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Phillip Akhzar | April 10, 2018 | 6 Minutes Read
You want to know how to start a subscription box company. Why wouldn’t you? According to Forbes, subscription boxes are exploding, growing by 800% since 2014. You would be crazy not to want a piece of that action!
The goal of any subscription box company is to surprise and delight customers with curated products they are passionate about. Customers are buying because they trust that your judgments will bring new and delightful products into their life.
But the challenge for most new companies isn’t curating delightful products, at least not at first. After all, founders start the subscription business because they are passionate about the products they are curating and want to share them with others. It’s the step after that: creating a memorable experience.
You can try and create new offerings and advertisements to grow your customer base without focusing on customer retention. This strategy has worked for many people in the past, but often fails to create lasting businesses.
Growing fast enough to replace churn and continue growing on top of that is grueling and expensive process. It's much more effective to focus on retaining existing customers.
You don’t need to buy your customer’s loyalty but you need to earn it. This takes a serious amount of creative thought, attention to detail, and the ability to empathize with them. These will all help you stand out in a crowded market.
Today we’re going to walk through examples of 3 of the best types of customer loyalty strategies we have seen.
Handwritten letters are hands down our favorite way to build customer loyalty because the moment you talk about handwritten; you immediately rule out 99.99% of your competition being willing to imitate you. In fact, you’re probably reading this and thinking “Ok, what’s the next one? I’m not going to make write a note to every customer…”
But hear us out, we’re not suggesting that you write a novel to everyone that signs up. We’re talking about sitting down for an hour to create a few thoughtful templates that will resonate with your target audience.
Talk about your passion and how it relates to why you first want to curate items for others. Most importantly, be human. This is coming from you! It’s not supposed to be from a cold faceless company but rather one human to another that share a passion for a particular niche. You need to convey this shared passion.
This person shares a passion with you to a degree that they want to pay you every single month. This gesture makes sure they know that it is mutual.
Even once things take really take off, spending an extra few hours writing to the new subscribers only is a low-cost high-reward way to gain insane customer loyalty.
It’s all unexpected! That’s the entire idea of the curated subscription box model! We knew you were thinking that so we just came out and said it. But we’re not referring to items fitting the core theme.
We’re talking about something that strikes emotion, and yet again, further humanizes you. Noticing a theme here?
Here are the 3 absolutely critical characteristics for your bonus item:
Let’s take a look at an example.
The theme of your curated box is single-task kitchen gadgets. You already shared the story of how you got started in the signup letter and let the customer know that you have a passion for kitchen gadgets that simply work because they make cooking fun. To further humanize your handwritten letter you add a line saying that your favorite tailgating recipe is a buffalo dip and include it in the letter.
In future boxes, to add a layer of depth to your story you include a parsley seed packet as a bonus and inform them of your second passion for gardening. Say you included them as a bonus because you wanted to share how great parsley is for classing up that buffalo dip recipe you gave them previously.
It should be no surprise that presentation and unboxing of the subscription box are highly valued.
As Jamie Welsh says “You can have a fantastic brand, but if presented in an unimpressive way, it gets lost in the mix and people won't take notice. Your design is an opportunity to humanize the story of your brand, creating an experience people want to interact with and building brand loyalty.”
You can read about all the different kinds of packaging here, so I won’t be going into detail on them. I do however want to discuss when you should be using branded packaging.
I don’t say that because you can get custom boxes from Arka. In fact, if you are just starting out you shouldn't buy our digitally printed boxes. I repeat, do not go out and just buy custom printed boxes before you have customers.
You should start thinking about ordering custom boxes when you have established customers but you should start customizing your packaging immediately. Custom subscription boxes can be created by hand for well under $50 total cost.
Here are the 2 bootstrap ways to customize your subscription boxes:
A stamp can be customized with your logo for about $20. Black ink on a kraft or white RELF mailer looks great and can create an impression that you simply can’t achieve from stock unprinted boxes.
Stickers can be ordered for around $40. Keep it clean but don’t forget the goal is to make an impression while not breaking the budget. This takes very little time to apply to each box but gives you immediate brand recognition when the box arrives.
Utilizing a $20 custom stamp with the company logo and a ribbon matching the season will add customization and flare to an otherwise blank and cold box. It’s all the little details that add up to create the unboxing experience.
Once you have returning customers and are ready to scale your operations you should start looking at the value of having a company print the boxes for you.