer subscribed to the French roast flavor of coffee. During the welcome email, you (the merchant) can ask the customer if they have a specific preference for the French roast flavor, or if they are willing to be surprised and delighted with other Starbucks Flavors. You can add a link in the email, for them to provide their responses. For customers who answered a ‘No’ (as in, they do not have a favorite flavor), you can create an automatic or manual product swap rule, swapping the French roast flavor with the Sumatra and Caffe Verona flavors every other month. When in the future, Starbucks introduces a new flavor, you can swap that in as well, pleasantly surprising your customers, and make them one of the firsts in the world, to try it!

This will improve your customer’s experience and their loyalty to your store!

1.3 Natural swap of product variant, based on evolving needs

This use case refers to natural or organic changes to the needs of customers, and how the product swap feature can be handy, to stay on top of these changes, with minimal friction.

A good example is baby diapers. Lets assume your store sells baby products. A customer sets a monthly subscription for size 2 diapers. In a few months, as the baby grows, the product swap feature allows the customer to conveniently switch the product to size 3 diapers, without needing to cancel the existing subscription. This way, they stay with your store and enjoy the subscription for baby products for many years to come, with absolutely zero friction!

1.4 Product Swap Cycle as a store / business model strategy

This use case is slightly similar to use case 1.2 (Enabling customers to try new variants). But, with this use case, instead of changing the product variant that your customers subscribed to, you will be working on a more open ended subscription plan, as a targeted sales strategy.

For example, lets assume you have a book store. You have a monthly subscription plan for mystery genre books. Using Appstle Subscriptions’ product swap feature, you can send your customers a new mystery book every month. Further, to automate the product swap, you can have a pre-set rule to pick the book that shipped every month. For instance, you can set the rule that the book that is listed as No. 1 in mystery genre in the New York Times best seller list each month be shipped to your customers. You can also have pre-set rules based on authors of books. The options are endless!

This use case can be used in multiple situations, for various product categories. To give another example, lets assume you have an ice cream store. A customer subscribes to cornetto ice cream. You (the merchant) can pre-set the product swap automation rules the following way:

  • Week 1 – Vannila flavor.
  • Week 2 – Strawberry flavor.
  • Week 3 – Pista flavor.
  • Week 4 – Chocolate flavor.
  • Week 5 – back to Vannila flavor, and so on.

You can advertise this as the ‘new flavor every week plan’ and increase the wow factor of your store!

2. Multiple Discount Tier

Subscription means recurring revenue to your store, without any distraction to your customers from competing brands. Studies show that sometimes even the most loyal customers need a little nudge and incentivization to commit to a recurring purchase. Appstle’s multiple discount tier enables you to offer varying discounts at different times, or based on different rules, to sustain the interest and loyalty of your customers for a long period of time.

2.1 Incentivizing customers to subscribe to products on a recurring basis

The most basic use case of the discount feature is to make the recurring purchase option and a long term commitment appealing to customers, by reducing the price of the subscribed product.

The multiple discount tier makes this use case richer, as it enables you – the merchant, to offer higher discounts if the final value of your customer’s subscription is higher, or if they subscribe to several products together.

For example, lets go back to the pantry store example. Using the multiple tier discount, the merchant can set up a discount rule where:

  • A subscription order for less than $50 will have a 5% discount applied at checkout
  • A subscription order between $50-$100 will have a 10% discount applied at checkout
  • A subscription order of greater than $100 will have a 15% discount applied at checkout

This way, your customers are not only incentivized to subscribe, but also to subscribe for a higher value!

2.2 Strengthening discounts after a pre-set period, to retain customers for a longer period of time

With Appstle, the discount tiers can be used not just for variations based on order value, but for also variations related to time.

To explain more, all subscribing customers are loyal customers. They are storing their payment methods on your system, and are making the commitment to buy your products or services on a recurring basis. But, there are a few customers who have been with you for a very long period of time. These customers are your champions, and they are the customers for whom your store name is synonymous with the product they are interested in! The multiple discount tier enables you to show your special appreciation to them. You can do this, by increasing the applicable discount, after the recurring/subscription order reaches a certain number of orders.

