Many D2C Companies still don’t offer subscriptions in their front-end funnels. This is a huge mistake…
Especially when it’s super easy to do.
Let’s take supplements, for example.
Say you take your standard checkout page, with options to get 1, 3, or 6 bottles (you have that option, right?).
Now, on that checkout page, you give the customer the option to subscribe and get a 10% discount.
When giving them that option, you explain clearly that they are enrolling in an autoship, and that they can cancel anytime.
It’s not uncommon to get about a 20% take rate for this subscription.
Easy money, right?
And for those who subscribe…
DO NOT show them your standard 6 bottle “stock up” upsell or 3 bottle “last chance” downsells
Instead… take them straight to cross-sell pages, where you can sell them different products.
Reason being — you don’t need to upsell them more bottles when they have them coming in every 30 days. That’s overkill.
Be logical here, and give congruent cross-sell options that will increase the value of their subscriptions.
Now, when it comes to the customer’s subscription…
The way this works is they get rebilled depending upon how many bottles they took.
So, if they took 6 bottles, then they’ll get rebilled towards the end of month 6.
And here’s the SUPER IMPORTANT part:
Before you rebill the customer for the first time…
Let’s say it’s 6 months later…
Send them an email AND call them.
This way, you can confirm they were good with getting rebilled. Most people are.
But of those 50%, they tended to stick with us for a very long time after (aka multiple rebill cycles).
Now here’s the fun part, where we do the math on this deal:
Let’s say you’re doing 100 total sales a day.
And of that 100, 20 are subscribing (meaning 20% of people check the box/order bump/etc.).
Now, out of that 20% … let’s say:
-50% of those people take your 6-month option…
-30% take your 3-month option…
-And 20% take your 1-month option.
We know that half (10) of those people who subscribe will actually rebill.
So, this means that each day you’re getting:
-5 people who are going to rebill at a 6 bottle package (let’s call it $240 in rev per person, per rebill)
-3 people who are going to rebill at your 3 bottle package (let’s call it $120 in rev per person, per rebill)
-2 people who are going to rebill at your 1 bottle package (let’s call it $59 in rev per person, per rebill).
That’s an extra $1,678 in expected revenue you’ll get from those customers on their FIRST billing cycle.
And you’re adding that amount of additional expected revenue EACH DAY!
Realistically though, majority will rebill more than once.
And here’s the crazy part…
Even if they only rebill twice – we’ve doubled their value to $3,356…
In other words, you’re generating an extra $3,356 in expected revenue PER DAY.
So every day that you do 100 sales, and add 20 new subscribers…
That’s another $3,356 you can expect to collect in the next year (realistically it will be a lot more).
Can you see why this is such a HUGE profit lever for your business?
You already spent the ads to acquire the customer…
This revenue is essentially “automated” sales.
Now let’s get a bit more granular…
The math on this one is pretty simple:
No matter if the customer is rebilled every 1-month, 3-months, or 6-months…
If we assume two rebilling cycles…
As in, they’ll be re-billed twice in the next year.
Additional Expected Revenue Per day = $3,356….
365 Days in a Year…
Equals –> $1,224,940 in extra revenue you are generating.
And this is coming from just TEN customers per day!
Talk about the 80/20 Rule in Action (or in this case 90/10).
Again…
You’re not having to pay acquisition costs when these customers rebill in the future.
So your cost to generate that extra $1.2 million is modest…
At most maybe $200,000, depending on margins, tech, etc.
Even that’s aggressive though, so it’s probably much lower than that.
To that end…
I hope this article helps you see why subscriptions are one of the fastest ways to add 7-figures to your DTC business.
Said differently — one of the EASIEST ways, too.
