Finding new solutions to leverage the sales of a business is a constant search. After all, consumption habits change and brands need to keep up with all the changes and trends that arise over time.
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Signature clubs did not appear recently, but over the years they have gained more and more supporters and formats. With this, companies of all sizes turned their eyes to this business model that continues to grow.
In this content you will learn a little more about subscription clubs and understand why they bring great results.
What is a subscription club?
Subscription clubs fit into recurring business models that market physical or digital products.
Here it is worth talking about the difference between a subscription club and a subscription model. They may look alike, but they're not the same thing.
The first consists of the recurring receipt of pre-selected or not pre-selected products, which are commonly curated by specialists and also offer differentials to buyers. Experts understand what drives a subscription club consumer's buying journey to offer what they are looking for.
The second, the subscription model, does not necessarily need to be products and does not even go through the scrutiny of an expert. These are products or services contracted on a recurring basis.
With the following examples, this understanding will become even clearer.
Imagine that every month you receive a box of wines at your house. This box contains your favorite wine, another surprise and snacks that harmonize with the wines. It is worth noting that this surprise wine comes with information from an oenologist. In this example, you are part of a subscription club.
Examples that fit perfectly into the subscription model are Netflix and Spottily. Both offer streaming services, one for movies and series and the other for music, which you hire and pay for the service on a recurring basis.
Two subscription club models
As we said, there are two most common ways for subscription clubs to work, selling products pre-determined by the customer, or not – when the products are a complete surprise to the purchaser.
The two most common signature box variations are:
Closed subscription box: this is the case when the subscriber does not know what he will receive in his product box. In it, one of the main purchase motivators is the duration carried out by the brand and the indulgence of receiving something new every month.
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Open subscription box: in this model, it is possible for the consumer to customize, to some extent, the items that will be in the box.
Nescafé Dolce Gusto is a great example of this model. At the Dolce Gusto subscription club, the subscriber chooses the plan and knows what he will receive. The plan varies depending on the quantity and flavors of the capsules.
Advantages of Investing in a Membership Club
Below are some of the main advantages of investing in a subscription club for your business.
The customer experience is the focus of subscription clubs, in this sense, this model is also a way to attract fans for your brand.
That's because the recurring payment model also allows you to build a consistent, trusting relationship with the consumer. With this, it is possible to achieve customer loyalty and leverage your business' sales.
Assertive Marketing Strategies
This closer relationship with the customer also allows your brand to know their entire purchase journey, understanding their needs and desires, in order to put even more efficient marketing strategies into practice.
Delinquency reduction happens in the subscription club because the client makes a contract through recurring charges. That is, it informs the credit card data and the amount is automatically debited, within the specified period.
In this way, it is possible to reduce the chances of the customer forgetting the payment date and, thus, the default rate is reduced.
In addition, within the payment platform there are tools that facilitate control over charges. Thus, for the entrepreneur, it is even easier to manage finances.
Having a business in the subscription club model, allows you to have a forecast of the amount of products needed to meet demand in a given period.
Consequently, the control of replacements and contacts with suppliers is also more assertive. Sales forecast
As we said, subscription clubs are part of a recurrence model and charge from recurring payments. This billing model enables the business to forecast billing for the coming months. This reality greatly favors the calculation of expenses and profits.
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