Want to ramp up subscribers for your D2C business and reduce churn? Email marketing is the best weapon in your arsenal for achieving these goals.
In this guide, we’ll cover the core email automation every store needs to set up if they’re serious about improving their subscription business.
Subscriptions in eCommerce are big business.
Depending on where you look online, up to 57% of consumers have an active subscription at any time.
It is no surprise to see that the subscription model is gaining traction. With CAC (customer acquisition cost) soaring, subscription plans can provide a stable base of MRR (monthly recurring revenue) for brands that help with cash flow and increase LTV (lifetime value).
And it’s not just fast moving consumer goods (FMCG) brands benefiting from subscriptions - even fashion, apparel, home and the unlikeliest of industries have crowded into the space.
Whatever industry you’re in, this guide will help you to leverage email marketing to increase the number of subscribers you have and reduce churn.
We’ve tested these exact principles across multiple verticals with our clients and seen impressive results.
This is probably because email is a key communication channel for managing subscriptions: people turn there to look for billing updates, shipping notifications, and yes, cancel their subscriptions.
Let’s examine the role that email can play in subscriptions and see how you can leverage it effectively.
Goal 1: Boost active subscriptions
It is no secret that most brands would love to get their existing customers onto subscriptions. If they achieve this, they can reduce retargeting costs to these segments of buyers and alleviate the need to send campaigns encouraging repeat purchases to this audience.
This guide will show you how to use email to nurture one-time buyers into subscribers at the right time.
Goal 2: Reduce churn
Nothing is more discouraging for a business than a subscription model who’s customers lose interest in it.
The problem is that most brands want to make it difficult to cancel subscriptions and force customers to stay subscribed. This is wrong - making it difficult to cancel can inadvertently come back to bite you in the ass as consumers express their displeasure at being charged unwillingly.
You may think you’re being clever and increasing Lifetime Value by hiding this, but the reality is you’re tarnishing your brand’s image and creating a negative feedback loop to customer service.
This guide will show you how to leverage email to minimise churn but also save your customer service team from being utterly demoralised.
Goal 3: Reactivate Subscriptions
Most brands make the mistake of thinking that customers who unsubscribe are long gone.
While it’s true that the majority of cancellations result in churn, it’s not a lost cause by any means. A lot of subscribers cancel because they feel as though the subscription is rigid (which ties in to my previous points on reducing churn).
Another consideration for brands is that cancelling a subscription is a negative intent signal from consumers and the brand’s reputation is on the line. Pushing a customer into a discount ladder at this stage is likely to just irritate them further; it’s crucial you capture the reason for cancellation and then put the customer on the most appropriate journey to help restore the credibility of your brand and potentially (if you’re tactful), lead to reactivation in the future.
The worst case scenario is that consumers leave with a negative impression of your brand when they cancel. This guide will at least help you to salvage your credibility and create a feedback loop to your product team whereby churn can be reduced and the subscription model improved for future customers.
Email Flows to Achieve These Goals
The following flows have been used across multiple industries by our team to achieve the aforementioned goals, including: omega-3 supplements, personalised pet nutrition, deodorant, and more.
Whilst these examples are definitely FMCG-items, you can apply the same methodology to other products (including box subscriptions) with some slight tweaks in timelines depending on what your data tells you.
NOTE: we’re using a combination of Klaviyo & ReCharge to demonstrate the examples below. I appreciate not everybody is using this combination of software, but again, the principles apply, and assuming you have the correct integrations in place, this methodology can be carried out with any software selection.
Flow 1: Post-Purchase Upsell to Subscription
Goal: Boost subscriptions
The logic behind this flow is simple: a customer places an order for the first time, and around the time it comes to replenishment, you try to upsell them to your subscription model.
Let’s take deodorant as an example. The product lasts roughly 30 days. Around day 25, you’d want to include a call-to-action to encourage the customer to subscribe and save.
Here’s an example of how this flow would be configured in Klaviyo:
This flow could be amalgamated into a post-purchase flow for first-time buyers, or set up as standalone purely focused on the objective of increasing subscribers.
It’s important to make sure that customers who do make a single-time purchase for the first time understand the value of the product they purchased and are taught how to get the most out of it. Otherwise, your CTA to subscribe may fall on deaf ears and lack relevancy.
Advanced strategies: you may wish to exclude customers who leave negative reviews from receiving this upsell as it may not reflect positively on your brand.
