You either love them or hate them. Subscriptions are everywhere.
Regardless if subscriptions are something you personally like to take part in… They are a GREAT business model and can add value to both you and your customer.
What is a subscription-based business model?
A subscription-based business model is a business that charges a recurring fee (either monthly or yearly) for a customer to have access to a service or product.
Since many cannabis businesses offer products that consumers integrate into their daily regimen (i.e. tincture, gummies), it benefits customers to offer a subscription service.
A subscription option helps your customers get your product more easily and consistently, helping you to develop a steady and predictable business.
What are the advantages of a subscription-based pricing model?
Simplify Your Business
Subscription services are convenient for customers. When you’re offering a product that your customer needs every month, it’s easy for them to subscribe and not have to worry about making a monthly purchase.
If your product is a CBD tincture that your customer uses for pain relief, it will bring them peace of mind knowing that it will just arrive at their doorstep each month. Customers can easily fit the subscription into their monthly budget.
As a business, you save time and energy with order generation. You can plan for when the order needs to be packaged and go out while predicting your revenue.
Attracts More Customers
With a ton of other brands out there, you have to stand out, and offering a subscription service with a discount might be that extra push a customer needs to go with your brand instead of a competitors.
A higher price is a barrier to attaining customers. Customers are much more likely to purchase something with a lower price tag. Even if they’re getting just a small discount, they’re more likely to purchase knowing that they are getting it for cheaper than the listed price.
And if customers know they’re going to continue to buy the product, why wouldn’t they sign up for a subscription which offers it to them for cheaper?
A lower price lessons the thought that goes into making the purchase.
Build New Marketing Opportunities
You can expect about a $42 dollar return on every $1 you spend on email marketing. And every month, when your customer’s order is confirmed, you send them an email confirmation that goes straight to their primary inbox. The open rate for an email confirmation is about 70%, (whereas the open rate for an average email is 15%-25%).
That means, each month, you have a direct opportunity to build a stronger relationship, up-sell, and cross-sell.
And once customers have made your subscription a part of their monthly expenses, they’re more likely to see spending a little more money with you as affordable.
So while you keep your customer up-to-date on their order, you can introduce them to new products, helpful blog content, or your loyalty program.
This is a huge marketing opportunity! Make the most of it.
Improve your Return on Customer Acquisition Costs
Subscription services help with consistent customer retention. That means you can save on customer acquisition costs.
And since they’re subscribed at a discounted rate, they’re much more likely to stay.
While the length of time a customer will stay subscribed varies, you can use marketing efforts to help ensure they stay subscribed.
Create Predictable Revenue and Refine Cash Flow Management
When you offer a subscription option, revenue becomes more predictable.
Without a subscription option, it can be hard to predict if a customer made a one-time purchase, or if they plan to return for more. But when someone subscribes, you can guarantee they will make another purchase the next month.
And while you’re losing a small amount of money on each individual sale with a discounted subscription, you are ensuring the customer will be back to buy more and bring in more revenue long-term.
You can more accurately estimate how much revenue you’re going to bring in the following month, and the month after that.
So you can better plan how you allocate your money and the best way to market.
Curious how to Create a Subscription Service on WordPress?
We can help! We will implement a payment option on your CannaPlanners-built WordPress website for customers to choose subscription pricing.
We make the option clear for customers and easy for you.
If you’re saying Yes! This is what I need! — fill out the form below.
If you’re saying Eh, not sure, I have a few questions — fill out the form below.
The word is out! Subscription service trends are not trends. Consumer subscription services are here to stay. *Victory dance*
We look forward to helping you get your product out into the world consistently.