Retaining customers is unique to subscription stores. While driving traffic to a store and converting visitors into buyers is common for all online businesses, retention is an additional aspect that subscription stores must focus on to fully realize their potential. Customers churn for various reasons, and it is the seller's responsibility to try to prevent it. One effective tactic is to simply ask subscribers why they are pausing or canceling their subscriptions and then offer solutions to keep them subscribed.

Ask Your Subscribers Why They Want To Cancel

When a subscriber decides to cancel, sellers can direct them to do so online while capturing their reason for cancellation. Recharge provides custom workflow designs to tailor this retention experience. For instance, if a buyer states that they have too much product, the flow can direct them to simply skip the next shipment rather than cancel the whole subscription. If they find the product too expensive, they can be presented with a discount offer for their next shipment. The possibilities are numerous and limited only by the seller's imagination.

One popular supplements store offers the following options to customers looking to cancel:

1. I already have too much of the product.
2. I’m taking a break.
3. It doesn’t work for me.
4. It is too expensive.
5. I’m going on a vaccation.
6. Other – describe.

Each selection can be met with a counteroffer or suggestion from the store:

1. Rather than cancel, you can just skip the next shipment.
2. Can you tell us why? (This allows them to explain.)
3. Have you tried increasing the dosage?
4. We can offer you a discount for the next six months.
5. We can send product to your vacation address.
6. Please tell us why, and we’ll see if we can make you a special offer.

Offer Rewards to Repeat Customers

Another strategy to combat churn is to offer frequent rewards to repeat customers. For example, redeemable reward points can be given for each repeat order, which can then be used as discounts on future purchases. The theory is that nobody wants to lose what they already have; therefore, it is an effective way to encourage customers to stay subscribed a bit longer.

Implement Winback Strategies

Winback strategies come into play after a customer has already canceled. If a store has information about why the cancellation occurred, they can address those concerns in follow-up emails. When customer concerns are effectively addressed, winback rates can be very high—reportedly up to 35% in some cases. For instance, a store might notify customers that prices have been reduced or that new products have been introduced (such as new coffee flavors).

Avoid Passive Churn

Additionally, there is passive churn, which occurs when a customer’s payment method is no longer valid, and they did not provide a new one. This can happen without the customer’s awareness, so it is crucial that every failed charge attempt is followed by an email notification to them.

In summary, a subscription represents a relationship that begins the moment someone signs up. Like any long-lasting relationship, it needs to be nurtured through loyalty rewards, occasional gifts, and a general display of care for the customer. Many subscription stores offer live customer service — one of my clients refers to it as “Customer happiness service.” When challenges arise in the merchant – customer relationship, it is essential to take steps to get relationship back on track, using churn prevention tools and win-back strategies.

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We often hear about the revolutionary new AI technologies that will transform our lives in the future. But what does this mean for your subscription store today? Without delving into the complexities of machine learning, deep learning, and other AI technologies — topics you can explore elsewhere — let’s look at some practical applications.

Customer Support

The first application that comes to mind is customer support. At the time of this writing, Recharge is introducing AI SMS for customer support. Customers no longer have to sift through documentation or struggle to articulate their issues to store support representatives. AI SMS acts as a powerful resource, learning from thousands of customer interactions to provide quick and effective responses. For instance, if you want to skip your next shipment, you simply type your request as a text message, and Recharge AI will respond with a link to a page where you can easily click the SKIP button. If you're familiar with ChatGPT, AI SMS operates similarly, possessing extensive knowledge about the Recharge platform that surpasses what any human could learn in a reasonable timeframe.

Product Recommendations

Another significant AI application in eCommerce is product recommendations. By analyzing your buyers' order history, AI can identify connections between previously purchased products and suggest the ideal items for upselling or cross-selling at various points in your store—such as in the cart, during checkout, on the order confirmation page, or within the customer portal.

Conversion Rate Optimization

CRO, or conversion rate optimization, aims to maximize the number of visitors to your store who become buyers. Similar to upselling and cross-selling, AI can be utilized to optimize various UI elements of your store and deliver the most effective version to enhance conversion rates. Traditionally, the conversion optimization process involved tedious tweaking and testing, along with human analysis, but AI can execute this much more quickly and efficiently.

Moreover, these AI-driven optimizations can be personalized for each visitor and buyer. While traditional programming methods can achieve similar results, AI does this significantly faster and with a greater impact.

Inventory management

On the backend, we find more applications. Required inventory levels can be seasonal and subject to all kind of factors. AI can learn about your business and try to predict the optimal level you should carry at any time.

AI can significantly enhance inventory management for online stores in several ways:

1. Demand Forecasting:

AI algorithms analyze historical sales data, seasonal trends, and external factors (like holidays or economic conditions) to predict future demand accurately. This helps businesses maintain optimal stock levels, reducing both overstock and stockouts.