If you have an integration that collects an NPS (net promoter score) with software such as Omniconvert, for example, you can exclude customers from receiving this flow who scored you <8 by using conditional logic around the 14-day mark (or whenever you set the NPS reading up).
The same logic applies to review software. If you have an integration with Okendo, Yotpo or Stamped, you can filter customers out from receiving this upsell and focus instead on resolving the pain points they experienced to preserve the brand integrity.
Here’s an example of how this may work:
(NOTE: the additional condition would be ‘Score is higher than 4’ so that anybody who scores lower than this wouldn’t be sent the upsell. If you wanted to get extremely granular, you can - and should - set up a separate flow to deal with negative reviews with customer support).
Lastly, while it may not be an ‘advanced strategy’ so to speak, you can also attempt to nurture customers with a discount incentive to start their subscription. I recommend using the dynamic coupons in Klaviyo if so, to make sure they’re not open to abuse and have time-sensitivity attached to them.
Flow 2: Subscription Abandoned Cart
Goal: Boost Subscriptions
In the instance of Shopify, Recharge utilises its own cart and checkout, outside of the standard Shopify cart and checkout.
When a customer purchases a subscription, they are directed to the Recharge cart, where the intention is for them to checkout. Much as is the case with the standard Shopify cart/checkout process, if a customer exits the website, or does not complete the purchase, ReCharge captures the customer event data and feeds that back through the ReCharge API to Klaviyo. An example can be seen here:
Inside Klaviyo, the theoretical framework to set up and administer an abandoned cart flow remains logically the same. You can create a customised automated email journey specifically for those customers who have abandoned their subscription purchase, in a bid to win them back.
Here’s an example of how you would want to set the trigger and flow filters up inside Klaviyo:
The major difference being that the flow trigger inside Klaviyo would be based around the API ‘Started Checkout’ which is denoted by the API cog icon, rather than the Shopify icon inside Klaviyo (see above). This will then pull in the customer event data fed via Recharge on customers who started to checkout with a subscription purchase and did not, for one reason or another, complete their subscription purchase.
Following this, you can engineer your automated messaging to encourage them, win them back, and even personalise their journey and messaging down to the actual product that they held in their cart before abandoning their subscription, to really drive home a unique & customised experience.
Advanced strategies: a conditional split may be used to separate new VS returning customers and alter the messaging accordingly.
Returning customers who previously cancelled their subscriptions may have objections that need to be overcome. In this instance, I’d recommend looking at your data and examining the feedback loop from Flow 4 in this guide to include some key information on the most salient points to include in order to alleviate concerns.
Flow 3: Post-Subscription Onboarding Flow
Goal: Reduce Churn
So you’ve acquired a new subscriber - great news. But the hard work doesn’t stop there. In fact, it’s only just begun.
Regardless of whether you’re selling FMCG or more novelty-type subscriptions like boxes, it’s crucial to ensure that the customer values their purchase and uses it as fast as possible.
If you’re selling a consumable, in particular, the customer needs to have used the product to such an extent that it warrants the subscription replenishing it on autopilot. If they haven’t been onboarded correctly, the chances of churn increase.
If you’re selling a box, the likelihood of churn is probably going to be down to a lack of customisation over subscription options (i.e. 1-month, 3-month, etc.). This is because it’s a novelty purchase and not an essential, so giving the customer maximum flexibility (and awareness of it) during this onboarding period is imperative.
In both scenarios, it’s essential to set up the following concepts in this flow:
- Eliminate buyers remorse
- Deliver product education as quickly as possible to ensure customer satisfaction
- Provide awareness of flexibility over subscription so the customer doesn’t feel “locked in” to the model and can tailor it specifically to their needs
We’ll cover the last point in the next flow more in-depth.
This is a fairly simple flow to set up inside Klaviyo with the ReCharge integration:
You would then proceed to map out the customer journey and build the above email concepts into this flow and choose your times between email accordingly.
It is important to go in early with the “Eliminate Buyers Remorse” concept so that people understand how their subscription works right off the bat.
I then like to work in product-education related to the specific SKU so that the customer is onboarded correctly and is getting the most out of their recent purchase.
Advanced Strategies: If you want to get more granular with a product-specific flow, you can simply identify the SKU and insert that into the Flow Filter at a master level. Otherwise, the above will suffice.
