/ Customers

Do you personalize to keep your subscriptions active? - 3 Health/Beauty examples

Subscription eCommerce can have its cake and eat it too. Beauty and grooming product companies in particular, benefit from a direct-to-consumer acquisition framework and a recurring revenue stream. Consumers enjoy a personalized experience. Everyone wins. You know this segment has promise since the beauty industry is witness to an eye-popping billion dollar acquisition.

Effective marketing technology is absolutely crucial to the success of the subscription e-commerce model. Marketing technology needs to aim at the biggest challenge that these companies face on a recurring basis: acquiring subscribers, keeping them engaged through the subscription cycle so they can lower the rate of “churn,” or membership cancellations.

No wonder AI-based marketing has proven to be a subscription e-commerce friend. If a company relies on marketing that accurately predicts what products a customer will like, and engages with the customer in a real-time manner to cater to that discovery, then the probability of cancellation diminishes considerably.

As a marketer, you can actually understand your subscribers and articulate what they want better that they ever could. How? By going Predictive.

In this article, we’ll explore 3 Use Cases of how Visitor Journey Analytics and Predictive Notifications tackle common challenges beauty product subscription ecommerce companies face like acquiring subscribers and keeping them engaged.

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 Acquiring Subscribers. Use Case 1 - Birchbox

Birchbox is perfect for the window shoppers who enjoy endlessly browsing beauty and grooming products, but can't quite make a decision on which product to get. Birchbox makes it easy and affordable to enjoy variety without having to make a decision.  Visitors can either shop products or become a subscriber. Subscribers receive their monthly box of 5 samples every month. The company created a huge buzz in the beauty industry with their monthly boxes, made popular by well known influencers, such as Emily Schuman of Cupcakes and Cashmere, who has a following of 300k+ on Instagram. The subscription comes in the form of a monthly / yearly subscription.

 

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Birchbox Homepage 

By subscribing, members have access to 5 beauty samples that include makeup, hair and skin care. Subscribers receive points redeemable at the online Birchbox store (available to be shopped by non-subscribers, as well) when they add full size products to their boxes, and after the second month, they can begin to choose the samples they want to receive.  

  

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Birchbox Perks

 

What If?

Let’s explore an idea of how Birchbox could acquire new subscribers. We know visitors browse around 2 pages per visit, and visit more than once, on average We are looking to create a campaign that will leverage the power of product interest by converting window shoppers into subscribers, and prevent Birchbox from losing money on retargeting advertising. Here’s what we do:  

  • Collect data. First, we collect the data of a curious visitor who is browsing in Birchbox, leaves without subscribing, and returns for the typical second visit. Using a platform like Intempt, we specify a tracker for the domain to understand the visitor's behavior from the very first visit, store every interaction, and leverage the data in the future campaign. 

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Creating the Birchbox tracker

  • Identify a drop-off point. We’ve assumed that visitors leave the website after viewing 2 pages. To back our hypothesis with data, we slice two narrowly defined segments out of the funnel and compare how many visitors have fallen into each segment. We create a Segment 1 for visitors who browse 1 page (behavioral property Count Of) and a Segment 2 for visitors who browse 2 pages (behavioral property Count Of). Here’s what it could look like:

 

Subscription ecommerce ai

Segment 1 audience vs Segment 2 audience (marked in red)

Based on the gap we noticed between the two segments, we know a visitor is likely to leave, so we prevent the drop-off with a targeted notification.

  • Segment our visitors. We specify a target group by blending past behavior (fact) and future behavior (predicted). For this segment, we are focusing on first-time or returning visitors who haven’t subscribed (behavioral property Has Not Done), have browsed 1 or more pages (behavioral property Count Of) and are predicted to drop off without subscribing (predictive property Will Not Do.)
  • Time to campaign! For this campaign, when one or more pages are reviewed, we know the possibility of a drop-off is high based on the average number of pages per visit. It’s a good time to send a notification inviting the visitor to check out the Birchbox subscription. Final look:

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Simulated Scenario - Predictive Notification

Why This Notification At This Time?

  • The visitor has engaged with at least one page;
  • The visitor is new to the subscription model;
  • The visitor is predicted to drop off without becoming a subscriber.

In this scenario, we’ve leveraged a visitor’s intent of exploring new products and used that intent to convert them into a subscriber.

 

Keeping Subscribers Engaged. Use Case 2 - Dollar Shave Club

Dollar Shave Club (DSC) solely use the subscription business box business model.

They don’t provide the option of one-time purchases, though you are able to cancel your subscription at any time. This model, an amazing viral introductory video and affordable prices, allowed the company to not only grow quickly, but to also get noticed and acquired by Unilever for $1 billion.

 

Subscription ecommerce ai

Dollar Shave Club Homepage 

 

Once you become a member, the website recognizes you with every visit and greets you with a personalized “Nice to see you” page that offers new blades and a referral program to earn an extra $5.

 

Subscription ecommerce ai

Dollar Shave Club Membership Homepage

What If?