2. Automated Inventory Tracking:

AI can automate tracking inventory levels in real-time, ensuring that store owners receive timely alerts when stocks are low. This reduces the likelihood of human error and improves accuracy.

3. Smart Reordering:

With AI, online stores can implement smart reordering systems that automatically generate purchase orders based on predictive analytics. This ensures that inventory is replenished before it runs out.

4. Optimizing Storage Space:

AI can analyze sales patterns and help determine the most efficient way to store products in warehouses. This simplifies picking processes and maximizes storage capacity.

5. Dynamic Pricing:

AI tools can adjust prices dynamically based on inventory levels, demand fluctuations, and competitor pricing, helping to maximize sales and profitability while managing stock levels effectively.

6. Anomaly Detection:

AI can identify anomalies in inventory data, such as unexpected drops in stock levels or discrepancies between reported and actual inventory. This can highlight potential issues like theft or errors in data entry.

7. Supplier Management:

AI can analyze supplier performance and delivery times, helping online stores to negotiate better deals and manage relationships with suppliers more efficiently.

8. Customer Insights:

By assessing customer purchase behavior, AI can provide insights into which products are likely to be in demand, helping businesses to make informed decisions about which items to stock more heavily.

9. Product Lifecycle Management:

AI can monitor the performance and sales of products throughout their lifecycle, providing insights into when items should be discounted, promoted, or phased out.

By incorporating AI into inventory management, online stores can streamline operations, reduce costs, and improve customer satisfaction through better product availability.

Logistics

Efficient delivery of bought goods to your customers can be a mathematical challenge. AI again can help with these problems, where it uncovers inefficiencies or suggest optimal routes.

AI can greatly enhance the shipping processes of online stores in various ways:

1. Optimized Shipping Routes:

AI algorithms can analyze traffic patterns, weather conditions, and historical data to determine the most efficient shipping routes. This reduces delivery times and transportation costs.

2. Dynamic Shipping Pricing:

AI can adjust shipping costs based on various factors such as demand, delivery speed, and package size. This allows online stores to offer competitive shipping rates while maximizing profitability.

3. Predictive Delivery Estimates:

AI can analyze factors that affect delivery times, such as current shipment volumes and carrier performance, to provide more accurate delivery estimates. This helps set realistic expectations for customers.

4. Inventory Synchronization:

AI can ensure that products are shipped from the nearest warehouse or fulfillment center to the customer, reducing shipping time and costs while improving overall efficiency.

5. Automated Labeling and Documentation:

AI can streamline the labeling process by automatically generating shipping labels and customs documentation, reducing the workload for staff and minimizing errors.

6. Real-Time Tracking and Notifications:

AI can facilitate real-time tracking updates, allowing customers and businesses to monitor shipments at every stage. Automated notifications about shipping status keep customers informed.

7. Fraud Detection in Shipping:

AI can analyze shipping data to spot patterns indicative of fraud, such as unusual delivery addresses or order quantities, helping to reduce losses from fraudulent activities.

8. Customer Service Enhancement:

AI-powered chatbots can handle shipping inquiries and complaints, providing instant responses and support to customers. This reduces the burden on customer service teams while improving customer experience.

9. Carrier Rate Comparison:

AI can compare rates and services among multiple carriers to identify the best options for each shipment, ensuring that businesses utilize the most cost-effective shipping solutions.

10. Post-Delivery Analysis:

AI can analyze delivery performance data, including delays, damages, or customer feedback, to identify areas for improvement. This information can inform decision-making for future shipping strategies.

By leveraging AI in shipping processes, online stores can improve efficiency, reduce costs, enhance customer satisfaction, and ultimately gain a competitive edge in the marketplace.

Analytics and Reporting

The vast amounts of customer, order, and fulfillment data are becoming increasingly challenging for humans to analyze. AI, on the other hand, excels at processing big data and uncovering new, hidden patterns that are not easily visible to the human eye.

AI can significantly enhance analytics and reporting for online stores in several impactful ways:

1. Data Collection and Integration:

AI can automate the collection of data from various sources—such as sales, customer interactions, and website activity—integrating it into a single platform for comprehensive analysis. This reduces manual effort and increases accuracy.

2. Advanced Insights and Trends:

AI algorithms can identify patterns and trends in data that may not be immediately obvious through traditional analysis methods. This helps businesses understand customer behavior and preferences more deeply.

3. Predictive Analytics:

AI can leverage historical data to predict future trends, sales, and customer behaviors. This allows online stores to make informed decisions about inventory management, marketing strategies, and resource allocation.

4. Customer Segmentation:

AI can analyze customer data to create detailed segments based on behavior, preferences, and demographics. This enables tailored marketing campaigns and product recommendations, increasing engagement and conversion rates.

