Subscription Box Answers

Talking Subscription Acquisition & Retention (with Matthew Holman)

• Liam Brennan

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Description for this Episode of Subscription Box Answers:

In this episode of Subscription Box Answers, Liam Brennan sits down with subscription expert Matthew Holman, founder of Subscription Prescription. Together, they dive deep into the secrets of acquisition and retention for subscription box businesses. Matthew shares actionable insights on creating irresistible offers, building subscriber loyalty, and crafting powerful customer experiences that drive retention.

They also discuss real-world examples of what makes high-converting offers, the impact of market shifts in the subscription space, and why getting the offer right is the key to unlocking growth. Whether you’re just starting out or looking to level up your existing subscription box business, this episode is packed with tips and strategies you can implement right away.

👉 Subscribe to Matthew’s Subscription Prescription newsletter for even more insights: https://www.thesubscriptiondoc.com/


If you have a question you want answered on the show head over to www.SubscriptionBoxResources.com, join the free facebook group and post your question there.

Speaker 1:

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 questions, you ask the questions, you ask the questions. Liam gives the answers. It's as simple as that.

Speaker 3:

Welcome back to a brand new episode of Subscription Box Answers. Today we have a very special guest box answers. Today we have a very special guest, Matthew Hallman, who is the founder of Subscription Prescription. He's a subscription consultant, he has a newsletter, a podcast, and you may have even seen his very insightful posts on LinkedIn about subscriptions. We're really excited to have you on. How are you?

Speaker 2:

I'm doing great, liam thanks for having me on, man no problem.

Speaker 3:

You obviously had me on your podcast there recently and I've been meaning to catch up with you for a while because I've obviously because we're both in the subscription world but I always see your posts coming up on linkedin literally every day over and over again. A lot of time into writing them posts, but they're very, very good and if you have a business, any kind of subscription business, I definitely recommend following machu on linkedin. You'll get a lot of value. Um, so let's jump into it right. First of all, what made you get involved in the subscription world?

Speaker 2:

yeah, it's kind of indirect.

Speaker 2:

I was quite a few years ago I was working as a marketing director at a SaaS company that was selling logistics, so shipping rates kind of stuff, and wanted to branch out, do the founder thing and just kind of like gotten introduced to somebody who's looking for a marketing co-founder and that was David Bradley, the founder of QPilot, which is a subscription software with integrations on WooCommerce and Shopify, and so that's kind of where I first started learning about it.

Speaker 2:

He's explained to me how the business works and QPilot is a solution that is very logistics-focused and product-focused, and so it was a natural like fit for my background and the longer we were working together and working with our customers, I realized at some point that I liked more working with our individual customers building their programs than I did selling SaaS, and maybe that my talents were more in that area than necessarily being a SaaS marketer. So I think just getting that, for me it's just like it's really complex and yet like kind of like beautiful I think. I think a lot of people worry too much about retention and not enough about acquisition and how they're acquiring subscribers and so like. For me it's just one of those things where I kind of just started to get it and see the whole picture and and I love creative content and education and you mentioned the posts online, so that for me is like a. It's actually kind of fun doing that and trying to figure out different ways to explain stuff to people.

Speaker 3:

So, yeah, so that's it in a not not too big nutshell, but um, yeah, anyway, thanks, and what would you say is your favorite thing about subscriptions if you go pick it?

Speaker 2:

I think yeah, I, I think what's probably my favorite thing to maybe harp on a little bit, which kind of explains what is my favorite thing is, I think, as, as subscription brands, we're often too, like um, obsessed with keeping people from leaving. You know, and the metaphor I use is like a gym membership. It's like you know, here in the U? S it's really difficult to cancel a gym membership. It's like this big, huge pain and stuff.

Speaker 2:

So subscription brands often spend a lot of time trying to like figure out how to get somebody to not leave, but the really, really good ones and where I think the opportunity, my favorite part, is figuring out how to make really powerful experiences for the people that like you and that love you. So it's like, you know, how do you create the membership where somebody's bragging about it to their friends, where they feel like it's a no brainer, where they feel like they're stealing from you because it's so valuable? You know, like I have a movie club membership where it's like you know, we're getting 20% off concessions, we're getting a free ticket and it's 10 bucks a month in US, which is the value. It just seems like I don't get why they're doing it that way, but I'm happy to keep paying it because it just feels like a steal to me. So it's like figuring out how to do that unlock really, really valuable relationships with your best subscribers. That's my fun part.

