Ep. #970 - Improving Your Subscription Programs
Today’s episode of Startup Hustle contains a special ticket to take your subscription programs to the next level! Andrew Morgans shares the mic with Matthew Holman, head of growth at QPilot. Time to enjoy a practical crash-course episode to get more from your subscription programs.
Covered In This Episode
How can you build a better relationship with your customers through subscription programs? What is the future of subscription strategies? Are there different kinds of options you can try to drive more sales?
All these and more are open for discussion in Andrew and Matthew’s session. You can follow their valuable tips whether you’re still testing the waters or finding new directions for subscription programs.
So what are you waiting for? Check out this Startup Hustle episode now!
- The Matthew Holman story (01:58)
- The fascinating thing about e-commerce (03:54)
- Creating a brand messaging that evokes emotion (06:24)
- Branding and storytelling content (08:49)
- What’s QPilot up to now? (10:11)
- What is a “sharehouse community”? (12:58)
- Subscribe-and-save programs and customer retention (15:20)
- Getting flexibility out of a subscription (17:30)
- How to give more value to your subscribers (20:51)
- Starting a subscription-based business (23:55)
- Key components of a great subscription program (25:07)
- The right way to collect subscriber data and feedback (27:06)
- Tracking conversion percentages and clicks (30:34)
- Leveraging keywords for better conversions (31:08)
- The biggest reason why people churn (32:09)
- Example of improving subscription services based on customer churn and data (33:34)
- The future of subscriptions (37:03)
- Testing subscription boxes (38:14)
- How to get in touch with QPilot (40:03)
If we discover a new buying pattern or buying behavior, there are going to be 30 startups and a thousand businesses that start incorporating that. Start testing it and figuring it out. That’s what I love.– Matthew Holman
As our lives get busier and busier, these are little, small things we can do to give us some of our time back. So that’s really what we’re selling, in my opinion.– Andrew Morgans
Our real value gets unlocked as you start to grow to a scale where it becomes difficult to manage price updates and product updates. You’re having difficulty with customer experiences around what people can change. That type of thing is where we really start to differentiate ourselves from competitors because of how our product is built.– Matthew Holman
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 00:00
Hey, what’s up, Hustlers? Welcome back! This is Andrew Morgans, founder of Marknology, here today as a host of Startup Hustle, covering all things e-commerce and Amazon startups. Today, we’re covering subscription programs that have happened to do with DTC. We’re gonna be covering it all. I’m super excited to bring today’s guest. But before we do, today’s episode of Startup Hustle is sponsored by Double. A flexible assistant service for busy executives that matches you with an experienced assistant. And you only pay for the hours you need. Double handles all of the upfront, time-consuming items such as interviewing, matching, onboarding, invoicing, and training. Go to withdouble.com today and get 50% off your first month when you sign-up with the code HUSTLE22. That is withdouble.com. Use code HUSTLE22, and unlock 50% off your first month. Now, for today’s guest, Matthew Holman, welcome to the show. Good to hear from you. Calling out of Salt Lake City. Yeah, how’s the weather there right now?
Matthew Holman 01:00
Thanks, Andrew. Great to be here, man. It’s nice and sunny. Just a little bit cool. Getting a little colder, but it’s really nice.
Andrew Morgans 01:04
I love it. Everyone that calls me from Salt Lake City is at a coffee shop with a view of the mountains in the background. And I’m just like, what is your guy’s life? This looks amazing.
Matthew Holman 01:14
It’s pretty phenomenal, man. The mountains are right there. Like I know a lot of people in Colorado, the mountains are actually still a ways away. They’re literally like, they’re right there. Like I could be in the mountains in 15 minutes.
Andrew Morgans 01:25
I’m like, are you guys using a background? And they’re like, no, this is just, you know, there’s a lot of e-commerce and startups, a lot of like energy coming out of Salt Lake City totally, which I think is really cool. I like to think of Kansas City as a city that’s really exploding. And it has a lot of energy behind it. You know, they’re kind of calling us maybe the next Austin. Just a lot of startups out here. But I love being in those cities. Definitely, as someone that’s part of the startup community, it makes it a little bit more fun when everyone you talk to is going on. So I want to get to know, like, you know, we always start the show by getting to know a little bit about our guests for our listeners to kind of just put some context to who we’re talking with today. Talk to me about, you know, your journey and business. Your journey in entrepreneurship. Like, did it start out as a kid? Is it something, you know, you went to school, and you’re like, I’m gonna be a business owner?