For example, going back to the pantry store example, the merchant can set the discount at 5% for the first 20 subscription order deliveries, and then increase tit to 7% afterward.

2.3 Tactically playing with multiple discount tiers and combinations, to arrive at the right fit

Maximizing your store profit can be complex! It needs knowing the pulse of your customers, and arriving at the magic discount rate – the right rate that is high enough to entice your customers to subscribe to your products, while not being too high that you are leaving money on the table. It is about numbers. It is about the dynamics between volume of sales (for a lower net price) and value of sales (for a higher net price). Lastly, it is about trial and learning! Appstle’s multiple discount tier functionality provides you the best opportunity to try multiple discount rates to arrive at the profit maximizing number.

Email Notifications

3.1 Notifying customers when there is an update to their subscription

For the end customer, getting notified when there is an update or change to their subscription is an important element of purchase experience and convenience.

Appstle’s email notification functionality (and SMS notification functionality for the enterprise plan) enables the merchants to automate these important notifications to their customers, and helps maintain transparency with their customers. A few examples of subscription milestones and journey points at which Appstle provides email notifications are – new subscription creation, upcoming order, subscription product swap, expiring payment method, etc).

3.2 Avoiding involuntary churn

Your customers are busy. Oftentimes, they can overlook the expiration of a credit or debit card, or have insufficient balance or spending limit, which can result in failed transactions. This is what is known as an involuntary churn, as the customer in this case, loves your product(s), and wants to continue their subscriptions, but the transaction fails due to technical reasons.

The email notification functionality is a great way for you – the merchant to let your customers know that their payment method will be expiring soon, and to remind them to update their payment details and keep their subscriptions uninterrupted.

3.3 Strategic customer engagement and promotion

Apart from notifying your customers about key updates and changes to their subscriptions, emails can also be a supreme method to reach out to them, stay engaged, and promote your store and products, without spending a lot of marketing $. To give an example, when you send automated emails to your customers about an upcoming delivery, you can introduce a new product that you have added to your store!

Pre-paid Billing

There are two major types of billing in subscriptions – a) pay-as-you-go, and b) prepaid billing. While pay as you go is the regular billing, where the customers are charged at regular intervals, as per their order frequency, prepaid billing is where the customers make an upfront payment for multiple upcoming orders that are a part of the subscription. There are s benefits or use cases in offering pre-paid billing option to your customers.

4.1 Providing additional options to customers, to pay upfront

The simplest use case of prepaid billing, is to provide multiple billing options to your customers. While majority of customers prefer regular billing, there are some for whom a bulk and advance payment means a hassle free life! Providing an option for prepaid billing takes care of these customers.

4.2 Customer lock-in

This is quite obvious, but prepaid billing has wonderful benefits for the merchants! Advance payment by customers signifies a sure shot lock-in of the customers until the end of the payment period, adding significant customer lifetime value. In fact, studies show that prepaid billing options can increase customer value by 94%. That is huge!

This is the reason we often see businesses tag a greater discount for pre-paid subscriptions, than for pay as you go subscriptions!

4.3 Easier financial management

Most businesses, irrespective of their size and scale, find financial management a necessary but painful activity. Prepaid billing makes it easier, due to its reduced number of billing cycles. For example, if a customer who is subscribing for a recurring monthly order pays for 12 months in advance, it is 11 lesser billings to be done by your store. Prepaid billing not just simplifies financial management, but also ensures a healthy cash flow statement!

4.4 Favorable bills receivable timeframe

Prepaid billings, by their very nature, bring in your bills receivables (incoming money/revenue) early. This early inflow of money, often much before your bills payables (your expenses) is a huge cash benefit to your business. At times, based on where your business is based, and the going interest rate applicable there, the yearly cash benefit can be as high as 6-7%.

If you are looking to understand more about memberships, you can reach out to us . Our 24x7x365 available experts will be happy to assist you further.

About the Author

Ria Mahesh

Ria Mahesh

Ria is the co-founder and CEO of Appstle Solutions. Ria is extremely passionate about e-commerce, and building strong products to help merchants in their e-commerce journey. Three things that always catch her interest are technology innovation, human psychology, and traveling.
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