Subscription Box Answers

What’s Keeping You Stuck in Your Subscription Box Business (and How to Fix It)

• Liam Brennan

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In this episode of Subscription Box Answers, I explain the biggest reason that keeps Subscription Box Owners Stuck. 

You may have been running your business for awhile, and you're stuck on a certain subscriber number, and no matter how hard you work, you can't break through. 

This has happened to us in BusterBox a few times and the solution was always the same. 

If you are frustrated where you are and feel like you're going around and around in circles and all you want to do is break through, grow your business and earn more money. I highly recommend checking out this episode.


If you have a question you want answered on this episode, head over to www.SubscriptionBoxResources.com. Join the Free Facebook group and post your questions 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 2:

Welcome back to a brand new episode of Subscription Box Answers. I'm not too sure when this episode is going out, because I have a good few recorded. I like to record in advance, especially over the Christmas period, where I will want some downtime to take a break. But happy Christmas. Okay, it's going out sometime around Christmas. So happy Christmas. I hope you have a really good Christmas. I hope you recharge, I hope everything goes well for you, you enjoy some time with your friends and family and you come back in 2025 ready to push things on.

Speaker 2:

Anyway, in this episode, let's discuss what happens when somebody gets stuck in their subscription box business, okay, what usually causes you to get stuck and what you can do to push on, because this happens very regularly and it's happened to us in the past. So when I'm talking about getting stuck, what I mean is right, you've reached a certain level, you're generating a certain amount of revenue, you have a certain number of subscribers signed up and, no matter what you do and how hard you work, you cannot push forward. You've hit a wall and you just can't push forward. This can happen at any level. It can happen with a few hundred subscribers. It can happen with a few thousand subscribers. It can happen at a much bigger level as well. It happens to so many different businesses, and not just with subscription boxes, but so many businesses in general, and, like I said, it happened to us in the past and it's very frustrating. When this happens, you want to push on, you want to keep growing, you want to increase the value of your business, you want to get paid more money, but you just can't do it and you feel like you're running around like a mad person, but no matter what you do, you just cannot push things forward. Okay, I'm going to break this down in the simplest way possible and I'm going to explain what you can do to break through this. But let's talk about why it happens first of all and I'm coming from this from the perspective of somebody who is running paid traffic a subscription box business that is running paid traffic, that has hit a certain level, and that's the majority of businesses out there. If you want to grow, you usually have to run paid traffic. There are some examples where people have grown organically, but that doesn't happen that often. It's very, very difficult to do that. So we're talking about a subscription box business that has hit a wall and is stuck and its main marketing is paid traffic.

Speaker 2:

Okay, with a subscription box business, you're always going to have churn right and you're always going to have a customer acquisition cost. So eventually you're going to reach a place where the number of subscribers you're bringing in matches your churn rate, and that's why you're not growing anymore, and you probably know this. But that's it in the simplest way possible. It, in the simplest way possible, you've reached the level where the number of subscribers coming in does not exceed the number of subscribers going out. So how do you fix this? Well, you can fix this in three different ways. Number one you can lower your churn rate. If you lower your churn rate, if you lower your churn rate and everything else remains equal, you're going to start growing again because you're going to be losing less subscribers and the number of subscribers you're signing up is going to exceed that and you start growing again.

Speaker 2:

How do you lower your churn rate? We've talked about this in previous episodes. You can use commitment terms. You can put people on phones, you can look at the data to figure out why people are cancelling and you can try to solve those problems. You can come up with a cancellation saver, different offers to keep people signed up when they look to cancel. You can do a mixture of all of that stuff and it will definitely help, so you can lower your churn.

Speaker 2:

What's another way you can solve this problem? How can you get grown again again? Well, you can lower your customer acquisition cost. If you lower your customer acquisition cost, you are going to get more subscribers signed up for the same marketing budget. Okay, you're going to get more subscribers signed up and now you're exceeding the amount of people that are canceling. More people are coming ining the amount of people that are cancelling. More people are coming in than the amount of people that are cancelling, and you're growing again.

Speaker 2:

How do you lower your customer acquisition cost? Well, you test different offers. You test different marketing channels. You increase your follow-up frequency by sending more emails. You get better at marketing and copywriting, so you convert more people. You maximize what you're getting off your current traffic. You can do this by implementing a sign up flow on your website which has an email collection point, so you're collecting new leads every single day, which gives you multiple opportunities to sell to these people through follow-up, which will reduce your overall customer acquisition cost.

Speaker 2:

We were speaking to Stefan recently on a podcast and sign-up flows are coming to Subly. So if you're on Subly, I definitely recommend implementing one of those, because it will definitely help you. You can do all of those things okay, all of those, because it will definitely help you. You can do all those things, okay. All of those things can work. You lower your customer acquisition costs. You're going to get growing again. You can do a mixture of all of those things okay, mixture of all of those things. You can do a mixture of all of the stuff to reduce churn. We do do all this stuff in BusterBox. We can tell you when you take all of it on. It is time consuming and does require a good amount of effort and resources, but it's definitely worth it because it can turn the profitability of your business on its head and you start growing really quickly again. So it's definitely worth it.

