Subscription marketing is a bit different then marketing a non re-occurring product or service and you CRM system needs to be capable of handling these extra needs. While most CRM system can handle subscription products or service it will take some additional work to make things really hum. Let’s take a look at what can make a CRM system handle subscription marketing.
Subscription products and services and their needs
If you sell a subscription product you have several things going on that a non-subscription product does not have. [ We will use products in this article, but the same holds true for a subscription service. ] What is a subscription product? Examples are: 1) Magazine subscriptions, 2) mail order diet food deliveries, 3) memberships, 4) bi-weekly coffee service products and many more. What do they have in common?
- They all exist over a period of time. From weeks to years.
- They generally have an expiration period, or at least an auto-renewal time period.
- They can be complex. Multiple product bundles, different time periods, different subscription rules, opt in renewal, opt out renewal
- They can change along the way. Product mix, time, shipments.
- Segmentation is more complex.
- They require substantial customer care alone the way. Call centers, Inventory management, marketing plan.
On top of all this they same the same marketing challenges as a single product or service.
The simple campaign now is not so simple
A campaign for a product can be as simple as deciding these factors into a plan, creating the campaign, the offers, when it will launch and where the customer touch channels will be and how long it will last. Then you decide what set of customers or prospects you will market to, create your segments and pipe that into your CRM system. And it works! During the course of this campaign maybe you have a series of offers that were given at a set duration to the same segment until they bought something or the campaign ends. Then you might re-think the campaign and create another one that re-markets to the same segment of prospects that did not buy. An so the process continues.
Now let’s take a renewal marketing campaign for a subscription product. Our example will be a product that is shipped monthly but can have different subscription durations and maybe product mix. Your marketing knowledge says that to achieve a high rate of renewals, that customer will need on average 6 offers/contacts over a period of 10 weeks to retain them as a customer. Reminder e-mails, direct mail pieces or calls may be utilized. Even with a different product mix the actual setup of a campaign and offers can be done much the same as in a regular product campaign.
The difficulty arises
Where the difficult arises is creating the set of customers to use for that campaign. Since subscriptions can end on any date, which customers do I use? I could choose to take a “week’s worth” of customers that will have their subscription expiring in 10 weeks. And run the campaign. But what happens the next week, when there is an entirely new set of expiring customers that are 10 week out? We can’t add them to our original campaign since that campaign is already onto the second step/offer as it moves through the campaign steps. So we need a second campaign to run so that the second week group has the same set of time and offers, but compared to the first group delayed by one week. This idea of same campaigns but different list of customers and start time is where many CRM system fall down.
One could of course just duplicate the first campaign, extract the second weeks of expiring customers and launch that campaign. If you have to do this manually in your CRM system it can be lots of work and fraught with potential errors. Plus in our example, at the end of the year you would need 52 campaigns to run, one per week. A more efficient way is to have a CRM system that can utilize the same campaign and offer structure, yet apply that to a different set of customers. This is a reoccurring campaign then can automatically create the same set of offer steps from the first and apply that to a new set of customers but in a different time period.
This same issue arises for subscription marketing not only for renewals, but for new customer fulfillment and marketing, loyalty marketing and more. Typical segmentation techniques are made much more complex. Think about loyalty marketing. Do I segment together customers who have the same level of purchases dollars (maybe lifetime value) or those that are on the same track of subscription when I market to them?
Subscription marketing is more difficult, but you should think out what you need to do in your business first and then match that to a CRM system that can handle much of your needs. Alternatively you may need to use some manual processes or customizations to your CRM system to handle your campaigns for subscriptions.