Matthew Holman 02:14
You know, it’s, it’s funny. I mean, I’m sure you don’t get this. I won’t go into too much detail on different interviews on this, but I feel like it’s really applicable to, like, your audience, but ya know, when I was a kid, you know, I wanted to like, I like studied Comparative Literature, I was a book nerd, I did drama, stuff like that. But through a series of like, you know, poor choices on my part, and some bad shit that happened to me, actually was in prison, like, I’m formerly incarcerated. So I went in at 22 and got out in my 30s with having to, like, figure out how to, like, succeed in my life, right? Like I went in as a kid, got out, was in that whole time reading the Wall Street Journal and business magazines and my friends and talking about, you know, we were hustling and grinding in there as much as we can and got out here thinking, you know, what, what am I going to do with myself and for me, the idea of being like a, you know, an ex-con that’s like teaching some poetry class or whatever, it doesn’t really didn’t really jive anymore, it was more about I need to find a way to support myself and, and wanted to build something that lasts, you know, kind of disproves. So I got a little bit of a chip on my shoulder. I’m not necessarily negative or bad or anything, but I’m definitely motivated by wanting to build a show for people that make those mistakes. I’m not defined by that. That’s not who I am. I’m all about trying to build and create a community and supporting people and stuff. So I went back to school after I got out. And for me, I picked a tech degree because I thought it’d be easier to get a job in tech, but I’ve always loved e-commerce. It’s, you know, while I was incarcerated, I learned, like, print and sign and design stuff, right? So for me, I’ve always been a big person around messaging. And there’s a science to that. And for me, I love e-commerce because it’s just so so funny. You’re talking about the name of Marknology. It’s like for me, e-commerce is the intersection of technology and buyer behavior and psychology. And those two fields are so fascinating. And they’re so quickly innovating and evolving all the time, right. Like if we discover a new buying pattern or buying behavior, there are going to be 30 startups and 1000 businesses that start incorporating that and start testing and figuring it out. So that’s what I love. So I went from, you know, school to working on some of my own side businesses. I got a job at a small company doing marketing. And from there just kind of kept just grabbing the next opportunity. And I had the opportunity to join cute pilot as a co-founder to run marketing and growth there. And it’s just been an amazing ride. I’ve been there for two years. And for me, I get to love working directly with brands and subscription programs, I get all the data from hundreds of customers about what’s working and what’s not, and I get to go turn that into content and educate people and help our brands grow and stuff. So anyway, that’s a mouthful.
Andrew Morgans 05:00
That’s an amazing story. And I love a comeback story. Like, I mean, there’s nothing better because it’s one thing to just come out winning and hitting home runs and just stay winning. It’s another thing to get knocked on your butt and then pick yourself back up. And right now, I definitely can speak to that. Myself and that chip on the shoulder thing, you know, for me. What I love about e-commerce is like, um, nobody from nowhere, like, you know, from the bottom, and I would assume it is similar to like, you know, coming out of the system and having to figure out where do I exist in this world, I grew up in Africa, so I moved here 16, and then like, then being kind of somewhat poor, and, you know, you just have to kind of figure your way. And I tried a bunch of things; e-commerce was the one that was, like, the great equalizer. I really think that, like, it’s like, if you’re good at it, if you’re in, you know, I was street smart. And, you know, I survived in Congo, like, you know, as a kid, like I was very street smart just from observing. And so being able to take kind of some of those skills that you naturally get, right, you know, and then be able to apply those to business instead of them just being wasted, like, how to think how do they move, you know, and then also being like, I would say, cultured in the sense of, like, just having traveled the world, you know, at a young age, and seeing all the different cultures makes me think differently about selling so like, you know, it’s not just how I think it’s how, you know, everyone has their own way of thinking and living in Okay, so like, let’s mark it to them with right messaging, right? A huge proponent of that, we were talking about emotionally connecting with content, like before we went live, and that’s a big passion for me. It comes back to messaging, right? However you’re wording it, it’s like how do you create emotion, evoke emotion, get people to go e-commerce, that customer buying behavior patterns, you’re talking about, like, just super exciting to me, I can nerd Oh, and nerd out about it all day.