Speaker 3:

I agree with that a hundred percent. And that subscribers that's my fun part. I agree with that 100. And that movie membership that you mentioned is very interesting. I'd probably cast it somewhere through amazon prime, like everybody. Yeah, is a member of amazon prime, but does anybody know when they get billed? No, I couldn't and I don't care. Like I'm never right, never gotten to answer this. So, leaning a bit further in that direction, what kind of? Do you have any examples around subscription boxes, possibly, who are achieving that, or some tips for anybody with some box to help them achieve that?

Speaker 2:

yeah, I mean I I sometimes laugh about bringing it up because I feel like we talk about them all the time, but battle box is a great example of this. Right, like, yeah, they have different tiers of boxes. Um, and one of the things, some of the things that they do really, really well, john roman, his team, are they're creating content around, unboxing every time so that you get, when your box is in the mail, you're getting this video. That's like exciting it for you. They have great content for people about their products.

Speaker 2:

But then, like last year, they did this golden ticket thing where they gave away the opportunity for five or six people to come out and fire a tank, and the thing that I thought was really interesting was they didn't do it as a marketing gimmick to acquire new subscribers. They actually surprised existing subscribers. Like they picked a cutoff date and if you're a subscriber from like June 1st till the end of the contest, you were eligible and you couldn't get in. You couldn't be eligible unless you were already a subscriber when they released it. So it's like that's a really, really great example.

Speaker 2:

I think there's a lot of other companies with. Like ButcherBox is a fun one where you get, you know, like lifetime chicken wings if you subscribe, like the ability to like get extra free product gifts. One of the clients I work with was like hey, we want to at month three or month four, we want to give an automatic upgrade to people, like if they didn't buy the premium device, we want to give them the premium device on the third or fourth renewal. Like we're going to start testing that because it's they just want to start rewarding people and giving them more, because they want them to get more value out of the subscription yeah, great examples, I think.

Speaker 3:

Battle box they have something new coming out again, don't they?

Speaker 2:

I can't but the battle games yeah, they, they did some survival games, um, so kind of like that, uh, that lone survivor, uh like, uh, like document. I think mimicking there's a lot of like reality shows, at least in the U S. It feels like uh, with all the outdoor stuff, and so, yeah, they're doing like a games like that and releasing content. They're they're content masters Cause. There it's, you know.

Speaker 2:

Anyway, I think it's a fun, like even some of the the what you might think is more niche subscription box, like if you had a cat subscription box, like you could do tons of content right, you could do extra gifts, you could do a fun little community things. Again, I think it's just kind of more about this mindset of what's going to get people excited that they're going to want to stick around and become more invested. Not so much. Okay, we've got the sale, how do we make sure that they're not going to? They're not going, they're not gonna leave, we're not gonna want to leave, and so it's it's like two sides of the same coin. But but I think that when you go the other month it's like a mindset shift.

Speaker 3:

I think you make better choices for as a business, yeah, yeah, I agree with you completely and, like from some of our own learnings in both the box, we do spend a lot of time working on churn. How how can we cut down churn? We have people on phones. The majority of people come from 6 and 12, want subscriptions. We try a lot and a road we went down for a while and it did work to some degree. Perks and rewards, where we basically gave people. We partnered with a company to do it. But what we kind of found was if people want to cancel churn because of a genuine reason like the dog doesn't like it or whatever, I don't know too much product our perks and rewards. They weren't really keeping that many people like our regardless for that. But I love the example you were putting where. Just make the experience so good that even if they do cancel they're so blown away they'll tell people about it. There's actually a good chance that they'll come back at some point in the future when their circumstances change yeah, yeah, absolutely I.

Speaker 2:

I like using gym memberships a lot because I think a lot of people are familiar with that as a model like all over the world, and we think, like that, the gym that I go to there's a typical subscription and then there's a tier level up where you can go to. You can get access to more features in the gym and go to they have have different locations and then they've got, like you know, coaching sessions and like like classes and stuff like that. So so the idea is like, yeah, they can get a lot of people on the general subscription. That's kind of like their main revenue driver. So I want to qualify and say you still need to put stuff in place to like address churn and try to improve retention and all those things.

Speaker 2:

Like don't don't don't get me confused with not saying like you need to do that stuff too but but you start adding on layers of of things that are more premium, that people can pay more for. So if somebody goes to a gym and they're feeling lost or they want to do a class cause they feel like it'll be better for them, like great, like offer that, let them pay more for that, and those types of people will see better results and will love the gym more because of that offer you're making. So just trying to think through that kind of way of addressing people and giving an option. So even if it's like 10% of your subscribers that are now like 20, 30% more profitable, they're driving a massive amount of profitability for your business as opposed to, say, the other 80 or 90 percent yeah, yeah, that's some really good advice.

Speaker 3:

So, moving on to customer acquisition, because this is why everybody wants me to talk about all the time, and everyone wants to talk about getting new subscribers. What are you seeing working out there at the minute?

