Amazon's Subscribe & Save program is a powerful tool for brands looking to secure consistent repeat sales, foster customer loyalty, and enhance brand awareness. Understanding its impact is critical for sellers deciding whether to enroll their products in this program.
In this article, we dive into the journey of a brand that embraced Subscribe & Save, highlighting the significant benefits it accrued along the way.
What Is Subscribe & Save?
Amazon's Subscribe & Save program is designed to simplify the shopping experience for customers who regularly purchase everyday essentials. This subscription service allows customers to schedule repeat deliveries of items such as groceries, household goods, and personal care products at intervals ranging from monthly to every six months.
Participants in the program benefit from lower prices, with discounts of up to 15% per order, and free shipping, adding significant value to the subscription.
The Subscribe & Save model is particularly advantageous for brands on Amazon as it helps lock in repeat sales and enhances customer retention. The program's convenience encourages ongoing customer engagement, as subscribers are less likely to shop around for alternatives once they've established their subscription preferences.
Additionally, by using Subscribe & Save, brands can forecast demand more accurately, manage inventory more efficiently, and plan their financials with greater certainty. This system not only ensures a steady revenue stream but also builds a loyal customer base that contributes to long-term business growth and stability.
What Are the Perks of Amazon’s Subscribe & Save?
One of the key perks of Amazon's Subscribe & Save lies in its ability to generate consistent sales from repeat customers with and without amazon prime.
By offering customers the option to subscribe to regular deliveries of their favorite products, brands can establish a reliable e-commerce revenue stream.
Furthermore, this subscription model encourages Amazon customer loyalty, as consumers enjoy the convenience of automated reordering while benefiting from cost savings.
Driving Conversions and Sales Growth
Amazon indicates that products offered at the 10% to 15% discount under Subscribe & Save can drive up to a 1.8X increase in conversion compared to the lower option discount tiers. This finding underscores the significance of pricing strategy in incentivizing subscription enrollment and driving sales growth.
What Are Some Key Amazon Terms for Subscribe & Save?
When working to make the most of Subscribe & Save, it’s important to understand a few key terms and functionalities. Here’s what to know.
Amazon Marketing Services (AMS)
AMS allows sellers to create targeted advertising campaigns to promote their products on Amazon. Sellers can use AMS to increase visibility and drive sales for their Subscribe and Save offerings.
By strategically targeting relevant keywords and customer segments, Amazon sellers can attract subscribers to their products and boost their Subscribe and Save enrollments.
Amazon Demand-Side Platform (DSP)
DSP enables sellers to reach customers both on and off Amazon by running display and video ads.
Sellers can use DSP to increase brand awareness, drive traffic to their Subscribe and Save product listings, and retarget customers who have shown interest but haven’t subscribed yet. DSP provides advanced targeting options and analytics, allowing sellers to optimize their campaigns for maximum subscription conversions.
Amazon Marketing Cloud (AMC)
AMC is Amazon’s data management platform that allows sellers to leverage customer insights and behavior data to inform their marketing strategies.
Sellers can use AMC to segment audiences, personalize messaging, and optimize their Subscribe and Save promotions based on customer preferences and buying patterns.
By harnessing the power of AMC, sellers can create more effective and compelling Subscribe and Save campaigns that resonate with their target audience, leading to higher subscription rates and customer retention. AMC will give you more insight into Subscribe & Save data rooting from both AMS and DSP efforts.
Case Study: Navigating Discount Optimization
Consider the journey of Love Wellness, which initially set its Subscribe & Save discount at 10%. However, to test different pricing strategies, the brand decreased the discount to 5% in June, only to revert to the original 10% level in December.
Analyzing the Results
Love Wellness experienced notable fluctuations in subscription enrollments and sales corresponding to changes in the discount level. Initially, the 10% discount spurred a surge in enrollments, driving robust sales growth and fostering customer loyalty.
However, the reduction to a 5% discount led to a temporary decline in subscriptions and sales, underscoring the importance of competitive pricing in enticing customers to subscribe. Bumping the discount back to 10% resulted in immediate Subscription Count growth & surpassing the best month on record since enrolling in the S&S program.