Matthew Holman 06:56
It’s so fascinating. I mean, for me, like, I think one of the things that have been a good skill for me is I, I didn’t know what I didn’t know, when I got out, I was trying to figure it out. So a lot of what I was learning was just learning what I liked and what I didn’t like and trying to, like, put myself in the seat of the consumer. And then for me, too, it’s been an interesting journey from a hustle standpoint of, you know, trying to learn so many different parts of marketing, whether it’s Facebook ads or crafting landing pages and emails, and you do all these things. And while I can do a lot of those things, I’ve also been discovering what I’m really, really good at, and then trying to pivot, right like, so I did an event today here in Salt Lake where I was able to interview like the head of content, social media manager for the Utah Jazz. And we had a room of 60 people that all just wanted to come out and learn from that. And so doing events and connecting with the community and building that up is something that I’ve discovered that I’m, I’m good at, can be passionate about. And it helps the business, it helps the brand and all those things too. So it’s just kind of like a fun part of that journey. You figure out what you can do and double down and just keep continuing to get better. And then also try to innovate, right?
Andrew Morgans 08:00
Yeah, like, and we can avoid this subject if you want, you know, but you know, we were talking about the kind of, like, you’d be in Salt Lake and having religious backgrounds getting to know each other a little bit before the show. And for me, something I realized in my 30s Is that, like, I grew up, I’m a fourth generation preacher’s kid, missionary kid, you know, and while I’m not religious now, you know, I’m still spiritual. But what I realized is that, like, I was raised by community builders, you know, like that community building part of the church of the religion is, like, kind of ingrained in me in some ways. And being able to think about it, like from a group of people, that’s a natural skill, right? You know, it’s a natural skill that kind of just like you don’t have if you’re not from that type of upbringing, that I’m like, this is a benefit, as well as the storytelling part, at least, like in the, you know, in the churches, I grew up with very charismatic speakers like storytelling, you know, you’ve got these kids just on the edge of their seat listening to like, some honestly, like ex-convict, like telling his story of like, overcoming, you know, covered in tattoos and just like, oh, man, they would just have me hooked. I was just like, oh, this is amazing. Because I honestly believed in the book at the time, and, you know, the Bible is just full of stories. So it was just like an extension of that kind of thing. You know, in that now I’m in branding, and I’m in storytelling content, you know, we’re full-service Amazon management and technology, but I’ve worked with over 300 brands, me and the team and, you know, some build a brand and becomes iconic and they’ve built one brand that’s iconic, it’s massive, you know, or maybe a few. I love the agency side of what we do. Because I just get to work with so many brands, so many founders with so many stories, so many stories alive, what’s working, what’s not, you know, I’m honestly learning like, tick tock, tick tock content right now, personally, not making it myself but more so how to leverage this for brands right. And just, I mean, I Minute, and I’m learning, and I’m studying, and I’m hanging out with a couple 23-year-olds, a 19-year-old, like, really just trying to, like, get in their heads and like, see, you know, because what they’re doing is successful. Right, right. And so I’m like, trying to think like that. And I just absolutely love the problem-solving part of it. So I want to go back to your story. Okay, so I went down a rabbit hole. So we, you, you know, you started working with this company, the new pilot? And what are you guys working on? Now? Let’s talk about that. Like, you know, you also have a community. I think you talked about having a community event with Utah Jazz, which is funny because I had a YouTuber in 2019, before the pandemic, that was following me around, kind of like Gary Vee style, okay. And he, I had made him sign this deal. And I don’t think he’ll mind telling us this because he looks good. But we had made this agreement that he couldn’t leave me for a year because I said, once we started making this content, and I started pushing it, like, it’s Amazon, you’re a good video videographer like the stuff is gonna pop, I’m telling you. And I was just too busy to sit there and make YouTube videos. I was like, I’m running to call it a random brand, just like recording what I’m doing. Let’s turn it into the content. And a little early. It’s picking up speed now. But he actually went to this college I spoke to. He went to this basketball camp up here in Kansas City. The basketball camp invited him down to LA to film a basketball camp. He meets Kobe, he meets some of these other players, and whatnot. Like they’re shooting kind of the camp because that’s who had hired him to do it. Well, he comes back, he’s like, can do the camp again. And he’s been filling in as a videographer for me. And the team, I think it was, it might have been Cleveland, the first one. But there was him and a couple others. They became the first content creators for the NBA. Him and a couple of those guys. So like, literally scooped up, and I said I can’t hold him back. Okay, I’ll make it. Whatever, you know, it’s cool. You met the head of marketing today, right of the jazz I did. And to know, like, I just knew a little bit of the insider, like what they were doing is essentially the team started like paying for a videographer to create content for the players, like you know, the walkouts, and like just making them have clips for their social media and all that kind of stuff to brand them. And that’s what he was kind of doing. And it’s been really cool to watch his journey over the last couple of years.