Speaker 2:

yeah, I think on the box side, like, we're seeing a lot of success with people, um, showing's in the box from past boxes, because people spend a lot of time trying to wondering what they're getting. I know you've talked about this in the past, but the idea of, like, using mystery gifts or mystery items on top of that, I do think there has to be a you have to do a really good job of. If you are showing items, you have to do a really good job of showing the perceived value of those items. Showing items, you have to do a really good job of showing the perceived value of those items. You know, if your box is 30, 40, 50 US dollars, then make sure that that feels like it's 120, $150 worth of items. But ultimately, I think there's a you have to test through different offers and so simple things like gift with purchase I know that's something you're doing at BusterBox, right With the beds I mentioned. Like ButcherBox, the idea that you're getting, like free lifetime wings. You know, if you're selling skincare or a skincare box, that you're getting an extra add on and so what I think it's. So there's this idea of like you have to create an offer or a gift.

Speaker 2:

But then there's also how you position those things. It's like how you make those things look on a page. Like you know, if you go to Battlebox's website, they've got these four options of like you know, basic all the way up to advanced. And so when you're looking at them, you see that, oh, okay, well, this is okay. Like, if I'm price sensitive, maybe I look at the lower costing one, but when I see how there's extra items in the bigger ones, then my brain is starting to think about well, wow, that only costs us much more. I'm getting all this stuff out of it. So there's a way to position your value. So that's what's hard.

Speaker 2:

If you just have a solo box, you're just doing one thing. It's difficult sometimes to position the value. So you have to have gifts or you have to have some other way of making that box feel more popular or more valuable to people. And this, of course, is all taking for granted the fact that you have at least a decent fit on people wanting your box or thinking that what you're doing is interesting.

Speaker 2:

You know, um, a friend of mine is running a. They started out doing content around um, kids that were hitting the transfer portal in sports. So that we're going to go play like college volleyball or something like that, and they started doing boxes for college athletes and for cheerleaders, for younger kids, and so they're not necessarily doing a ton of complexity on the offer front, but they're doing a good job of realizing like hey, if you're a cheerleader and you're 12 or 13 or 14, like getting like extra ribbons and bows and these other things to like glam yourself up for your competition is really, really valuable. So they're doing a good job of acquiring customers that way. But it's always about trying to figure out how you can lower that cost to acquire a customer, trying to position a gift or some other option to make it feel more valuable so that people will buy it more often.

Speaker 3:

Yeah, I think we're definitely on the same page when it comes to offers. I find it crazy even to this day we've been doing BusterBox for so long how much difference it makes with the offer. The offer is literally the key, the key to everything, to getting the cacking base, the, the churn, the lifetime value. It's all with the offer. Our business does not work when the offer doesn't work. If the offer goes there or if it doesn't convert, our business won't work. Right, get more people in all that stuff and what kind like. Have you come across some any interesting offers? Like something crazy. Somebody did that. You'd just be thinking, oh, that doesn't really have a chance of working.

Speaker 2:

They did it and it just blew up yeah, I mean, I think right now like dollar shave club's doing like a five dollar starter box to try to get you onto a subscription which seems like really, really cheap, like for the cost of just the packaging, that kind of thing. Um, I think I'm trying to think there's like some really really ones that are out there. Um, I'm always, honestly, I'm always surprised what people get people to commit up front to longer time frames, like you. We've talked about this in the past, about prepaid options, and I'm a big fan of them, but it's sometimes difficult to get somebody to go. Oh yeah, I've never heard of you before, but I'm going to commit for a six month, like you know, um subscription but, but it but it does work, and so I, and I think so that one's always kind of odd. I do think like the again, I thought of butcher box, I think the whole like you know, get a free Turkey with your. Like, if you're subscribing in October, november, you're going to get a free Turkey, or you're going to get free chicken wings for life. I think those types of things are generally cause. It just makes me worry about profitability.

Speaker 2:

Another one that's really interesting is like second month free. So if you subscribe and pay, then your second shipment will be free. So they're trying to get you to like that second renewal or that third shipment. The other one would be like free with shipping, which for the most part doesn't work, but I know a few brands that have made that work. So free with shipping is, you know, like, say, your box is $50, we'll give it to you for free if you pay $10 for shipping, and so the idea is your trip.

Speaker 2:

So I think the interesting thing is it's really about like in your business, if you have a decent understanding of what retention looks like, like, what lifetime value looks like on subscribers, you can get a little more creative. But as you know I know cause we talked about this in my podcast you actually have different offers, influence, different types of people. So if you give something away, people might not value it as much. You know that's what's interesting about it. If you can get somebody to commit to your brand for six months, like they see something in you that's really worth and they're they're excited and they're going to try it out.

