Start Simple with Your Subscription Business

In the beginning, it can be tempting to want to build the best customer experience with the best tools and best strategies to capture more dollars from your customers. it is a mistake to tackle these complex operational tasks early on in your business. Why?

There’s an old adage that argues the real test of intelligence isn’t in building something complex, but in keeping things simple. When building something both simple and of high quality, it requires one to not only think critically, but also to think efficiently. The truth of this lesson is evident across public and private enterprise, and it too holds true when starting your subscription business.

In the beginning, it can be tempting to want to build the best customer experience with the best tools and best strategies to capture more dollars from your customers. The most basic questions presented when launching your business will inevitably inspire big thinking. Consider these:

  • How many products (box types/sizes) should I offer?
  • Do I ship immediately, or once or more a month?
  • What type of billing/rebilling schedules should I offer?
  • Should I provide configurations/customization for customers?
  • What about gifts and extended gift subscriptions?
  • Do I provide eCommerce options for customers, like flash deals?
  • If so, do I carry inventory?

First, know your business may very well eventually need some of these things, like an online shop or multiple forms of subscriptions and the option to customize for customers. However, it is a mistake to tackle these complex operational tasks early on in your business. Why?

  1. In the early months, you have little data to demonstrate what your customers actually want and require (like customizations). You can guess, and may be right on some things but wrong on others.
  2. Complexity means higher costs and time commitments, ultimately taking your attention away from the really important part of launching your service: customer acquisition.

With this in mind, I suggest following these three steps to keep your business simple. By doing so, you’ll develop core competencies in critically important areas.

Step 1: Understand What You’re Selling

The first step is distinctly understand what it is you’re selling. This doesn’t just mean the products you put into the box. Write these questions out, then below them, write your answer:

  • What is your value proposition?
  • What niche are you serving?
  • What is the right level of complexity to offer your customers?

(Need help defining these terms? Check out our guide on 5 Concepts Every Subscription Business Owner Needs to Know)

Example: If you’re working in an industry catered to food sensitivities, like gluten or nut allergies, you’ll actually need to develop steps to sort boxes and provide customization. Alternatively, if you’re just launching a ‘healthy food’ box, it makes sense to push those customizations off for a later date.

How do you determine this? Follow these suggestions:

  • Talk to your ‘early adopters’ – this can be your first subscribers, or you can even get a jump on it engaging more deeply at the early stage with presubscribers and social media fans/followers. Take polls and get feedback on your product. What needs fixing or tweaking?
  • Ask yourself, Why are customers actually buying your product? Is your answer a hunch or can you demonstrate the truth through data? What value proposition do you members report?
  • Look at negative feedback: What is wrong with your product or customer experience? Start there.
  • How does it feel to unbox your subscription? This physical, visceral experience with your brand is extremely important.
  • What products have been working, and which haven’t? Why?

Finding the answers to these questions provides a prioritized list of actionable steps you and your team can take. Take the guess work out of what is most important.

Step 2: Avoid a ‘Spray and Pray’ Mentality

You’re going to feel like you need to simply hit every target as quickly as possible – hence the ‘spray and pray’ approach. This is costly, ineffective, and usually results in shoddy work. It’s a lot harder to do a great job at ten things than it is to do a fantastic job at just one or two.

Example: Rather than providing 4 different subscription billing options (1, 3, 6, 12 month plans) and a full fledged eCommerce store, start simple. Provide monthly subscriptions and hold off selling products until you’re able to manage those logistics.

The same goes for the user experience online and inside the box. Don’t overwhelm your subscribers with a complex website or a half dozen inserts. Simply provide packing list to start, avoiding additional advertisements or stickers on products. Likewise, build a website with just 3 sections: About, Get the Box, and Contact Us.

Step 3: Remember Why Simple is Better

Don’t get me wrong – these ideas aren’t bad. Thoughtfully enhancing customer experience is probably essential for the growth and continued enjoyment of your product. But here and now, you’re in the startup phase of your business.

Remember why simple is better:

  • Case 1: You’ve got a complicated model and it is NOT working:
    • A model that is complex to begin means more variables at play. If things aren’t working out as hoped, it is inherently more difficult to find out why that is. For example:
      • Do several pricing structures confuse people?
      • Are the marketing materials over or under promising?
      • Are there too many options that it becomes confusing?
  • Case 2: You’ve got a complicated model and it IS working:
    • A model that is complex & successful means a ton more logistical work in the early stages of your business. This wastes time and energy:
      • You may have 100 customers, but do you have to pack 100 unique boxes? Your labor cost may eat all your profit.
      • Complexity means increased likelihood for human error. That means you’ve now got to develop systems and organizational rigor to mitigate this. This takes time and money.
      • Dealing with complex logistical operations means less time you get to focus on customer acquisition and customer support: your tools for growing and maintaining your business.

Remember: It’s more difficult to simplify a complex model than it is to add complexities to a simple one. At the same time, starting simple and adding functionality is actually a win to customers – they get more options and feel like they’re a part of growing community. On the other hand, people get upset when options and customization goes away.

Keep it Simple and Remove the Guess Work

With a solid yet simple foundation set, you’re primed to grab eyes, convert customers, and begin learning what exactly you need to do next to continue growth and keep people happy.

Let’s review:

  • Start with a simple product: 1 product offering, 1 billing structure
    • Know what you’re selling and avoid spray and pray mentality
  • Concentrate on defining and effectively selling your value proposition
    • High quality marketing assets, like photos and email templates
    • Clear, sellable explanation of what your product is
  • Save the complexity until after you’ve established a happy, cohesive customer group

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About Amir Elaguizy

Amir Elaguizy is a cofounder and CEO of Cratejoy. He founded MarketZero in 2006 and sold it to Zynga in 2011. He served as a Zynga Studio CTO prior to founding Cratejoy in 2013. He's a Y Combinator alumni.

12 Responses

  1. Walter L. Lewis

    This article was very helpful. I tend to over think things, and then over due ( or make more complex than it needs to b ) everything I do, but you have clarified the necessary things i should be considering first. Thanks for the guidance.,

  2. Sarah

    I thought I had a great idea for my subscription box, but I’m glad I read this article. Keeping things simple is what I want, and to offer 1 type of product with 1 price point is good advice. Even if my box is similar to others, it will be different based on how I market it, and exactly what products I include.

  3. Kimberley

    Very, very helpful information. I am in love with the start simple process as reading it all gets to be mind-boggling! 🙂 Thank you!

  4. Evelyn

    Super helpful post! I was really starting to overthink all my plans and options. It’s good to start simple and build as it goes. If my customers are going to stay, they’re going to stay. Thanks!

    1. Hi Evelyn,

      Thanks for the note. Yes, keeping it simple, especially at the beginning, can be one of the best way to launch with success & avoid mistakes/weird expectation with subscribers. Good luck with your launch!

      Jesse

  5. […] 4) KISS (Keep it simple stupid): It’s easy to get caught up in the excitement of starting a new business. Founders want the best tools and best strategies to make the most profit, creating a complex business model. Successful founders take a step back to ask the basics. Start simple and build as the business grows. Explore the topic more at the Cratejoy Subscription School. […]

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