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Succesful Subscription box/E-Commerce business looking for advice on taking it to the next level

Discussion in 'General Entrepreneur Discussion' started by ecommerce_lovin, Jul 16, 2017.

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  1. ecommerce_lovin
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    I started a subscription box company in early February. We are currently making 10k-12k a month in sales. We have around 600-700 active subscribers.

    I am here looking for advice on how I can start to "grow hack" and start growing exponentially.

    What we have done and what we have in place:
    1. We mainly focus on Instagram
    2. We have micro influencers posting most days on instagram
    3. We did one paid shoutout will a fairly large youtuber
    4. We advertise on mysubscriptionaddiction
    5. We have email flows set up and segmented
    6. We have Facebook retargeting set-up
    7. We run contests and giveaways via instagram and email

    But I am here today because I am kind of stuck. We have been making the same amount of sales for the last 2-3 months. What can I do to take this business to the next level?

    Some things I think I may try:
    1. Hire an influencer marketing agency to start hiring macro influencers
    2. Hire a Pr firm to start getting us traditional press
    3. Learn Facebook/googleAds marketing
    4. Find other sites to advertise with

    What do you guys think? Thanks in advance for your help!!
     
  2. Cosepreziose
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    Cosepreziose Contributor

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    I think you'd be better off learning lead generation/adwords etc yourself.
    If your business it's on its trail already, you have automated most of the processes and you have time on your hands, you can do a better job than "experts".
    Not that they aren't good, but there are different reasons why they are not "cost efficient", and with some patience, you can get as good as marketing agencies. And save much money.

    My 2 cents here :)
     
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  3. Argue
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    Argue Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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  4. ecommerce_lovin
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    Thanks for your insite. I am going to jump in, to learning lead generation on my own!
     
  5. ecommerce_lovin
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    Thanks for sharing this link!! There are a lot of helpful tips.
     
  6. TeveTorbes
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    TeveTorbes Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Haven't done subscription boxes but experienced in SaaS - the most important number for us has always been churn.

    I'm big on paid media but the road to exponential growth is paved with customer success (making sure your customers get what they want, in the way that they want it). In short, you have to know everything you can about the customers that don't leave and clone them.

    For example:
    Some customers use the product more then others.
    Some customers are cheaper to reach and easier to acquire.
    Some customers are habitual buyers and want upsells, downsells, sidesells, premium memberships, lifetime pricing, etc.
    Some customers are willing and able to be brand advocates and have an audience of their own to share

    Before you fiddle with pricing, copy, ad platforms, you need to create an official Customer Profile so you know who you're selling to before you try to qualify them as a customer. You have to qualify the business before you qualify the prospect.
     
  7. ecommerce_lovin
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    This is great! How do you go about cloning a customer? How can you find the information needed about a customer that you would like to clone?
     
  8. Pedro Henrique
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    Pedro Henrique Contributor Read Millionaire Fastlane

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    Hello.
    I don't know if you mind, but I would like to ask you to reply on my thread about subscription box, it would help me a lot having advice from someone who owns a subscription box business. Thank you !

    My thread: Subscription box business
     
  9. ecommerce_lovin
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    Just commented on your thread! Best of luck.
     
  10. TeveTorbes
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    TeveTorbes Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    So, in short, tools and talking.

    For example, in order of importance for us: 1. Charging more 2. Keeping more customers from churn 3. Acquisition. We know this because we measure, survey, adjust, repeat.

    Talking: literally talking, calling your customers when you have the info and asking them about their experience. We've even gone deeper and offered a free month of service in exchange for honest, anonymous surveys (we promise that their words will never see the light of day (testimonials,etc.). Get creative with it because no one likes to take surveys. Tip: Incentivize it with your service not a gift card, etc.