Flow 4: Order upcoming on Subscription
Goal: Reduce Churn
In my experience working with subscription brands, the overwhelming majority of customers cancel their subscriptions simply because they weren’t aware they could modify them or had no need for their imminent order.
And while customisation can certainly circumvent these issues and prevent churn (i.e. switching from 30 days to 90 day replenishment), it should all start with making sure customers are aware when they’re about to be charged and their order processed for shipment.
I’ve sometimes had resistance to this concept as brands claim you’re hurting cash flow by doing this and monthly revenue. This is nonsense - you cannot force somebody to keep a subscription if they have no need for it or no longer desire it. At best you generate a customer service headache; at worst you lose customers and harm your brand’s reputation and damage CLV potential.
The best way to tackle this and prevent churn is to be transparent with the customer and notify them when an order is about to be processed.
This is a positive touch point for your brand: it prevents customer service issues, keeps customers engaged and shows that you care about their experience.
All of these are desirable goals that will reduce churn.
If you have flexibility built into your subscription model, now is also the time to showcase that element and provide the customer with options to modify their subscription.
At the time of writing, this feature/integration was in beta from ReCharge to Klaviyo (called ‘ReCharge Quick Actions’). It may have been rolled out fully by the time you read this.
Regardless, this is how the trigger looks like inside Klaviyo:
You can customize the time this email is sent out from within Klaviyo by speaking to ReCharge directly.
For the sake of simplicity, 24-48 hours pre-charge is sufficient for most customers.
This flow only needs to contain one email and present the customer with their options for modification. There are no advanced strategies necessary here to expand upon.
Flow 5: Cancelled Subscription Winback Flow
Goal: Reactive Subscriptions
Unfortunately, people do cancel subscriptions. And most brands give up there - which is a mistake.
On a psychological level, a cancelled subscription is damaging to the image of your brand. When a customer cancels, they’re telling you that they don’t value your product or service.
This is where you need to focus your energy on with this flow.
Most people falsely assume that the way to tackle this flow is with a discount ladder. This is extremely naive and can further erode trust; if you’re running a subscribe-and-save model, how much more margin can you give away? It’s not about price at some point - it’s about level of service and product quality.
Your goal with cancelled subscriptions should primarily be two-fold:
- To collate data that creates a feedback loop to the product and marketing teams (i.e. what is the reason somebody cancelled? Was it price, quality of product, disengaged customers, etc? These data points should be used to help improve positioning and reduce churn going forward for other customers)
- To salvage your brand image in the mind of the consumer
A discount ladder achieves neither of these and in my experience, is woefully ineffective anyway.
Depending on what your subscription is and what you’re selling, I like to create a flow that leverages the following concepts (in this order):
- Finds out cancellation reason via buttons in Klaviyo and collate data inside the ESP to inform product and marketing team
- Send the customer a unique email based on cancellation reason that thanks them for their feedback and explains, for example, why the product may be perceived as highly priced (quality of ingredients, etc)
- Reactivation attempt further down the funnel (if appropriate and timely)
This is a very high-level overview and every business is unique here and depending on what you’re selling, you may have a multitude of reasons people cancel.
Here’s an example of how this might be structured within Klaviyo or your ESP (NOTE: in this example, the cancellation data is captured natively within the ReCharge subscription platform. You’ll need to check with your subscription software to ensure this event data syncs with your ESP accordingly):
To set this flow up in Klaviyo, you’ll simply want to use the Cancelled Subscription event like so:
You’ll want to make sure that the Flow Filter ensures that the customer doesn’t have any additional ReCharge Subscriptions (which is why we use the logic above) to prevent customers from receiving this flow who have multiple active subscriptions from receiving it.
Advanced Strategy: The Trigger Filters in the above example is just to show that it is possible to pass over that event data to Klaviyo from ReCharge and create more bespoke flows if necessary - this would certainly fall under the “Advanced Strategy” realm.
If you have the capacity to go in from customer service and initiate a conversation with your customers here, that’s also another option. Don’t underestimate the effectiveness of a plain text email from time to time that simply asks them for feedback.
Email marketing is the most powerful tool at your disposal for increasing subscriptions for D2C businesses and reducing churn.
The goals are clear: improve the customer experience and create an internal feedback loop and you’ll achieve both of these goals.
Implement the flows in this guide as a minimum and contact us if you’re looking for even more sophistication.