Creating Sticky Customers

Repeat customers are the lifeblood of your business, but customers can be fickle. Here’s how to
make them sticky.

In a traditional business, the customer buys your product or service once, and it is up to you to try to
convince them to buy again in the future. However, in a subscription business, you have what is
called an “automatic customer” who agrees to purchase from you in the future, as long as you keep
providing your service or product.

Feeding Rover Automatically

One of the reasons subscribers are such attractive customers is that, once they subscribe, they
become less price-sensitive. To illustrate, imagine you live in England and own a 100-pound
Pyrenean Mountain Dog that eats two hearty bowls of dog food a day. Feeding the love of your life is
an expensive proposition, so you’re always on the lookout for a deal on dog food. Once every two
weeks, you trudge down to the local pet supply store and cart a case of kibble home. In the
meantime, if you see dog food on sale at your local grocery store, you’ll buy it. If you get a coupon
for a buy-one-get-one-free offer from another store, you’ll take advantage of it.

Eventually, you get tired of last-minute trips to the store, so you subscribe to Warwickshire, UKbased
petshop.co.uk, which offers a “Bottomless Bowl” subscription service. Now you know you’re
going to get a shipment of dog food every fortnight, and the part of your brain that scans the flyers
for dog food starts to shut down, knowing that the convenience of having dog food shipped
automatically far outweighs saving a few dollars on kibble.

Integration Drives Stickiness

Beyond the simple convenience of automatic service, subscribers become even more loyal when
they start to integrate their subscriptions into their daily lives. Subscribers knowingly enter into an
agreement in which the convenience of uninterrupted, automatic service is exchanged for their
future loyalty. Rather than buying once without returning, subscribers stick around—hopefully for
years, which is why subscribers drive up the value of your company so dramatically.

By |2018-11-15T11:22:40+00:00December 13th, 2018|Growth Potential, Recurring Revenue|