Two Ways Subscription Boxes Can Turn Gift Subscriptions into Paid Subscriptions and Increase Recurring Revenue

Over the next few weeks of the holiday season, your subscription box will generate more gift subscriptions in a month than you’ll likely generate the rest of the year. These new subscriptions create a tremendous opportunity for you to expose your box to new potential subscribers. This seasonal trend creates two huge opportunities for your […]

Over the next few weeks of the holiday season, your subscription box will generate more gift subscriptions in a month than you’ll likely generate the rest of the year. These new subscriptions create a tremendous opportunity for you to expose your box to new potential subscribers.

This seasonal trend creates two huge opportunities for your subscription box over the next few weeks, first maximizing the number of gift subscriptions your box generates, and secondly, turning those gift recipients into paid subscribers.

In my recent interviews with several successful subscription box executives, I was able to get some insight on what they do to maximize these opportunities.

Gift Purchases Provide Opportunities to Increase and Expand Your Sales

Founder and CEO of PopSugar Must Have, Lisa Sugar, says “The gifting aspect is extremely important to our business. Obviously, we want to convert those folks to be long-time, loyal subscribers. But it’s a nice price point for a gift.” She adds, “We have various key seasons and offerings in different quarters where we can have a more expensive box. When there are holiday times or Mother’s Day, we have an additional offering for those folks who really do like to use the vehicle as a gifting vehicle.”

To maximize the gifting opportunity, Lisa shares that “because so many of our subscribers are women, they love that we’ve curated a box for men and that’s what they give their significant others, dads or brothers during the holidays. It’s been really great for us to extend in slightly different categories or more luxury, specifically in November and December, to make sure everybody’s covered for all their gifting needs.”

Dustin McAdams, founder, and CEO of PupJoy agrees. “We have seen really good traction with holiday gifting. We’re a very giftable service, as are a lot of other subscription boxes,” he shares. “We’ve learned a couple things. One is to make the gifting experience very easy because the folks that are giving gifts typically don’t need the type of customization or specificity like somebody who may be ordering an annual service for their dog. And secondly, with the gift recipients, we do not go out and immediately try to convert them to customers. What we do is begin to nurture a relationship with them. They’ve received a gift, and hopefully, they are loving what they’ve received from PupJoy.”

Dustin adds, “A couple other things that we’ve learned over the last couple seasons are shaping where we’re headed for this holiday season. One, we’ve learned where the typical price range is in gift giving, and that’s led us to come up with a couple new product offerings this year. It also allows for larger packages to be sent all at once if somebody wants it, versus getting it over a multi-month cycle. Secondly, we’re actually going to have a physical retail location over the holiday cycle this year, here in our hometown of Chicago, which will be an interesting and fun test and experience for us.”

Gift Purchases Provide Opportunities to Convert Recipients into Subscribers

Converting a gift subscriber into paid subscriber is one of the toughest marketing challenges subscription boxes face today. However, it also presents a tremendous opportunity. These gift recipients have been identified by someone that knows them as a perfect person for your subscription box. An effective process to turn gift subscribers into paid subscribers can be a large new source of ongoing subscribers.

A process that Dustin finds successful for PupJoy is to insert high gloss cards in each box that share some of the product information and state where more information can be found. They include their contact information with email addresses and even phone numbers. “That’s one way to open up the dialogue and then with all gift recipients.” In addition, Dustin shares that they “have automated drip nurturing email campaigns that go out. We don’t try to hit them with a whole lot of information all at once. It’s more incrementally keeping PupJoy on their radar.”

James Erickson, founder, and CEO of Stridebox, shares how he overcomes a challenge that comes with gift subscriptions. “As we have it right now when somebody signs up for a gift subscription, the only information we have for the gift recipient is a name and address. We don’t have a lot of email opportunity with those people immediately. We don’t have a phone number.” As an experienced direct response marketer, James likes this challenge. “I think you can hit a mailbox and stand out easier in a mailbox. Especially if somebody’s getting a nice box of goodies in the mail every month,” he says.

Stridebox sends a series of three postcards when the gift subscriptions expire. “The first one says, ‘Oh no, you’re not going to get your Stridebox next month.’  It explains to them that so and so bought them a three-month gift subscription and that has expired with their final box, and if they want to continue, here’s where they can sign up. The next one says, ‘This could be where it all ends.’ Then, it kind of explains it again. The third one gives them, finally, a discount code to go sign up for their first month.”

Deena Bronz, co-founder of KitNipBox, shares additional thoughts about maximizing the new subscriber opportunity. According to Deena, “the number one way to convert them is to really wow them with the box and with the product inside.” She goes on to add “in addition to that, there are a number of things to be done – from putting inserts in the box with calls to action to convert and become a full-time subscriber to email marketing, to getting them engaged on social media and becoming part of that community. We have an email sequence and we want to make sure that they’re always up to date on exactly when they’re getting their box, and what’s going on. So, it’s really a multi-channel approach to building a relationship with that gift recipient, just like we would build a relationship with a regular subscriber.”

KitNipBox has developed a strong social media community that adds an advantage. “We engage them on social media. For example, on every product insert that goes in the box, we also have our social media icons. We encourage them to post pictures and videos and we also make ourselves available.”

Now that we’re in the beginning of the busiest shopping and gift-giving season, you can make the most of your gift subscriptions by expanding your offerings and using the following tools that have proven successful for these entrepreneurs to convert gift recipients into subscribers:

  • Messages inside the gift boxes (inserted cards) providing product and contact information
  • An email sequence to keep in touch with the gift recipient as their gift expiration draws near
  • Using your community of subscribers to draw them in, especially effective with social media

To discover more keys to recurring revenue growth and improved member retention, subscribe to the podcast, Membership and Subscription Growth. You’ll hear the advice from some of the most successful entrepreneurs in the subscription market. Previous and upcoming guests include Robbie Kellman Baxter (author of The Membership Economy), Amir Elaguizy (CEO of CrateJoy), Dustin McAdams (CEO of PupJoy), Liz Cadman (Founder of MySubscriptionAddiction.com), Deena Bronz (Co-founder and CEO of KitNipBox), Tim Broom (Founder of ITProTV), and Georg Richter (Founder of OceanX)!

 

 

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