By running a 20% off first-time subscriptions coupon on eligible products, this brand was able to see its most significant month-over-month increase in subscribers in the history of the account (December month-end subscription count vs January month-end subscription count).
Don’t Forget About That Flywheel
Tunnel vision on Amazon is never a good thing; you’ll want to ensure your ads, whether AMS or DSP, are locked into these subscription strategies to maximize our targeting opportunities.
After moving to 20% off the first Subscribe & Save subscription order in January, AMS Advertising Conversion Rate increased by nearly 15% over the previous 2 weeks.
DSP drove over 7,500 new subscriptions over 6 months for $45 per subscription. As we continued to tweak and adjust targeting strategies, we were able to drive the cost down for new subscribers to $32.
What Are Some Key Takeaways for Amazon Sellers?
All of this said, let’s take a look at the most important takeaways for Amazon sellers:
Strategic Discounting
Setting an appropriate discount level is crucial for maximizing Subscribe & Save enrollments and driving sales. A discount of 10% has been shown to yield optimal results, balancing customer incentives with revenue generation.
Consistency Is Key
Fluctuating discount levels can disrupt customer trust and undermine subscription uptake. Maintaining a consistent discount strategy fosters predictability and encourages long-term customer engagement.
Monitor and Adapt
Regularly monitor Subscribe & Save performance metrics and be prepared to adjust discount levels based on market dynamics and consumer behavior.
Amazon enrolls products at a 0% discount & it is up to the seller to take the initiative here and increase the discount accordingly. Data-driven decision-making is instrumental in optimizing subscription revenue.
Drive Additional Subscription Growth
Offering enticing promotions, such as an additional % off coupon on first-time subscriptions, can substantially boost subscriber acquisition rates. After implementing this strategy, the case study brand experienced its most significant month-over-month increase in subscribers.
Utilizing targeted promotions not only attracts new customers but also encourages them to commit to recurring purchases through the Subscribe & Save program, amplifying overall subscription numbers and fostering sustained revenue growth.
Feed Subscription Momentum Leveraging Amazon Ads and AMC
By integrating these platforms into their Subscribe and Save strategies, sellers can effectively promote their products, drive subscription enrollments, and maximize customer lifetime value on Amazon.
Embracing Amazon's Subscribe & Save program presents a compelling opportunity for brands to cultivate repeat sales, enhance customer loyalty, and elevate brand visibility on the platform.
By strategically leveraging discounts and maintaining consistency, sellers can unlock the full potential of this subscription model, driving sustainable growth and fostering lasting relationships with their customer base.
Do More Than Just Subscribe & Save
When trying to bring in customers to your business, embracing an omnichannel marketing strategy offers a transformative potential for brands aiming to enhance their visibility and engagement with customers across multiple platforms.
An effective omnichannel approach ensures that every customer touchpoint across email, SMS, social media, and online marketplaces like Amazon is interconnected, providing a seamless, consistent brand experience.
By integrating various channels, businesses can collect and leverage data from each interaction to personalize and refine the customer journey, improving customer satisfaction and retention rates.
An omnichannel strategy allows brands to reach customers where they are most active, increasing the likelihood of conversion through targeted communications tailored to each platform’s unique audience and capabilities.
For instance, while social media can be used to raise brand awareness and engage users in a more casual, visually driven manner, email marketing can offer more personalized, content-rich communications aimed at driving direct sales.
Together, these synchronized channels create a comprehensive system that not only attracts new customers but also fosters loyalty among existing ones by meeting their preferences and expectations at every turn.
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With GR0, we make the omnichannel approach at digital marketing easy. Expand your revenue outside of being just an Amazon business by tapping into other marketing channels.
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Sources:
Create a Subscribe & Save Coupon
Thinking Inside The Subscription Box: New Research On E-Commerce Consumers | McKinsey & Company
Subscribe and Save: The Gateway to Customer Loyalty and Increased Margins | Quartile
