Task At Hand

Challenge: What would the world of e-commerce look like coming out of the 2020 pandemic boom? There was an increased concern around customer stickiness and how our company would perform going into 2021. How do we keep customers shopping online in 2021 as the shops begin to re-open? How do we build loyalty so customer’s continue to choose us over a competitor? How do we offer an economically viable benefit to our customer that have proven incremental results? How do we diversify our marketing channels with the paid social headwinds? However the biggest challenge of all, was the test could not use any tech resourcing as the team was at capacity.

Solution: Experiment in the subscription space with the focus to improve customer stickiness. Creatively use internal- tools such as landing pages, product pages, banners, and filler tiles to drive beta-test awareness. I launched 3 subscription offers to better understand customer preference, customer behaviors, and financial impacts.

Program Goals:

• Build brand loyalty and reduce churn

• Move customer's up the value chain

• Add value to her shopping experience with mutual benefits

KPIs:

• Sign ups

• Demand

• AOV

• Repurchase Rate

• Revisit Rate

• Additional order days

Program Test & Results

Initial Test

• Run Dates: 8/11/20 – 8/17/20

• Audience: 160K activators/re-activators that we picked up during COVID (April-May)

• Test Goals: Develop process to set up offer, understand behavior from our less engaged customers to offset HVC costs i.e. incremental demand, incremental order days, sign up rates.

• Offers and Exposure:

  • Spend $30 get 10% off (25%)

  • Spend $50 get 15% off (25%)

  • Spend $50 get 10% off (25%)

  • Control group (25%)

• Results: Despite extensive on-site marketing coverage, we only generated 15 sign ups.

• Learnings:

  • Capabilities, functionality, and built process

  • Initial test audience was too niche and over indexed in low-engaged customers.

• Next Steps: Expand to a larger and more diverse audience.

Re-Launch Test 2 - Audience Expansion

• Launch Date: 9/17/20

• Audience: All customers from 3/17/20 to 9/17/20 who have spent <$150 in that time period.

• Test Goals: Drive sign ups from the lower customer tiers to allow for meaningful results that can guide next steps. i.e. more accurate modelling, smart iterations, etc.

• Offer:

  • Control (73% exposure)

  • $30 for 10% off 1 year (9%)

  • $50 for 10% off 1 year (9%)

  • $50 for 15% off 1 year (9%)

• Results:

  • Sign Ups

    • 30 days post launch: 129 members

    • 3 months post launch: 1.7K members

    • 6 months post launch: 2.7K members

  • 28 pre-membership/post-membership purchase analysis: showed a 60% product demand increase.

  • Life Time Value Bucket Migration: At time of sign up, 46% of members spent <$400 a year with company. Post sign up, 73% of members spent >$600 a year.

  • Next Steps post 30 day check in: Reevaluate the customer experience, align on a program name, audience expansion, and gather customer insights.

Customer Experience At Launch

Customer Insights

Ran two separate customer research tests. The first was a user test utilizing UserTesting.com to gather insights around the perceived program value and the program name. The second test, was a survey with the current program members to better understand their membership experience, likeness to renew, likeliness to refer-a-friend, and benefits they would like to see.

*Note - I ran a user test around the overall experience pre beta test launch.

User Test

User testing is the process through which the interface and functions of a website, app, product, or service are tested by real users who perform specific tasks in realistic conditions.

• Methodology: User test with 21 participants distributed between the 3 different offer buckets. Users were asked a series of questions around the program name and the perceived program value.

  • $30 for 10% off 1 year - 7 participants

  • $50 for 10% off 1 year- 9 participants

  • $50 for 15% off 1 year - 5 participants.

• Participant Demographics (company demographic targets mom, target market for this program is ‘new moms’)

  • Female

  • Age Range: 25-54 (57%= 25-34)

  • HH Income Range: Up to $150K (57% = $60k -$124k)

  • Mix of current customers and non-customers

Program Name

Before seeing the program, users were shown 3 out of 6 potential program names at random. They were asked to say out loud what types of products or service comes to mind when they see the name.

Post being walked through the the program experience, users were asked to revisit the names and pick their favorite.

Result: [Company Name]+ was the winning name. Users associated the name with a membership or subscription program. Post revisiting the names, 69% of users picked [Company Name]+ as their favorite.

Decision Made: Company moved forward with this selection as the program name.

Perceived Program Value:

Users were taken to their respective program page bucket. They were instructed to take a few moments to read through the content and verbally share their thoughts. From there, they were asked a series of questions to dive into the program value.

Results: Overall, customers were comfortable with both the $30 and $50 price point. Users assessed value by looking at the break even spend to recoup upfront cost and/or the monthly breakout of the upfront cost. However, most users voted ‘no’ to enrolling in the program. They felt that the percentage off was not incentive enough. The most common incentive requested was free shipping.

Decision Made: Created a 4th test bucket that was $50 for 5% off and free shipping on orders $50+. Additionally, launched additional incentives for members such as; special discount days and early access to deals.

Member Survey

A survey is a list of questions aimed for extracting specific data from a particular group of people. This particular survey was conducted through email.

Methodology: We emailed a group of 2K of our active members asking them to take a survey to help better the membership program. 242 members respond.

Results:

• Membership Experience

  • 98% of respondents planned to renew (takeaway disengaged members who may of voted no, would be less likely to take a survey).

  • The #1 reason for those who voted ‘no’ was due to shipping costs.

• Likeliness to Renew

  • 90% of respondents planned to renew their membership.

  • Again, the #1 reason to not renew was due to shipping costs.

• Likeliness to Refer-a-Friend

  • 88% of respondents would refer-a-friend to the program.

  • The #1 reason for not referring was due to not having friends who shop with company.

• Additional Benefits

  • As you may guess based on the results above, the #1 requested benefit was… free shipping.

Decision Made: Rolled out free shipping coupons to members in the non-free shipping test bucket, to use 3x a year. We also launched exclusive deals and early access to deals for members. Lastly, at time of renewal members were offered the chance to renew in their current test bucket or opt to be in the $50-5% off orders-free shipping $50+ bucket.

Conclusion

To close, 2020 saw incredible customer growth due to COVID forcing brick and mortar shops to transition into e-commerce coupled with consumer shopping behaviors changing. However, there was risk ‘one and done’ shoppers if company was unable improve customer stickiness and continue to diversify their marketing channels.  

I believe that a subscription model is a solid tool to retain a group of fiercely loyal customers that give’s companies the opportunity to aggressively experiment towards a better CX. These members can be leveraged across multiple orgs within a company to support annual goals. For example, leverage these customers in early product launches to test the CX without fear of short-term churn. They also allow Merch orgs to have better flexibility with their product offerings (e.g. MAP) while still providing continued value. There are also customer-benefiting business development and ad sales opportunities as captive audience grows. Subscription models unlock endless ideas and possibilities

To be successful, you will need to continually monitor and check in with your members to ensure that they are happy and engaged.