The D2C Drive: Most Firms Are Offering Subscription Services, But Face Hurdles

As consumers know, companies of all types are racing to provide subscription-based services.

But are they succeeding? They are, to some extent, judging by How Brands Can Succeed in the Subscription Economy, a study from WBR Insights.  

Of the direct-to-consumer companies polled, 63% have grown their subscription customer base in the past 12 months. Email plays a role, for most have found success via direct marketing through email and SMS. 

Moreover, 89% will expand or add subscription services over the next three years. But they face many challenges:  

  • Competing with other subscription services — 61% 
  • Concerting new subscription customers — 36% 
  • Maximizing profitability per customer — 12% 
  • Retaining existing subscription customers — 9% 
  • Fulfillment, logistics or supply chain issues — 9% 



The winning strategies that have helped brands find success? 

  • Direct marketing through email, SMS, and other channels — 76% 
  • Competitive pricing or discounts — 76%
  • Subscription personalization tools for customers — 70% 
  • Unique or exclusive products and offerings — 68% 
  • Influencer and social media marketing—55% 
  • Website optimization for usability, browsing, and sign-up — 37% 
  • Free trials or “freemium” services — 16% 

One caveat: It’s a small sample base. WBR Insights surveyed 100 leaders from brand manufacturers. But all represent firms that sell online and offer subscription models. Of those polled, 52% work in marketing.

With that said, 90% have a website conversion rate optimization (CRO) program. But only 23% say it is performing well for customer acquisition and retention. Another 53% find it somewhat effective, and 20% say it’s ineffective.  

This may be because 23% now use AI or machine learning to optimize and personalize subscription websites for each user—77% do not. 

How can they meet their revenue goals this year? The respondent cite these imperatives:

  • Improving customer experience — 40%
  • Increasing customer loyalty — 26% 
  • Increasing first-time purchases — 25% 
  • Increasing average order value — 9% 

The report was written by Chris Rand, research manager for WB Research, and Mike Rand, content director for Rand & Rand. It was sponsored by Insights, eTail and Intellimize. 



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