5. Performance Tracking:

AI can track key performance indicators (KPIs) in real-time, providing instant feedback on marketing campaigns, sales performance, and website traffic. This allows for prompt adjustments to strategies.

6. Automated Reporting:

AI can generate automated reports that compile relevant metrics and insights, saving time and ensuring consistent updates for decision-makers. Reports can be customized to focus on specific areas of interest.

7. Natural Language Processing (NLP):

AI leveraging NLP can enable users to query data using plain language, making it easier for non-technical users to access insights without needing advanced analytical skills.

8. Anomaly Detection:

AI can identify unusual patterns or anomalies in data, such as sudden spikes in sales or unexpected drops in traffic. This allows businesses to respond quickly to potential issues or opportunities.

9. Sentiment Analysis:

AI can analyze customer feedback from various sources, such as reviews and social media, to gauge customer sentiment toward products and the brand. This information helps refine marketing and product strategies.

10. Real-Time Performance Optimization:

AI can provide actionable recommendations in real-time based on ongoing data analysis. This helps businesses quickly adapt to changing market conditions or customer preferences.

By incorporating AI into analytics and reporting, online stores can enhance their decision-making processes, improve operational efficiency, and ultimately drive better business outcomes.

Finding Answers

One of the most obvious uses of AI, although not yet adopted by everyone, is answer-finding. ChatGPT can provide instructions and answers to virtually any question you input. It is truly an amazing resource that can save you considerable time.

Design and Development

AI is also making its mark in software and website development. It can generate stunning and creative images from simple prompts. For example, if you need a picture of a cat playing a guitar, AI can produce that within seconds.

Furthermore, developers are leveraging AI as well. Code can be generated in any programming language with just a few straightforward prompts. While a developer is still necessary to ensure that the code functions correctly in a larger context and meets its intended purpose, AI is an excellent tool for idea generation and for accelerating the process of writing and testing computer code.

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A CEO’s Take on Subscription eCommerce

The CEO of Carthook, a popular Shopify plugin that enables stores to offer upsells at checkout, previously ran an online store business. He famously stated, “If I were starting my online store again, I would insist with my partners that we sell everything as a subscription.”

The Advantages of Subscriptions

Subscriptions provide many advantages: a steady revenue stream, reduced advertising costs, and higher lifetime value (LTV) per customer. They are a retailer’s dream. Although not all products are suitable for subscription, many are. Even seemingly non-obvious products, such as fashion, can sometimes be transitioned into subscription models. For example, some companies send customers curated boxes each month—products they can keep or return—upon paying a fixed monthly fee. Essentials like medications, cleaning supplies, personal hygiene products, coffee, and other consumables that are replenished regularly are also prime candidates for subscriptions.

Subscription Complexity: Simple vs. Advanced

Subscription offerings can range from simple to complex. Some products can be offered as either one-time or subscription purchases, often with a discount. For instance, toothpaste can be a simple subscription: a checkbox plus a dropdown for delivery frequency. Apps like Recharge Payments and Bold, which integrate with Shopify, can set up these simple subscriptions quickly.

More complex subscriptions may involve customization. For example, a Keurig coffee maker allows customers to create personalized boxes with different coffee flavors. Customizing and editing these boxes requires additional development, but many companies find the investment worthwhile, as it significantly increases sales of coffee pods.

Strategies to Increase Subscription Revenue

Unique strategies can further boost subscription revenue. For example, since most subscribers cancel within three months or less, offering prepayment options at a 20% discount for the entire year can encourage longer retention. Another effective tactic is trial-to-subscription conversion: allowing customers to purchase a discounted sample, which, if they don’t cancel, automatically converts to a full-priced recurring subscription.

Why Subscriptions Drive Higher Revenue

In summary, online subscription stores often generate higher revenue due to lower customer acquisition costs, increased LTV, and more predictable cash flow.

For more information or tailored advice for your business, feel free to reach out here.

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My friends starting in eCommerce often wonder whether they should start on a marketplace like Amazon or they should open their own independent store on Shopify or other such platform. This is not an easy question to answer though but I'll try.

Why People Think Amazon Is Easier

Main reason I often hear why Amazon is better than an independent store is that you don't have to worry about your own traffic because millions of buyers are already visiting Amazon website every day. That traffic to anyone's store is guaranteed is not true - buyers on Amazon search for products in very similar way they search for things on Google, which means that if you don't have good Amazon SEO your products will not show to visitors. Amazon SEO is something that every store owner is responsible for themselves. In same way there is an Amazon PPC (Pay-Per-Click), equivalent to Google AdWords, which helps with showing up higher in search results but is not free.

