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Subscription Sales: New Loyalty Tool To Amazon-Proof Your Business

Anyone with a good idea for an ecommerce business quickly realizes that the competitive marketplace is brutal. This is true even if you only consider one competitor: Amazon. How do you Amazon-proof your operation so you don’t get crushed under its hypercompetitive approach and unmatched brand and visibility?

One approach a growing number of e-ommerce companies take to differentiate themselves is a subscription-based model, which generates monthly recurring revenue as a direct function of customer retention.

There are varying types of subscription e-commerce businesses, but those that sell curated goods on a monthly basis — think of subscription boxes that offer a monthly subscription of everything from clothing to beauty goods to snack items — have a leg up on differentiating themselves from the likes of Amazon. They have two distinct advantages:

The Ability to Optimize Customer Loyalty
Subscription businesses drive greater customer loyalty compared to companies with one-off transaction models. They have the ability to understand customer preferences and personalize services like no other business can.

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And, as a recurring revenue business, it’s easy to measure loyalty based on the amount of revenue generated each month. This loyalty is critical for businesses to sustain and build out operations while remaining competitive.

There are three basic tactics businesses can take to optimize customer loyalty:

  • Let customers know you’re listening. A seamless process of regular — but not formulaic — responses to customer feedback fosters a culture that breeds loyalty. Listening to and delivering what customers want builds and sustains loyalty.
  • Make your leaders visible and available.  Many consumers believe they receive better customer service from smaller businesses (and an older — 2011 —study, from American Express, supports this thesis) so in this sense it’s beneficial to act like a small business by having an open-door policy for inquiries.
  • Show customers they are appreciated. A thoughtful gift to your most valuable customers lets them know that they are truly appreciated. It’s even more powerful if these gifts are based on their known interests — which you can gauge by analyzing their purchase history.

Loyalty and Recurring Revenue Cultivate Productivity
Loyalty and recurring revenue not only provide regular income, they help boost company productivity. Every member of the organization plays a direct role in optimizing the customer’s experience, and employees are more likely to work hard when they feel they help impact the company’s success.

Businesses that offer unique products on a subscription basis have a distinct ecommerce advantage. There is an opportunity to personalize the products you offer, the payment options you provide, the available fulfilment capabilities, and the post-purchase subscription experience. This personalization fills a niche for customers and allows you to differentiate from the mass approach followed by behemoths such as Amazon.

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