Speaker 2:

What's the final solution to solve this problem? How can you break through this wall and get grown again now? This sounds so simple, but so many companies don't do it, and we're actually one of those companies and I'll tell you a story about what happened in a bit. Increase your marketing budget sounds so simple and so straightforward. You may have hit a wall because you're simply not spending enough on marketing. You had a budget at a certain level and that's your budget. You're like I'm sticking to this budget and that budget grew your subscribers to a certain number, but now that budget is no longer sufficient to keep you growing because all that's happening is you're bringing in enough subscribers to replace the subscribers who cancelled and you've hit a wall.

Speaker 2:

A good few years ago in buster box this is going back a long time now we hit 50,000 euro MRR, so we are generating 50,000 euro per month in the business. We hit this and we're like this is amazing. We're growing really quickly. We're doing 50 grand a month. Let's keep going. Bang, we hit a wall.

Speaker 2:

We were running around in circles for a very, very long time trying so many different things and no matter what we did, we just could not break through 50,000 euro per month. We were trying everything. Literally everything could not break through, simply could not break through. We're stuck at 50 grand a month, exactly 50 grand a month. Some months it would go up slightly, the next month it would come down slightly. Just could not break through. Right like this is so annoying. Is it a market size? Is there not enough people out there who want a dog subscription box, which was just so far from the truth, but these things to be going through your head. You create these scenarios. What solved the problem was so simple we just had to spend more money on marketing. That was simply it. We had to spend more money on marketing to get the company growing again, because the budget that we had was maxed out. We were spending the same budget at 50 grand a month, compared to 30 grand a month or 35 grand a month. We never increased it. As soon as we increased the budget, what happens? We're growing Bang. We're at 100 grand a month before we knew it and we kept growing.

Speaker 2:

Now I know for a fact there are people who are listening to this podcast who feel like they've been going around and around in circles for years. You can try everything that I explained earlier in the podcast about reducing your churn, all that stuff. You can try everything that I explained about reducing your customer acquisition cost and that will get you growing. Okay, that definitely can help, but maybe you've tried that already and maybe you've maxed all of that stuff out because at a certain point you will max it out. You simply won't be able to get your churn rate any lower. It just is what it is. People cancel every month. You've done everything, you've got it as low as it possibly can, but people still cancel. No matter what kind of subscription business you have, people will always cancel. No matter what kind of subscription business you have, people will always cancel.

Speaker 2:

Maybe you've put a crazy amount of time into reducing your customer acquisition cost. You've tried so many different kinds of creative. You have tested so many different offers. You've tried different website designs, everything. Okay, you've got better at copywriting, you're sending crazy amounts of emails, but your customer acquisition cost is what it is. You've chipped it down, but it simply won't go any lower and you're stuck again.

Speaker 2:

What do you do? The answer is most likely increase your marketing budget Now. To increase your marketing budget now. To increase your marketing budget, you obviously have to have a few things in place. Okay, you, obviously you have to have a website that converts. You obviously have to be driving enough subscribers at your current marketing budget for it to make sense financially. So you have to have a business with good metrics. You know, when you acquire customers, they stay for a certain amount of time and they're profitable, and you have all that stuff dialed in.

Speaker 2:

If you have that all dialed in and you are stuck and you just really need to get bigger, the answer is probably increase your marketing budget. Now you may be saying to yourself look, all of this makes perfect sense, you're speaking the truth. I'd love to increase my marketing budget, but I simply can't because my business isn't producing enough free cash flow to increase my marketing budget. So what am I meant to do? It's a catch 22. I want to get bigger. I'm sick of being stuck at the same place. But to get bigger, I need to increase my marketing budget, but the company isn't producing enough free cash flow to increase my marketing budget. Well, that's a completely separate conversation and we could talk about that all day. We could talk about selling other products to increase the revenue in your business so you can reinvest into marketing. We could talk about prepaid subscriptions and pushing people onto those on the back end to release more free cash flow that could be reinvested into marketing. We could talk about a lot of different things around that, but most likely, you will need to find capital.

Speaker 2:

Businesses need capital to grow. You can do a lot of things with very little. Trust me. We've done it in BusterBox. We've done a lot. We've gone very far without a lot of capital, especially at the start. I know so many other subscription box owners have done the same. When you're really focused, you can be resourceful and you really can push forward without much capital. The proof is all the amazing subscription box owners out there that have been really creative and have pushed on and have created amazing businesses with very little. But there may be a point you reach in your business where you do need some kind of capital to break through and reach the next level. It's perfectly normal for all businesses to reach this stage.

Speaker 2:

It can happen to any kind of business if you're at that stage now capital may be something that you need to think about and that could involve going to the bank and getting a loan. It could involve raising money through investors. It could involve crowdfunding. It could involve working with one of those companies that give you a short term loan and you pay it back through your revenue. Whatever.

Speaker 2:

There's many different ways. You can raise capital which can help you push your business to the next level by increasing your marketing budget, but you obviously have to do what works for you and, obviously, if you've reached the level and you're happy at the level that you're at and you're making good money and your business serves you and you're not interested in pushing things forward and continuing to grow, well, that's great. If you have a great lifestyle from your business and you don't want to push forward, that that's brilliant. Honestly, that is amazing and you've built something that you should be really, really proud of and it's providing you a great life. But for those that have reached a level and they're really, really frustrated and they want to keep going and they want to keep pushing things forward, this podcast hopefully lays out why you're stuck. This podcast hopefully lays out why you're stuck and some solutions which can hopefully help you push things forward.

Speaker 2:

Thanks very much for tuning in. We'll be back next week at the exact same time and, as always, 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. Chat to you next week. Bye-bye.