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How to Improve Customer Loyalty in Subscription-Based Businesses - by Gravy.io


There’s no doubt that consumer behaviors and consumption patterns have changed significantly over the past decade. Instead of wandering the mall, today’s teens, Gen Z, and even older generations rely on social media and mobile apps to shop for the latest trends. Subscription-based e-commerce businesses are a major piece of this consumption revolution. Since 2011, subscription-based businesses have grown at a phenomenal rate of 200% annually. It’s safe to say that subscription-based companies are popular among consumers, and for good reason. Who doesn’t love signing up once for a service and then getting the cool gear you signed up to get on a monthly or weekly basis?

In many ways signing up for a subscription box or service is easy and convenient. And, since the pandemic, this drive for ease and convenience has only accelerated: businesses have grown 22.5% in subscribers of their subscription-based services. So, if you’re a burgeoning business owner, you might be interested in pursuing a subscription-based service to meet consumers where they’re at while maximizing your revenue...

But how do you keep your customer base happy and improve customer loyalty?

That is a good question - no, it is the question for subscription-based business owners - and we’ve got a few tips to help guide you in the right direction.

Establish Unique Benefits

Your products or services may be cool or something that people need, like a monthly razor subscription, cosmetics samples subscription box, or cocktail making kit, but you need to establish unique benefits to keep your customers loyal and stay ahead of your competition. Amazon is a great example of establishing excellent benefits with things like two-day shipping, signing up for a credit card to get Amazon reward points to spend on other purchases, and offering deals at Whole Foods. The evidence speaks for itself: their customer base is loyal, so the more unique benefits you can offer, the better.

Create a Community

When people feel like they are a part of something, they will most likely keep using your services. Social media is a great tool to use to help people feel like they are part of a community. Leverage the “FOMO” we all feel whenever we log onto social media - you don’t want to miss out on all the fun your social media friends are having, and neither do your customers and would-be customers. You can encourage people to follow your Instagram, Facebook, or Twitter and post pictures of them using their products with a hashtag or create an exclusive group where people can ask questions and e-meet each other to share a common interest.

Rewards for Referrals & Interactions

Everyone loves a reward. It feels good when you earn something. A way to keep your customers loyal is to give them an incentive for referrals or social interactions. One effective method is to send an email once your customer has received their product soliciting a review - use an incentive like 25% off their next subscription renewal for leaving a review or referring a friend with a unique referral code. You could also include that messaging in the physical packaging of your product with a QR code to take them straight to the review page. Word of mouth (WOM) is one of the most powerful tools for growing your business, so with the right incentive, you could make a big impact. 

Consider Implementing a Points System

Just like people love earning rewards, people also love to earn points. Earning points is especially popular with people who have a competitive streak or who love to play games - you’ve probably heard the term “gamification” used when discussing this kind of marketing strategy. It also makes your customers feel like they are gaining something with every purchase. You could do a point system where for every 20 dollars spent, they get five points, and when they reach one hundred points, they get a free product or a discount. Many brick-and-mortar businesses use this scheme, so there’s no reason subscription-based companies shouldn’t be making use of this system, either. 


Your customers are more likely to keep using your services if their products and services are personalized just for them. Nowadays, many consumers don’t just appreciate personalization, they expect it: According to Salesforce, 63% of consumers expect businesses to know their unique needs and expectations. Many subscription-based companies use quizzes as a form of personalization, like Fabletics at Stitch Fix. This way, you’re not just learning what your customers want in order to tailor the product to their preferences - it may also give you insight into how you should modify and mold your marketing and messaging strategies. Personalization is so important for many customers because when someone gets the exact thing they want or need, they are more likely to stay put.

A Seamless Experience

A way to make your subscription-based business seamless for customers is to create an app. Creating an app can help your users sign up quickly, have all their information in one place, store their payment info safely and conveniently, and give them easy access to their products and orders. When things are seamless and easy, people are more likely to stay because of its conveniences - so make it easy for your customers to stay.

Outstanding Customer Service

Hiring personable and capable customer service representatives will be a critical factor in keeping your customers around. When customers feel like their needs are being listened to, and their problems are being solved easily, they are more likely to stay around, and you avoid customer churn. Consider options like live chat - according to one study, consumers like millennials prefer live chat for customer service over every other communication channel. Bringing your customer service into the 21st century could make all the difference to your business. Another study by Salesforce Research found that 89% of consumers are more likely to make another purchase after a positive customer service experience, and even if the company’s customer service is excellent, 78% of consumers will do business with a company again after a mistake. Every company makes mistakes, so future-proof your customer service strategy with technologies like live chat to ensure you’re providing the best customer service possible to your customers to reduce churn and keep them happy.

Email Marketing

Capturing your customer's email addresses is essential with subscription-based businesses. The information you send them should be informative and helpful or about new products launching and weekly/monthly deals. Relevance and value-add is crucial. Your loyal customers will love hearing about new products dropping or money they can save. But, make sure that you are not spamming their email with tons of information or unimpressive deals that could trigger unsubscribes.

Gaining new customers can be challenging no matter how many years your business has been around, but keeping existing customers can prove to be easier if you do it right. Remember, investing in new customers is between 5 and 25 times more expensive than retaining existing ones. So even though creating a subscription-based service is a tempting option, starting and keeping your customers and reducing churn can be hard sometimes. So, make sure you keep your existing customers loyal to your products or services to keep the sales coming and your business thriving.

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