The Downsides of Selling on Amazon

Now for the bad parts of Amazon. Selling fees are high - between 8 and 15% of revenue. Product reviews are hard to get since Amazon is cracking down on any sponsored reviews. They have their own program for professional sellers called Vine but it is not free. Competition is brutal - when your product shows up many other sellers with same or similar products show up as well. You are not the store, Amazon is. You just supply products. Branding is practically impossible. All products pages look more or less the same for everyone. You don't have a blog. You pay for everything and if you don't play by the rules you will be suspended.

Shopify: Built for Brand Builders

On the other hand Shopify is built for branding. Pretty much everything can be changed to your colors and style. Sales fees are low. There is no reviews policy forced on you by Shopify. You are the store and no one even has to know that you are on Shopify. You still has to drive your own traffic but methods are same as on Amazon. You get your blog.

Amazon Has Its Strengths Too

Now lets flip the table and talk about Amazon good parts. It is easy to start on Amazon. Open an account, upload some products and voila you are in business. Amazon has an FBA program that can do all fulfillment of orders for you including storing your inventory, packaging, shipping, and returns. It cost something but if you don't have time to deal with packaging and shipping it is a godsend. Prime program, owned by 100 million Americans, which includes 2-day free shipping for your FBA products is among the benefits of FBA program. If you sell on Amazon, people almost automatically trust your store just because it is on Amazon - until you get some bad reviews, so don't get those.

Shopify Puts You in Control—So It's Smart To Get Help In The Beginning

On Shopify, you have to establish your own trust. Being on Shopify does not help to the same extent regarding trust. Shopify does not have any similar program to FBA so your are responsible for your own fulfillment or find another third party provider. Shipping is also on you. So to start without some help it may be a bit more difficult starting on Shopify because no one tells you all the elements of eCommerce that you need.

Many large or branded sellers today however have both - the Amazon account and their own store. Why make a decision when both have their pluses and minuses. Shopify store even comes with store management features where you can easily open account, export products, and manage fulfillment on both Shopify and Amazon in the same place.

Final Thoughts: Use the Platform That Fits Your Goals

In summary, I think that Amazon and Shopify are both excellent platforms but they serve slightly different use cases. Shopify, which allows for high level of visual customization is an excellent choice when branding is very important. Amazon, on the other hand, is a self contained environment, and may be in some easier to setup for the new shop owner.

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Common Issues Seen in Struggling Stores

There is a sizable group of new online store owners who struggle to get their sales of the ground. I looked at hundreds of websites and they mostly have these issues in common.

1. Amateur graphic design

It takes skill and talent to make something look nice, balanced, and professional. Most of us can't even see it but we can all feel it. Not everyone was born with talent to make things look nice. If you can't see it then you can't make it. Many sites I look at have a home made feel to their store. What this does is it register in visitors mind as an amateur store and it immediately gets a low rating on trust scale. It really pays off to engage a designer to tidy up your store. It does not need to be expensive or extravagant - just make it look clean and professional.

2. Many stores lack essential product descriptions

When I see a hoodie, no matter how nice, and it costs same as similar one that I can but at Macy's, but I can't see what it is made off, I'll pass. Products need to be sold, and pretty images and only some basic info are in most cases just not enough.

3. Shipping policy is either not listed or it isn't attractive

It is a fact that drop-shippers from Ali Express and other overseas suppliers are at a disadvantage because many people want their products much faster. But it is not the end of the world as long as it can be compensated with good prices, original products, and everything else I talk about here.

4. Products have no reviews

Not much you can do here if you want to stay honest. Its a chicken and egg problem. No reviews no sales. Its a disadvantage but not a store killer. Eventually you will overcome it and get sales and reviews.

5. Store lacks a concept

You need a strong case to establish yourself on the block. If you just sell stuff it is very hard life on the web. Amazon and everyone else is just one click away. You need to be different. Find an audience and serve it better than everyone else does. Being a generalist, you can't focus well on everyone's needs because there are too many and too different. Sharpen your spear and focus on your niche.

6. Store lacks confidence

Like in dating you can't sell if you don't believe in your product. This comes across in anemic messages, faint product descriptions, lack of original content.

7. No Strong Reason to Buy From You

All that being said, as new store owner you still have a problem. I need a very good reason to buy from a new store and enter my billing and shipping information. This is a specially strong obstacle if I am visiting your store on my mobile device. Without giving me a good reason to buy from you, I may just click over to Amazon and check if they have it and order it with one click.

I could probably find more reasons why people don't buy from your new store, but these are most common. It is not easy to successfully launch a new store on the web and start making sales. Making some advertising, building a store, and listing some products that you like or think others will like is just the beginning. You may need to do some more work in marketing, setup, and making it look nice at be sure that you don't make mistakes from above.

The post Good traffic, No sales! first appeared on SELLTEK.