Dollar Shave Club is doing well with acquiring new members - the introductory video alone got them 12,000 subscribers in the first 48 hours of being live, and their monthly audience reaches 3.3 million people, who on average, spend 2.5 minutes per session. As with many subscription companies, the question of retaining customers and keeping them engaged with the brand remains an open switch.

Based on public data, email campaigns are well used by DSC - in fact, email marketing is responsible for 18% of total traffic. Based on how members engage (and don’t engage) with a nurturing email strategy, a DSC marketer could earmark a member as qualified for a marketing campaign. Furthermore, they would anticipate the key event that triggers the message. Here are some ideas on how DSC could give their email marketing a boost in engagement and turn it into revenue:

  • Collect and store data. First, let’s store every interaction by a member to understand their behavior. Imagine that we’ve collected data from the hypothetical email campaign dedicated to introducing new shaving products. To tie it into the visitor journey, we’re tracking a special link embedded into the email. So we know what action brought a member back in a marketer quantified way, and we’ll help a member reach that goal.
  • Create visitor segments. We create a segment that contains members who have clicked an email link containing a new product (behavioral property Has Done), clicked away from the new product page (behavioral property Has Done), have not visited new product page yet (behavioral property Has Not Done), and are predicted to not add a product to the cart (predictive property Will Not Do Add To Cart).  
  • Set up a notification campaign to suppress the discovered drop-off. Using Intempt Campaign Editor, we create our future campaign in 5 steps by specifying a targeted segment, campaign goal, preferable channels of communication, notification message, and delivery preferences. Here’s what creating our future notification looks like:

Subscription ecommerce ai

Intempt Campaign Editor

Now, we target currently active members from our target segment with notifications at key drop off points. In this example, a member may not engage with a new product right away. The key difference now is that we know what brought a member back. Once they meet a trigger event (for a campaign), the notification goes out. Here’s what it looks like:

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Simulated Scenario - Predictive Notification

Subscription ecommerce ai

Zooming In

Why This Notification At This Time?

The visitors’ past browsing and purchasing behavior as well as their current context is indicative of what will happen:

  • The member has engaged with a link sent through email which indicates member’s interests;
  • The member is not aware of the new product;
  • The member has disengaged with the initial offer;
  • The platform predicted that the visitor is not going to add an item to the cart (Will Not Do Add to Cart predictive property) unless we trigger their attention, so the “Bundle purchase” notification appears to encourage the member to proceed with a purchase at a later time.

Once the member engages with a link, we take them where we promised - it encourages the member to add a new item to their monthly box.

 

Subscription ecommerce ai

Page linked in the notification

Voila!

 

Preventing Cancellation. Use Case 3 - The Honest Company

The Honest Company is a mission-driven company providing 101+ safe, effective and delightful products for baby, personal care, cleaning, vitamins and more. The company emphasizes household products to supply the marketplace for ethical consumerism. The Honest Company serves US and Canada, offering one-time purchases and bundles which, as the company claims, may save up to 35% for a customer. 

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Honest Homepage

What If?

While The Honest Company is growing monthly visitors at a decent clip (nearly 490,340 unique monthly visitors according to Alexa.com), preventing members from cancellation remains a key strategy. 72% of subscription eCommerce customers don’t renew within 6 months of their initial transaction. To minimize the chance of cancellation among active members, I would create a marketing campaign that sheds more light on the benefits of sticking with a brand. Here’s how to get there:

  • Keep collecting the data. Exploring subscriber behavior through data may tell us that they were inclined to cancel their memberships. The data and facts deepen the subscriber profile.
  • Create a segment. We segment our subscribers as narrowly as possible based on their activity over one or more web sessions. If a member made at least 1 purchase before (behavioral property Has Done), hasn’t been to the website since the time of the previous purchase (behavioral property Has Not Done), has read the cancellation policy (behavioral property Has Done), and is predicted to cancel the subscription (predictive property Will Do), they fall into our segment. We’re dealing with a subscriber who has been passive towards the brand and is inclined to unsubscribe, which shapes our future campaign.
  • Move on to notifications. We set “Reads cancellation policies” as a trigger event for our personalized notification. If a visitor falls into a segment described earlier, they are qualified to see a notification introducing the benefits of the membership they have experienced so far. For example, a link in the notification can take a member to a new page where they can see how many free hours and how much money they have saved using Honest. Here’s what a notification could look like:

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 Simulated Scenario - Predictive Notification

Why This Notification At This Time?

  • The member made at least 1 purchase from The Honest Company, so we have data for a comparison;
  • The member has been passive towards The Honest Company since the time of their last purchase;
  • The member has checked out the cancellation policy, letting us know they’re not far from leaving.

By leading a member to a potential comparison page, we reinforce the value of The Honest Company subscription and lower the risk of cancellation.

 

Final Thoughts

Running a subscription e-commerce business is both rewarding and challenging. If you think acquiring customers may not be as challenging as in other business models, I'm here to tell you that keeping them engaged and renewing keeps us marketers awake at night. With the right technology platform in place, retaining subscribers becomes less stressful. Intempt is a platform designed to help every company be smarter with their subscribers. We are constantly investing in delivering AI that transforms the customer experience.

* Birchbox, Dollar Shave Club, and Honest website data was acquired from Alexa.com