Ecommerce Subscription Playbook & Benchmarks: Operators Build (E6)

Matt Bertulli (0:00)

Okay, welcome back to Operators Build. This is episode six. Today, it is Cody and myself. We have Aidan from Skio, we have Bernard from Omnisend. We are gonna talk all things, subscription, business model. Why are we building Winks subscription first? What is the whole purpose of this? Why is predictable recurring revenue a good thing? Is it more profitable than one-off sales, less profitable? How do we think about cohorts? How are we thinking about messaging, recurring fees? Everything that is the subscription economy, we are going to cover in this episode. We are talking pricing a little bit. We are going to actually even, you are going to see Cody actually pull up our buy box and show you how we are thinking of our subscription offer out of the gate.

Aidan may roast us a little bit. You are going to love this episode. It is a bit of a fire host, so I am going to warn you right now as you start to listen or watch. By the way, you should watch. I am telling you that now. You should watch this one on YouTube.

It is a lot that is going to come at you. And then Cody and I are going to do a little recap at the end because we have a lot of work to do after this episode. Let's get into it.

So, boys, the reason that we got you guys on, since neither one of us has built a subscription-first brand before, we thought this would be an opportunity to have you guys on and kind of school us a little bit. You guys get to see a lot more than brand operators do. You guys have like data on hundreds, if not thousands of brands. We've got a product, it's a sleep supplement, we're selling it as a daily, it's built for subscription, and we want to, obviously, like our goal is as many subscribers as possible, like as many quality subscribers as possible. Bernard, I want you to help us think through communication. So maybe Aidan, take us away. Let's start with the very basics of what we should be thinking about.

Aidan Thibodeaux (1:54)

For sure.

And what I will say is like, one, having access to all of this data makes you realize like one thing, and there is no silver bullet if I could talk to that.

Silver bullet. When it comes to everything in subscriptions, and that's why if you spend a bunch of time on Twitter, like we all do, everybody's going to tell you, I test everything and I can just tell you, having come from the messaging world before I got into all of this, subscriptions are no different. It's test everything and then keep it stupid simple. And what I mean by that is like we have brands come in and it's like, I would say not just keep it stupid simple but don't get lazy too. Nobody wants to do the hard work. Everybody sees like, hey, Skio, Recharge, whatever platform you're on, we've all done a good job building out the features that make this stuff easy. Just because it's easy does not mean you should be spending time there. So upsells, cross-sells, these sort of things. They're exciting, but if you don't have a large subscriber group, they're not going to do anything for you. So if you think about this, I would say simple, stupid basics, or as all of our podcasts, people like to talk about first principles. It's like, hey, you guys are a brand new brand.

What I would prescribe and what anybody in this space is going to prescribe, is going to be completely different if you're a brand with, let's say 50 or 100,000 subscribers. Because then we're going to go through, you might have some great offer and you're bleeding out in a different way. You're not doing enough upsells. You're not doing a good enough job with messaging. But Winks being a baby brand, you have no subscribers, you're net new. What you're about to have is a bunch of traffic. So it's like, hey, think about it very plainly. We're driving a bunch of traffic to the site. What's the one thing that we want to do? We want to convert as many people as possible. So that's where offer testing becomes the most important thing you can spend time on. And literally test everything. Make sure you have great testing software in place.

The offer, I would say the subscription core offer is the most important piece. And that's going to be, what do I get as a subscriber when I sign up?

The unfortunate approach that a lot of brands take is they start to discount. They start to discount way too early. And if you look at a lot of our brands that have, I mean, you're seeing the billion-dollar home runs that are starting to get hit across the space, none of these guys are going discount heavy, right? What they're doing is they're trying to value sell. So we see a lot of brands come on and they'll test with the basic buy box, which is one time versus subscription offer, right? If you have a product that's really meant for subscription, it's not scammy. You just want to be very upfront with the communication and just go all subscription offer. So let's just say like, hey, if you're buying this product, I mean, think about Winks, you guys are better sleep. You can't expect to take this product for one month, be like, hey, you know what? I'm sleeping better. I'm going to cancel my subscription. It's like, hey, I'd almost communicate to your buyer. If you're thinking about buying once, just don't buy it all. Like this is a supplement. This is a commitment. You're investing in better sleep. And then you're going to communicate that in all facets or aspects of your messaging.