Oh the subscription? I found it at the checkout
There's a persistent myth in the DTC world that launching a subscription offering automatically transforms your entire business model. We've all heard the promises: better customer relationships, predictable inventory, lower acquisition costs, and a treasure trove of first-party data. But after years of helping brands optimise their retention strategies, we're of a strong opinion that subscription isn't a business model – it's simply a checkout option.
The Reality Behind the Subscription Promise
Let's look at what actually happens when brands adopt subscriptions. While many DTC founders dream of predictable revenue and lifetime loyalty, the reality often proves more complex.
Subscription customers aren't inherently more loyal or valuable – they're just customers who prefer a different way to pay.
Take one of our beauty brand partners. They initially believed adding a subscription option would revolutionise their customer relationships. But when we analysed their data, we found that their most valuable customers weren't necessarily subscribers. Instead, their highest lifetime value came from customers who mixed one-off purchases with occasional subscriptions, choosing what worked best for their needs at different times.
Why Subscription Isn't a Magic Solution
The traditional subscription pitch often highlights several supposed advantages. Let's examine why these benefits might not be as straightforward as they seem:
Customer Relationships
The depth of your customer relationships doesn't depend on their payment schedule. It depends on product quality, customer service, and how well you understand and meet their needs. Some of our most successful clients have built incredible customer loyalty without pushing subscriptions at all.
Customer Acquisition Costs
Here's a truth that might surprise you: acquiring subscription customers often costs more, not less. Why? Because you're asking for a bigger commitment upfront. Customers burned by previous subscription experiences are increasingly wary, requiring more convincing – and more marketing spend – to convert.
Customer Data
While subscriptions can provide consistent data, one-off purchasers often give you equally valuable insights. The key isn't how often they buy, but how well you collect and use the data from every interaction.
The Real Power of Choice
The most successful brands we work with understand that different customers have different needs. Some love the convenience of automatic reordering. Others, perhaps burned by less scrupulous subscription services, prefer the control of manual purchases. Many switch between the two depending on their circumstances.
A premium skincare brand we work with got this right. Instead of pushing everyone toward subscriptions, they presented it as one of several convenient shopping options.
The result? Higher customer satisfaction across both subscription and one-off purchasers as well as higher overall retention rates than when they aggressively promoted subscriptions.
What Really Drives Customer Loyalty?
The fundamental drivers of customer loyalty haven't changed:
Product quality that consistently meets expectations
Outstanding customer service at every touchpoint
Clear, honest communication about products and policies
Flexibility in how customers can engage with your brand
Recognition and rewards for customer loyalty, regardless of purchase method
The Smart Approach to Subscriptions
Instead of viewing subscriptions as a transformative business model, consider them part of a flexible purchasing strategy. Here's what works:
Offer subscriptions as a convenience, not a pressure tactic
Make it easy to modify or pause subscriptions
Allow customers to mix subscription and one-off purchases
Use the same retention strategies across all customer types
Focus on product quality and customer service as your true differentiators
Moving Forward
The most successful DTC brands understand that sustainable growth comes from delighting customers, not from how those customers choose to pay. Whether through subscriptions, one-off purchases, or a mix of both, the key is building a business that customers want to return to – on their own terms.
By treating subscription as just another checkout option rather than a revolutionary business model, you free yourself to focus on what really matters: creating exceptional products and experiences that keep customers coming back, regardless of how they choose to pay.