Subscription boxes are very popular with many including myself becoming subscribes of different boxes. Having the perfect little monthly or bimonthly gift to yourself to gush on your favorite activity, fandom, hobby or to take care of a basic need without it having to occupy precious space on your to do list such as dress socks is why many consumers love the model. The companies producing these boxes have a steady flow of customers every month in which they can focus on things like acquisition of new customers and pleasing their current subscribers.
However many subscription box companies are leaving thousands…and in some cases millions of dollars on the table by not employing a very simple strategy.
Special Note: Comic Bento has gone out of business. They said they did not generate enough revenue in order to keep the business going. Perhaps had they not been afraid to email their customer base and offer them more stuff. They might still be around.
Email Marketing to their paid subscriber list.
Subscription box companies are always on the hunt for more subscribers. It’s the nature of the beast because just because they a business model that has a more stable revenue flow doesn’t mean that your current subscribers will stay subscribers forever. The average for most subscription boxes to keep a subscriber is 3 months which means that most companies using this model have to keep bringing in a certain amount of new subscribers every month to make up for the ones they lose.
More time and money has to be spent on marketing to attract and then sell potential subscribers on the product. It would make sense to offer current subscribers more offers on other products while they are still subscribers.
A carefully created yet simple email marketing campaign sent to current paid subscribers could boost monthly revenue for a subscription box business easily. Most companies don’t do this and therefore miss out on the extra revenue that they could have made from their very own buyers lists.
For example: Comic Bento a comic book subscription box service where I am a currently subscriber.
Every month they send me a box of comic books based on a theme that they choose. I pay them their fee and they send me my mystery box where I get to discover what’s inside.
It’s a very simple model and I have been a subscriber for over a year and the only emails I get from them as a paid subscriber has to do with my order. Think of all the potential sales they could have gotten out of me had they tried to sell me something else?
In the comic book/nerd/pop culture geek niche there are a lot of hard core fans that would love to throw their money at anything related to comic books and nerdy collectors items. After all it is why events like Comic Con do so well because there are nerd like me that will spend money to go and spend money buying merchandise while we are there.
Given that, why doesn’t Comic Bento who I first found while attending New York Comic Con in 2016 not use email marketing to sell me more stuff?
They could have easily sold me hundreds of dollars of merchandise is they wanted to over the time I have been a subscriber but they didn’t and if I choice to no longer be a subscriber next month then they will lose the chance forever.
If I spend $300 a year with them as subscriber.
I pay $25 a month on that monthly plan.
I am a subscriber for 12 months.
Comic Bento makes gross revenue $300.
They could have easily especially in the niche they serve could have increased my spend with them by at least 50% or more had they offered me something else.
So let’s say that they left $150 on the table because they didn’t use email marketing.
That might not seem like a lot but that is just one subscriber who has been with them 12 months.
But what if it were X more:
10* $150 = $1,500
100 * $150 = $15,000
1000 * $150 = $150,000
10000 * $150 = $1,500,000
However having a subscriber for 12 months is not the norm so let’s do the math for the average time someone stays a subscriber which is 3 months.
Let’s say $37.5 is the average I might have spent had they emailed me other offers over the course of 3 months before I unsubscribed. (Remember this is a comic book company Comic Bento.)
I pay $25 a month on that monthly plan.
I am a subscriber for 3 months.
Comic Bento makes gross revenue $75.
But what if there were x more like me:
10* $37.5= $375
100* $37.5 = $3,750
1000* $37.5= $37,500
10000* $37.5= $375,000
So even if there only 10 paid subscribers like me on Comic Bento’s list that bought from them. They still would have made an extra $375 in gross revenue had they used email marketing before those subscribers cancelled their subscription.
Now in the first example I mentioned that I have been with them over a year but just estimated the amount of money they have left on the table with me being a subscriber for 12 months. ($150) Now if there were just 10 more like myself then they have left at least $1,500 on the table.
Email marketing could have increased the revenue of this company without them worrying about additional cost on PPC traffic. They could have made thousands of dollars very easily with email marketing to their paid list but they didn’t and since I am still a subscriber. I can tell you that Comic Bento is still making the same mistake.
The question is will other subscription box companies continue to leave money on the table or start using email marketing to increase their revenue?
To learn how you can use email marketing to increase the revenue of your company.