Speaker 3:

Those types of customers are hard to get but they're easy to keep because, like they have, a really strong assumption and if you can figure out what that assumption is, you can deliver and deliver and deliver. Yeah, yeah, definitely. And in regards to the touring being affected by the offer, yeah, so it's all true, we like, if we do any kind of free box or anything, you will you'll have higher churn, but the cac is so low that it can still works. It still actually works. You just have to measure the cohorts.

Speaker 3:

Do you have any thoughts on way the way the market has evolved over the last few years? So say back, like even before and the pandemic and throughout the pandemic, there were so many different boxes popping up and obviously COVID gave everybody a big boost and people who may not have had product-to-market fit suddenly had product-to-market fit because a lot of people were sitting at home. It was very easy. You could just basically put things in the box, take pictures and run ads and pretty much get people to buy and you can see the market has evolved. The subscription box model has been around for a bit longer. Do you have any thoughts on that?

Speaker 2:

yeah, I think there's certainly a proliferation of a lot of boxes and then you see bigger players like start to like get involved, push people out. I think it's much more competitive. Um, and I think that surprise and delight it just so like subscription box the name is surprise and delight the idea you're you're kind of like picking and choosing stuff to send people each time. I think it's, I think it's well, it's obviously slowed down, covid. Everything in e-commerce is slowed down. I. I think that the surprise and delight space is maybe not just growing as effectively, as aggressively as it was, but it's still there.

Speaker 2:

I think that there's still a big opportunity for people that are innovating. It's just that it's more difficult to cut through the noise and you have a lot of other e-com companies that are now offering subscribe and save options. You have a lot of other e-com companies that are now offering subscribe and save options. I think beauty boxes are a really good example of this, where, you know, there there's like a really strong demand for beauty boxes early on with Ipsy and and and now we're seeing that kind of like pulled back a little bit, but there's still like a lot of people out there that are interested in testing and trying things. So I think it's just like a different type of consumer that enjoys that kind of like discovery process and it's not just as it's not as many people that are finding that offer attractive.

Speaker 3:

Yeah, and if you could give everybody one tip for 2025, what would it be?

Speaker 2:

Yeah, I would say, spend time testing offers. Um, I think that you know I've I've gone through this math in my newsletter. I've talked about this ad nauseum. Like if you get better at first or second month churn, then you can usually keep, you know, maybe 10, 20 more of your subscribers. If you can unlock the right offer, you can acquire 200 times more subscribers. So the impact on your business is going to be much, much better. And not to mention part of that testing is like seeing how people drop off after the fact.

Speaker 2:

So I would say, like the one thing if you're going to work on for 2025 is how can we be more creative with our offer? And being creative with our offer means you should be surveying existing customers at point of purchase about why they subscribe, what they liked, talking to subscribers you've had along for a long time. Talk to new subscribers and find out what they thought was interesting or what's compelling Like. If you really get into like what's interesting for them, like both good and bad about why they subscribed, then that can hopefully give you some inspiration on what you can do. So just try testing with different offers, even if you're doing like a, you know, buy one, get two months free by you know, prepaid three months or prepaid six months.

Speaker 2:

Looking at a bigger gift with purchase. Again, look at your numbers, cause if you can get somebody to go from being a one month or two month subscriber to being a four month or five month subscriber, then it makes sense to give away a 50 gift up front, um kind of thing. Um, or, or at the very least, try to try and upgrade, so getting somebody to add a mystery item, or buy the premium box instead of the the average box. So give people an option to upgrade. Um, that would be the my. My one tip is just put much, much more time and effort into thinking through your offer brilliant and I agree 100.

Speaker 3:

I think it's the one thing that holds people back with their marketing. They're going in the offer they may have a gold box. The offer is rubbish. To be honest with you. It's rubbish. So they end up with every customer acquisition cost. People don't want to pull out their credit card and respond on the spot. Sign up. You've resistance. Yeah, I agree, get the offer right and it makes everything so much easier. Okay, thanks very much for coming on. I really enjoyed that. It's always great talking subscriptions with you. You have a newsletter and I definitely recommend everybody listening to go over and subscribe. You'll learn a lot from this. Where can they go to subscribe to the subscription prescription newsletter?

Speaker 2:

yeah, definitely, it's the subscription doccom um. Or you can look for me on linkedin matthew holman subscription doc.

Speaker 3:

You'll be able to find it thank you, we'll put the link in the show notes. We'll be back next week at the exact same time. If you have a question you want answered on the show, head over to subscriptionboxresourcescom, join the free facebook group and post your question there. Thanks very much and see you next week. Bye.