Should we do a Subscription Box? We hear this question all the time. In fact, at Bulu we get asked so often that we had to start charging $10k to do an in-depth analysis for brands who want the answer. Yet, that doesn’t stop just about everyone for hitting me up for the quick “But for real Paul, what do you think, should I start one?” Which is awesome market validation!
Spoiler alert: I don’t know.
BUT, we can help you figure it out.
If you’ve wondered this before, or you’re currently considering Subscription e-commerce for your company, let me give you a head start by walking through the key considerations you need to make. First, a quick gut check: Subscription Boxes are fucking hard. The industry is young and crowded, they are logistically complex and there’s risk in innovation. The reward? They are one of the best (in my opinion THE best) ways to go direct-to-consumer while gaining valuable data, insights, and profit from your customers.
There are a lot of variables that go into starting a Subscription Box and the reality is I don’t know your business, but I do know what it takes to get a Sub Box up and running. That’s why I G.O.T. you (cheesy acronym, I know 😂). The big things you need to consider are your Goals, Objectives, and Tactics.
To provide a little context, I recently presented with Jake Bronstein, Head of Partner Innovation at Buzzfeed (and former reality show star!) at IRCE@RetailX. Bulu works with Buzzfeed to launch Sub Boxes like Lunarly, a nature-inspired self-care Box powered by moon cycles. Since it’s fresh in my mind, I’m going to use Lunarly as an example to show you how we walked through the goals, objectives, and tactics that gave the program roots (see what I did there?)
*Disclaimer - Launching a Subscription program is not this simple, but this guide is a good gut check before moving forward.
Goals. Before you launch a Subscription Box you need to consider your company goals, your team’s goals, and your personal goals. This might seem like no shit Sherlock, but you truly need to grasp how important it is to thoroughly understand what you are setting out to accomplish and in turn effectively communicate that with the people around you. I’ve heard some terrible answers, so if your goal is vague like sell more faster, to get a promotion, or avoid getting fired, you need to STOP. The last thing you want to do is start something that will negatively impact your life that you don’t really care about.
In developing Lunarly, our first goal was to “create an amazing customer experience for future potential Scott’s Miracle-Gro customers”, full stop. Notice that we are not trying to sell more subscriptions faster, but rather looking at the longterm benefit of gathering valuable customer insights to help Scotts interact with a new generation of customers.
Objectives. Identifying your objectives can be tricky. You have to articulate what key performance indicators are most important. Basically, what benchmarks do you need to hit in order for you and your boss to be satisfied? And are those metrics Simple, Measurable, Attainable, Realistic and Timely (S.M.A.R.T.)? Similar to goals, some bad answers I’ve heard include: make enough money to keep the lights on, do better than Karen’s project (sorry, Karen), and to wait until someone else tells you how you’re doing. Again, if your answers resemble any one of these, STOP. But, if you can define S.M.A.R.T. metrics that accomplish your goals, keep going.
For Lunarly, we defined objectives by determining what success looks like for Bulu, Buzzfeed and Scotts Miracle-Gro, win-win-win. We boiled it down to accomplishing a 7+ net promoter score, hitting 15% or lower customer service tickets after each shipment, and a 10% or lower monthly churn rate. On top of that, we carefully weigh our customer acquisition cost against our lifetime value and payback ratio. TL;DR, for Lunarly, we determine success by highly satisfied customers who stay with the program for a long time. That’s how we get high-fives from our partners.
Tactics. To start, you need to figure out the specific and concrete “to-do” items. This is where most large brands get stuck. Subscription Boxes are logistically difficult to pull off and it requires someone who knows what they’re doing to step-in (literally why Bulu exists). Second, you have to determine who is accountable for what. With Subscription and innovation, there is a risk. You need to figure out who is going to fall on the sword if the program fails and who is getting high-fives if it succeeds. Third, you need a developed timeline and signed-off plan. We often find that companies will say they are ready to jump, but the budget is not currently available. Make sure your timeline is realistic and actionable. Last but not least, be prepared to revise your plan as you go. Looking into my crystal ball I can tell you that without a doubt the first 10 versions of your model will suck. It’s a normal part of the process because you will not have all the variables up front. The important thing is that you are willing to iterate your tactics as you go. Focus on the blueprints and tools, not the finished product.
For Lunarly, Buzzfeed created the concept, Scotts Miracle-Gro handled the planning and Bulu took on execution. Each play a role in tactically pulling off a Subscription Box, but ultimately, Bulu assumes the risk, because we got you.
So back to the original question - should you do a Subscription Box? You tell me your goals and we can help with the objectives and tactics. We’ve G.O.T. this together.