"It’s not about how hard you row. It’s about what boat you’re in"
I came across this quote, and it inspired me to record this podcast because it’s very true when it comes to the subscription box industry.
Everything dosn't have to always be hard and there are choices you can make as a business owner to make things easier for you and increase your chances of success.
Listen to this podcast and it will help you put things in perspective.
The Subscription Box Experts Academy Opens On March 12th
Click Here To Join The Waitlist
"It’s not about how hard you row. It’s about what boat you’re in"
I came across this quote, and it inspired me to record this podcast because it’s very true when it comes to the subscription box industry.
Everything dosn't have to always be hard and there are choices you can make as a business owner to make things easier for you and increase your chances of success.
Listen to this podcast and it will help you put things in perspective.
The Subscription Box Experts Academy Opens On March 12th
Click Here To Join The Waitlist
Welcome to Subscription Box Answers with your host, liam Brennan. You're no rubbish, no crap. Straight to the point podcast with real, actionable tips, real strategies and insights from the industry which will help you start and grow your own successful subscription box business. You ask the question, you ask the questions, liam gives the answers. It's as simple as that.
Speaker 2:Welcome back to a brand new episode of Subscription Box Answers. I hope your days going really well and I hope business is going really well. In today's episode, I am covering a quote that I recently read, which I think is very relevant to the subscription box industry, and it actually inspired me to record this episode, and the quote is it's not about how hard you roll, it's about what bolt you're in Now. Look, you may be at a point in your business where you're unhappy with the results or revenue that you're generating and you wish you could speed things up, you wish you could acquire more subscribers and you wish you could make more money. And if this is you, then this podcast will help you put things in perspective.
Speaker 2:When it comes to the subscription box business model, the money is 100% in the execution, and I've said that to so many people so many times over the years. Think about it right. There's literally no barriers to entry at all when it comes to setting up one of these companies. Anybody can set up a subscription box from their bedroom and everybody has the same opportunity to build a life changing business, and I know this because we achieved it in Busterbox, and so have so many other people that I know in this industry, but that's what's so brilliant about it your background and your education don't make any difference at all, and everybody has the same opportunity to build something great. But if you truly want to be successful, it all comes down to the execution, and your subscription box idea on its own is simply not enough to get anywhere. It's the truth, and look, here's an example that I'm going to use. There's so many different boxes in this industry that are all similar to each other, and if we picked out three of them, say, in the beauty niche, right, it would look something like this the first company would have 20 subscribers and the younger can't seem to do anything to push it forward. The second company would have 3,000 subscribers and it's making very good money and the younger has a great life. And the final company has 20,000 subscribers and the company is generating eight figures and can be sold for a life changing amount of money. As you can see, all of these businesses have a very different outlook, despite having a similar type of box.
Speaker 2:Now, this is obviously an example that I made up, but there are so many different examples of this across the industry, in every single niche, that you can possibly think of and I know this for a fact because I see and I help a lot of these businesses and the difference between success and failure is normally down to the quality of execution by the founder. That's simply it. But saying that there are things you can do to increase your chances of success and make everything so much easier and that's why the quote it's not about how hard you roll, it's about what both of you are in inspired me to record this, because some business owners put themselves in a situation where everything is way more difficult than it actually needs to be, and this can happen right from the start when they decide on their niche. Unfortunately, some niches will be way harder than others to get any kind of positive traction in, and this could be down to multiple reasons. I'll give you an example.
Speaker 2:I'm obviously in the dog toy and treat niche with Busterbox, which is a very big market, and we currently only ship our boxes to the UK and Ireland. Now, ireland is absolutely toyy and we've never been able to grow past a thousand subscribers over here. So a few years ago well, it's a good few years ago now but we had to go to the UK and that actually allowed us to grow past 10,000 subscribers. But if we just stayed in Ireland, we would be stuck at a maximum of a thousand subscribers and our company would be a fraction of its current size. But we'd probably be doing similar work as we're actually doing now, but we'd just be earning way less money. Now a similar business to mine in the US market would be able to grow way bigger than a UK or Irish based company just because the US market is way bigger. There are more dogs and there are more high quality customers who can afford the box every month. Now you may be thinking why haven't we just gone to the US? There's a whole other story behind that which I'm not going to get into now, but all of those things make a massive difference in how big and how fast you can grow. I use this example because I'm familiar with it from my own business, but I always see it across the industry.
Speaker 2:Things like your market size, customer purchase and power and location play a massive part in the potential of your business. If you get them right from the start, you make everything so much easier on yourself. Now I'm not saying you need to go with a completely mass market product that has gigantic competition. There is a lot of money to be made in different niches, but you still need to do your homework and pick something with a high ceiling, and that's why it's not always a good idea to compare your business to somebody else's, because they could be playing within completely different rules to you. You could both be working as hard as each other, but their niche allows them to scale quicker than you. That may mean nothing whatsoever other than the fact it will take you a bit longer to get where you want to go, and you may need to be more tactical on your journey. If somebody else picked a niche which is easier to get traction in, has a bigger market size and customers with better purchase and power, well then, yeah, it's probably going to be easier for them to make their business a success. It's just reality.