    Tools as in metrics to track. See David Skok's excellent post on SaaS metrics: http://www.forentrepreneurs.com/saas-metrics-2/

    The usual suspects:
    CAC: the sum of all your sales and marketing expenses over a given duration (including human capital costs) divided by the number of customers acquired in the same time period.
    Churn: dividing the total number of customers who've cancelled over a given period by the number of customers you started with on the first day of that period.
    LTV: it gets complicated for us, so see the post above

    It may be too early for you to calculate LTV, which is even more reason to find out why customers cancel when they do.

    Re: cloning, we've leveraged many tools over time for cohort analysis and creating buyer personas (Profitwell, Baremetrics, ChartMogul, Mrr.io, Hubspot, etc.)
     
    Last edited: Jul 16, 2017
  11. Cosepreziose
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    I have a question for you since you are doing so well :)

    I have been thinking of starting a box subscription company in a food niche.
    My question is: how do you source your products? Being a subscription box you are selling a variety of brands every month.
    So let's say you are selling 5-7 different brands each month, do you buy in bulk from each one? Or is there a special formula for this kinda business?
     
  12. Tim Allen Jr.
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    Just my thoughts on below - you may or may not find them applicable:

    First on your points

    1. Hire an influencer marketing agency to start hiring macro influencers
    - Seems like a lot of money? (not my area) - but could be worth while to test fb/adwords first to gauge conversion
    2. Hire a Pr firm to start getting us traditional press
    - don't know where you are at in your business, but same thing as above
    3. Learn Facebook/googleAds marketing
    - Def. try this - just get started and testing, easy enough to get started and testing
    4. Find other sites to advertise with
    - Yup, look for other decent sizes influences on twitter

    Other Ideas:

    1. Re-engage your current customer base - talk to them and see what other products they might be interested in
    2. Start testing product lines and attacking niche areas where you found your first one.
     
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  13. ecommerce_lovin
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    We actually only sell our brands products. We have a subscription service and retail shop as well. I think I can help with what you are trying to accomplish though. Just shoot me a DM!!
     
  14. ecommerce_lovin
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    Thanks for the response. I do agree that I need to learn FB/google advertising, the only reason I have not proceeded in learning is that the product that I currently sell is less than $20. After expenses, I make about 40% profit. With customer acquisition cost with doing this kind of advertising, I am scared I will cut out all of my profit. What do you think?
     
  15. Charnell
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    Have you thought about offering an incentive to your current customers for referring new customers? You have 600-700 potential brand ambassadors that probably wouldn't mind a free month in return for a new customer for you.

    I guess you'd have to factor in the lifetime value of a customer to see if it is worth it, but from what I've gathered if they stay on board for three months you should be in the clear.
     
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  16. Nam88
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    Hey I am always been interested in subscription business, nice job for the result you archieved. At your level I will indeed look for more customer ( aka lead generation). You will indeed have some expanses at the beginning in order to identify your customer profile. You HAVE to spend money in order to expand your business. After all you are a subscription box service so if you break even or lose some you charge for your service every month no? Many people are making profits with upsell etc .

    Not sure if it's a niche product or broad one.
    Niche scenario one on FB . Go to audience insight look for influencer or niche related site and see if you can use them as targeting interest of facebook. Since you have 600/700 sub you should know by now if they're female or male,age group ( since you use instagram they are younger I guess) and locations. Make a nice ads that resonate with your niche , maybe an unboxing video of your product (they work reallly well).
    You can use leads generation for email or direcly website conversion or link click.

    If it's a broad one, I will upload your existing customer in an email list on fb to see if you can find them. If you have a decent seed 300+ email matching create a lookalike audience ( you tell facebook to find more people similar to the email list that you have). Not sure which country are your customer from and run an ads.

    You don't need a big budget to test 5 $ daily if you want to be cautious. Let it run for 48 hours at least and see your stats (click though rate, link click etc) . You have to install pixel to have the stats on your facebook ads account dashboard.
     
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  17. ecommerce_lovin
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    This is a great idea. We have dabbled in setting up a referral program. I think this is what we will do next. Thanks for the help!
     
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  18. Ashhh
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    Hey ecommerce lovin,

    Congrats on your success so far.

    I would suggest trying to get in talk with a lot of affiliate networks.

