Subscription-based companies have huge potential for sustained growth. An organization can go far by consistently bringing customers quality products and providing great service. However, there are a number of common business problems that go along with the subscription model.
Avoiding those pitfalls takes strategy and expertise, beginning with recognizing just how things can go wrong and taking steps accordingly.
1. Losing customers
"An organization must keep existing subscribers happy."
One of the greatest challenges for a subscription business is customer churn. For an organization to thrive, it must keep existing subscribers happy and engaged while also bringing new people into the fold. However, it's easy for a customer to lose interest in a product after a few months and cancel.
Maintaining a strong subscriber base requires concerted effort from the whole organization. Econsultancy explained the importance of keeping the experience fresh for consumers by offering intriguing new products and flexibility in subscription options. Occasionally getting in touch with customers to make them feel valued can build a stronger relationship for the long run.
2. Billing challenges
Charging customers automatically for their monthly purchases is one of the big advantages of a subscription business. However, a number of issues come up with recurring billing, and it's vital for leaders to tread carefully. Business Insider pointed out that it's essential to set clear policies so customers know precisely what they are being billed for and how to make adjustments to their account as necessary.
Maintaining strict security for payment information and other private data is another way to protect the company while strengthening subscriber trust. By staying in line with Payment Card Industry compliance standards, a subscription-based company avoids serious damage to its bottom line and reputation.
3. Managing inventory and logistics
Getting all those subscription boxes out to consumers speedily takes extensive resources. Every box full of appealing products must be packed and shipped, and those operations may grow unwieldy as new subscribers sign up and the organization expands. If a company does not have a powerful inventory management system and up-to-date software tools, it can run into serious obstacles when scaling for growth.
SFG provides an array of solutions tailored to meet the needs of ecommerce subscription businesses. With warehousing and distribution services, an order management system and a customer care package, an organization is ready to meet the challenges of today's marketplace and achieve sustainable results.
