If you’re old enough to remember Book-of-the-Month or CD clubs then you’re old. Like me.
A colleague and I were discussing these venerable veterans of the direct-to-consumer business model the other day and we both agreed that even though times have changed, you shouldn’t underestimate the timeless viability of continuity programs in your business. As my colleague put it, “it’s the gift that keeps on giving.”
The mutual benefit of continuity programs – and there has to be mutual benefit for them to be successful – offers wins to both sellers and consumers.
Benefits to sellers:
- Increased revenue from repeat sales
- Decreased customer acquisition costs
- Increased customer loyalty
- Enhanced ability to forecast and a stabilizing effect on sales, inventory and other fluctuating business metrics
Benefits to customers:
- Reduced hassle by removing need to re-order
- Preferential pricing
- Exclusive “member only” benefits
If the product or service you sell can be packaged in a way that permits delivering it on a continual basis it’s a proven fact you will see positive business results. But how can you determine if your product or service is a good candidate for consideration? Programs like this can be successful in a wide range of industries and across a wide range of products and services:
- Consumables – inkjet cartridges, toilet paper, nutritional supplements — you name it. If it gets used up, it needs to be replenished.
- Time-based subscriptions – The perennial “…of-the-month” club. If offered as a finite series it’s a great gift and can be a gateway to further customer engagements.
- Content –Materials published at a regular cadence offering subscribers educational, training or other valuable information in ‘installments’
To determine if your products would be good candidates for a continuity program evaluate the following:
- Are your customers’ needs static or do they change frequently? If their needs don’t change often, you’ve got a candidate.
- Does the product get consumed quickly or does it need to be replenished in a timely manner? If so, you’ve got a candidate.
- Is there a need to continually provide updates for informational, educational or entertainment purposes? You’ve got a candidate.
- Would auto-delivery be viewed as a time-saver or reduce stress for the customer?Candidate!
To ensure success for your program, you’ll want to be sure to watch out for these pitfalls:
- Make sure the customer knows they’re in charge. People are savvy and want to be in control. It’s important to make sure your cancellation policies and guarantees are well documented and publicized. If the customer understands the win-win strategy at the core of the arrangement and that they have control of getting what they want, when they want it and have the ability to adjust course at their whim,any skepticism can be converted to loyalty.
- Don’t over do it. If you’re using a contact center to help customers with their purchases, take care to make sure you don’t over-sell. Making sure your reps are professional, knowledgeable and well trained can mean the difference between successful auto-delivery programs and customer service nightmares. Explain your offers. Explain the benefits. Explain the options the customer has to adjust the program if their needs change, or they change their mind. Stop. Let the customer decide. If you’d like to learn more about how optimizing your contact center can increase your revenue, take a look at this recent article that expounds on the topic.
- Make sure to work with partners who can help you deliver. Put simply: not every ecommerce, contact center, or fulfillment service provider has systems and business processes suited to handling the sometimes complex transactions associated with a continuity program. The ideal partners need to be able to accurately track customer history, time replenishment deliveries, ensure date and lot coding for products (especially critical to Pharma, and Foodstuffs) and produce business intelligence reporting that allows you to measure the success of your program. (Bonus points for partnering with a provider that can manage multiple facets of your business to deliver you economies of scale and synergies between your fulfillment and customer service divisions).
- Double check your forecasts. While continuity programs can be advantageous to help you plan inventory, if you under forecast and have a successful program the results can be disastrous. Have a solid backup plan to make sure you’re nimble and can react quickly if you need to triage a situation.
It’s ok to poke fun at the jelly-of the month club subscription your boss gave you last Holiday, but don’t dismiss the idea entirely. If your business has a good candidate product or service then a continuity program might make a nice addition to your consumer offering.