Speaker 2:Now, another example which is inspired by it's not about how hard you roll. It's about what about your reign. It's subscription box metrics and margins. If you set up a business with terrible margins and a high churn rate, it will always be way more difficult to succeed compared to a business with great margins and a really low churn rate. When you have a high margin, you can spend more to acquire a customer, giving you a massive market advantage and making your life much easier. It also means you're generally more profitable, so you have a better business and quality of life as it opens up more opportunities for you. Example you can pay yourself more and also hire staff to support the business as it scales, giving you and your family more freedom.
Speaker 2:If you have a terrible margin, you're always looking over your shoulder when it comes to ad costs, which stops you from really growing and also puts you in a difficult position where you can't hire any help and you end up having to do everything yourself or on a very tight budget. This is falling at the start, but tell me how fun it is when you're four years in and you're working 15 hour days trying to do every single task yourself. It's not really fun, damn. You can make certain choices which will make everything so much easier. So when you have the opportunity to do that, please take advantage of it. The exact same thing applies to Churn.
Speaker 2:If you pick a model which has notoriously high churn, it will be much more difficult to scale up and build a sustainable business. You'll reach a point where you hit a subscription treadmill and the marketing cost to grow any further becomes unsustainable. That's why it's very smart to do your research right at the start and figure out what your chances are of having a good retention rate with your idea. Can you keep the average person signed up for a bare minimum of 10 months? Is there any data out there which will back this up? If you think you can do it, then it's a good idea to proceed. If you think it's going to be a struggle and your retention is going to be terrible and it's going to be very hard to get somebody on average to sign up for a long period of time, well then it's probably not a good idea to proceed and the smart thing to do is go back to the drawing board and make some adjustments. This business model only works when you keep somebody signed up for a decent amount of time. I always say 10 months on average, at least 10 months. If you can do that, you'll be able to build a sustainable business. If you think your idea probably won't keep somebody engaged for 10 months, then it's probably a good idea to go back to the drawing board and make some adjustments, because it doesn't always have to be so difficult Now if you've been running your business for a while and you feel like you've potentially made things difficult for yourself already.
Speaker 2:Please don't panic. There are choices that you can make right now which can help you a lot. Sometimes these choices are right in front of us but, for whatever reason, we either don't see them or we make excuses about why they won't work. I'll give you some examples. If your churn is terrible and you've tried everything you can think of to fix it and it's still not improving, you may need to take a step back and look at the bigger picture. I will dig into your data to find out what are the three main drivers of churn and then come up with a solution for those problems. I've said this before, but one of our main drivers was dogs destroying toys too quickly. Once we gave our customers the opportunity to upgrade to tougher toys, this lowered our churn overnight.
Speaker 2:You defo have main drivers of churning your business and if you can identify them and actually come up with proper solutions, that will make a massive difference. Alternatively, if you have tried that and aren't getting any joy, a simple fix might be changing from prepaid subscriptions to commitment terms, getting rid of your three month plan and replacing it with a six month plan. That is usually a quick fix you can implement to reduce your churn overnight and if you're on sobly, you can do this with the commitment term feature. The idea behind it is everybody who will normally go for the three month ends up going for the six month, and it increases your customer lifetime value overall and improves your retention rate Very simple. Likewise, if your margin is a problem in your business, the simplest fix is to raise your prices. Now you may have some preconceived notions about what people are willing to pay, but unless you have done any kind of price testing, you're probably wrong and you're probably leaving a lot of money on the table. I actually recorded a podcast around the correct way to do price testing, so definitely check that out. It's called Subscription Box Price Testing and it will help you massively with this.
Speaker 2:Or if you've done all of your price testing and you can't go any higher and you still face some margin problems, then maybe it's time you started making plans around cutting out all of the middlemen who are making money off your products. Put them out and go directly to the source yourself and improve your margin that way. Likewise, if you've discovered that your market or your country is too small to scale to any substantial size that will provide you with a great life, then you'll need to either change your offerings slightly to attract more customers or consider expanding into a bigger country with what you currently have. There are always options with these things, but the worst thing you can do is bury your head in the sand and make things intentionally difficult on yourself. I could list so many other examples in this business model where people make decisions that make things much more difficult than they need to be, but hopefully you get the idea of what I mean.
Speaker 2:Now. Remember, if things are hard, there is normally always a way to make things easier for yourself, and sometimes the difference between success and failure is the ability to identify this and do it. The ones that go far with this business model recognise this and they make it happen. Remember, it's not about how hard you are, it's about what about you're in. I hope that makes sense and I hope you got value from this podcast.
Speaker 2:Just a reminder the Subscription Box Experts Academy will be opening tomorrow, so if you want my help scaling up your business and making it a massive success in 2024, I highly recommend joining Head over to SubscriptionBoxExpertscom right now and join the waitlist. I'll only be opening the program to 50 people and there's a lot of people on the waitlist already, so I'm sure it will sell out quickly, but there's still a chance to join. So if you're interested, head over and join the waitlist now. I look forward to working with 50 of you tomorrow. We'll be back next week at the exact same time. If you have a question, as always, head over to SubscriptionBoxResourcescom, join the free Facebook group and post your question there. Thanks very much and have a great day.