    Beauty is a pretty big niche in affiliate marketing and I'm sure there are networks out there that could increase your sales volume.

    Just remember you would generally pay upfront for every conversion/subscriber so you need to have cash ready, especially if we are talking big affiliate networks that can deliver a lot of traffic.

    Also be careful of how your brand is exposed, you might want to set certain conditions for affiliates such as to avoid affiliates abusing other brands to promote your product etc.

    Either way, if you get in talk with some networks I'm sure they could help you through as they are always interested in selling more.
     
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  19. Scot
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    Don't focus on cloning customers, focus on keeping the ones you have. Start tracking your analytics.

    How long does the average customer keep their subscription?

    What percentage of customers only order once and never renew?

    What's the average lifetime value of a customer?

    You can do a lot with these numbers. For example, if you know how long the average customer stays with you and how much they are valued at, you can come up with a reasonable affiliate commission. Ex. Average customer is 4 months, total value is $29.99 x 4 = $119.96. You could offer $39.60 for all affiliate sign ups and still make a 66% return.

    If you have 30% of people never renewing a second time, it's time to find out why. Reach out to them. First, start with genuine contact, personally. Talk to them and see what you could do to improve their experience. Once you have a decent idea what went wrong, put all your non renewals into an automated email funnel to win them back.

    Talk to your existing customers. Ask what they like and what you could improve on.

    Lastly, tripwire offers. Upsell. Find more ways to sell without pushy to your customers.
     
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  20. ecommerce_lovin
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    So much solid information in your post. thanks for taking the time to help me out. I think my next two plays are:

    1. Find an affiliate program with affiliates that can help spread the word about my company, after coming up with what I can afford to pay the affiliates.

    2. Learn how to grow with FB and google advertising.
     
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  21. ZCP
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    Determine your allowed acquisition cost and your LTV for customers.
    Work to improve conversions.
    Upsell.
    Use math to figure out what you can pay to acquire....... or put a % of your budget into acquisitions and cut it off each month when you reach that level of spending..... (this is while you figure out the numbers above).
     
  22. Ashhh
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    I just want to add this in regards to putting your product in one or more affiliate networks.

    It is very important that you track the customers in each category for each affiliate network and preferably even every customer coming through specific affiliate IDs. This is also important if you just have your own affiliate program, as you will notice the difference in traffic 'quality' coming from different affiliates.

    This is often the case because the affiliates are focused on making money for themselves, which makes good sense, so some might incentivize the customers with very aggressive marketing claims or misleading information, so you should be careful and also make sure they don't hide where they are sending traffic from.

    I know it is easier said than done, but you seem successful so far, so I'm sure you will find a way.

    Either way you should feel free to ask questions about setting up affiliate programs or getting in contact with networks, I would gladly contribute where I can.
     
  23. ecommerce_lovin
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    Thanks for the tips! Do you have any tips on affiliate networks that I should look to reach out to?
    I've never dabbled in affiliate marketing, so any leads will help before I jump in and start this.
     
  24. Ashhh
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    Well, I used to mostly promote lead generation and mobile content as an affiliate, but I know a few places you should be able to start and get some traffic.

    There is AffiliaXe, which is an affiliate network with a lot of different kind of offers. I know they got big affiliates there and they have a lot of huge brands as well.

    Then there is a network like Addiliate, as they also have a lot of well known brands. The reason its a good idea to look out for well known brands in an affiliate network, is because then you know that their publishers are not only shady ones that will do everything they can to squeeze more money out of your pocket for the cost of your customer value. Big brands wont risk the reputation damage big affiliates could cause with shady promotion, so you should look for affiliate networks with a few well known brands at least.

    Then there is the more standard affiliate platforms for products, but I do not know if they support subscriptions. This is very go-to platforms like Shareasale or Commission Junction.

    You can take a look at these and see if they can give you what you need.

    Remember to set clear boundaries for allowed promotional methods.
     
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  25. Cosepreziose
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    Check your inbox!! :)