How Subscription Models Improve Retention

With the popularity of subscription services on the rise, it’s no surprise that eCommerce businesses are looking into this innovative and convenient model. But just how much can subscriptions improve customer retention? In this blog post, we’ll delve deeper into the benefits of subscription models and explore how these strategies can bolster user engagement, drive business success, and increase overall customer satisfaction. Bid farewell to your old approaches to customer retention — there’s a new modern solution in town!

What is a Subscription Business Model, and How Does it Work?

Subscription business models have taken over the economy. Instead of paying a hefty one-time fee upfront, subscription business models have conditioned customers to buy in and pay multiple payments spread throughout the year. This means subscription businesses can focus on customer retention rather than acquisition, leading to longer lifetime values (LTVs) per customer. Rather than ownership of physical goods or services, subscribing has flipped the script and ushered in a new wave of subscription-oriented lifestyle choices.

Types of Subscription Models

The Curation Model

The curation model is one of the most popular subscription services, with boxes tailored to every person’s personal needs and preferences. From beauty sets to cheese boards – whatever your vice is, there’s a subscription box for it. The curated approach is what sets this model apart from the other types of subscriptions available; it offers customers an ever-changing and exciting selection of products that are all unique to their tastes!


The Birchbox subscription service sends monthly subscription boxes containing two to six beauty products from more than 200 brands. Personalized boxes are sent based on a quiz, and the same product is never sent twice. Customers can purchase the full-size product directly from the website, improving retention and LTV. 

The Replenishment Model

Replenishment subscription models often referred to as “subscribe and save,” are an increasingly popular option for busy people who wish never to run out of toilet paper or coffee pods again. This type of eCommerce establishes a recurring revenue model and ensures customers receive their purchases at predetermined intervals, allowing retailers to confidently and accurately predict inventory needs. If you sell everyday consumables, embracing this subscription strategy could give you a competitive edge.


Subscribers to Dollar Shave Club receive blades and shaving products regularly based on their needs. After completing the initial quiz, the customer can customize the suggested box to include the products they want. Customizing these specific features is the key difference from a curation model. 

The Access Model

Access-focused subscriptions offer familiar customers exclusive discounts, early access, and more. Access models are all the rage in fashion and food verticals but can also be found among digital subscription brands. A subscription model allows you to benefit financially and insight into future forecasting, but it’s also a great way to show your valued customers some love. When customers feel special, their loyalty toward your brand is likely to increase.


Clearly, streaming media subscriptions, such as Netflix, are here to stay. Just having the ability to access unlimited shows and movies whenever you want is a fantastic perk and a great example of the access model in action! This model allows viewers to enjoy extra features like no commercials or early access to their favorite shows by signing up for more exclusive paid services. 

Benefits of Subscription Models in Business

  1. Subscription models are convenient for customers.
  2. Customers can discover new products.
  3. Businesses can accurately predict revenue.
  4. Subscriptions can attract more customers.
  5. Subscriptions decrease customer acquisition costs.
  6. Businesses build stronger relationships with their customers.

Subscription Retention Strategies

Tracking what content subscribers engage with is a great way to determine what people are interested in and whether you’re hitting the mark with your content. By observing which stories they’re clicking on and products they’re talking about, you can determine which topics will be the most successful. On top of that, you can better tailor the content that runs in the future to suit their tastes. Getting this right is essential if you want to keep your subscribers engaged and coming back for more!

Welcome new subscribers and make sure they’re aware of their subscription’s benefits! An effective onboarding process will ensure that your subscribers are connected to your brand and understand the value of their subscription. When it’s time for them to decide whether to renew, you can be sure that they are already invested in the product and that their decision is easy. Subscribers will appreciate a great welcome, and you’ll be on your way to building a long-term relationship with them.

Encourage existing subscribers to renew by optimizing customer service and actively engaging with your current subscriber base. Doing this will build personal relationships with them and lay the foundation for a long-term relationship. At the end of their subscription, you’ll be able to have meaningful conversations that remind your subscribers of the great value they’ve already experienced from your service, which makes it much easier for them to hit “renew” when the time comes.

Reduce subscriber churn by knowing which of your subscribers are most likely to cancel. You can get ahead of potential cancellations by using data-driven insights to identify these high-risk customers and understand why their intentions may differ from other subscribers. From there, you can build targeted strategies to re-engage them and ensure they stay part of your subscriber base!

Measure and test any initial promotions or offerings. Try creating different discounts with different lengths of offers—this can help identify which works best at drawing in and retaining subscribers. Keep in mind that discounted subscriptions should also include your most engaging content if you want those readers to stick around. So don’t be afraid to experiment with various promotional offers; this is an excellent way to find out what attracts—and keeps—subscribers on board!

Offering exclusive subscriber-only benefits is a great way to increase loyalty and show your customers that you appreciate them. These benefits could range from tailored content, discounts on products or services, early access to new developments—or all of the above! However you choose to structure these offers, they will surely inform your subscribers that you prioritize their business and are committed to providing them with high-quality content and services.

Why Subscription Models are Becoming More Popular

Subscription models have become increasingly popular due to the range of benefits on offer. Price is a significant factor driving customers to subscriptions as companies offer discounts for bulk orders, keeping prices lower than store-bought equivalents. Plus, these companies tend to deliver directly to your door – making them an easy and convenient option too. 

On top of that, most subscription services personalize their offerings with tailored deliveries, which add an extra touch and make the customer feel special. All this has ensured that subscriptions are rising in popularity, with reports showing 100% year-over-year growth for the last five years – so hop on board and join the subscription revolution!

Advantages of a Subscription Model to Improve Retention

Subscription models are a revolutionary way of tackling customer retention. With subscriptions, you can strategize the best approaches for creating relationships between you and your customers that extend beyond profit. 

Companies can benefit from increased customer engagement and recurring revenue to support their business. When done strategically, big brands can also use their existing assets to launch new initiatives and acquire more subscribers. 

Subscriptions also offer customers convenience, security, and reliability of products and services they need regularly. All in all, subscription-based revenue models can be advantageous for both the customers and the companies.  

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Maggie M. Barnett, Esq. COO of ShipHero – Author

About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial, and administrative procedures, reporting structures, and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management, and a passion for business transformation. She is known for her expertise in delivering operational excellence and ability to provide guidance and mitigate risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.

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