Matthew Holman 12:29
Yeah, it’s really fascinating to learn more about their strategy. They’ve got a big team, they do like PR and their social media strategies kind of run in parallel. And you know, they’re trying to drive awareness like they’ve got this lot of international following. Now apparently, they’ve got some people in the Philippines and other places that are now basketball fans and jazz fans, because they like a lot of what they’re doing. So it was, it was kind of fascinating to learn how a bigger organization kind of looks at that and makes decisions. So yeah, like that’s, that’s an aspect of the sharehouse community and e-commerce community, we’re kind of doing it out here.
Andrew Morgans 13:00
Tell me a little bit about the sharehouse community, like, give me the elevator pitch of like, you know, what your community is about?
Matthew Holman 13:06
Yeah, basically, we, you know, we have a really active Slack channel and do events. But we’re really all about just kind of connecting the community empowering people with more knowledge. So regardless of what kind of what you’re doing, the best place to learn, I think, is other people in space. So other brands, learning from other brands, you know, we try to pay attention to our service providers and make sure that we have really good people and good experts in the space. So that, and a lot of times we have a Slack channel where somebody wants a question like, hey, what’s a good three PL in this area? And they get recommendations like, Who do you use for this? And what software should we be doing for that? And you know, so we get questions like that all the time. And that’s really just kind of all about what, there’s tons of community around, there’s tons of people that are doing that. But within Utah, there’s just so much happening within the CPG and DDC space. And there’s just no group here that’s really trying to help empower the community in that way. So we’re trying to do that. And it’s good for me, it’s good to pilot for the, you know, the business that I’m doing as well, because we’re trying to help e-commerce companies figure out subscriptions.
Andrew Morgans 14:03
So yeah, for me, it’s like, you know, I have obsessed about Amazon for 11 years. And, you know, I love it, I still am building it, I’m building Amazon brands, you know, this is what we do. But I still get a lot of joy, a lot of fulfillment, you know, from continuing to learn in areas of e-commerce outside of my life, you know, my bucket and the agency that we built. So that holistic e-commerce thing the podcast for me, these conversations right here getting to learn more, you know, about a great subscription service that we’re gonna get into and or how to optimize those is like, you know, it’s continual learning, which for me is like a must. So the community really brings that. So that’s super cool. And where can people find out more information about that community?
Matthew Holman 14:45
Yeah, if you go to share house.com There’s a button to join and they ask you some questions because we’d like to know who’s in the community and kind of what they’re up to, to get in and then you get emailed the slack link. And yeah, we’ve got people from all over. We do some in person events here in Utah. But we’re figuring out how to do more and kind of scale up so we can offer more value to people.
Andrew Morgans 15:04
I love it. Okay, you guys heard it. Okay, so talking about, you know, today’s today’s topic is like how to get more out of your subscription, you know, subscription services, like on Amazon, you know, I have some brands where our strategy is to push and reinforce, you know, retention with our customers to the Subscribe and Save program, kind of the built-in subscription service. But, you know, with some of my DTC brands, like some of our bigger ones, I guess, wholesale customers would be like, some of some of the boxes and these subscription boxes and things like that. So I have some, you know, knowledge about that, but talk to me more about coupons, you know, tell me more about what it does as a service as a SAS?
Matthew Holman 15:46
Sure, yeah, well, let’s, let’s just think about it like context, like from a story standpoint, like if you’re, if you’re selling on Amazon, and you’re doing subscribe, and save, like, you definitely want to do that from a retention standpoint, you get, you know, more revenue, there’s a great, great way to just add some predictability to your business and create a little more engagement, your customers, but there’s really not a lot you can do it. Like you just choose what discount you set. And depending on what people pick, they you know, Amazon opts in for an extra like 5%. Right. So it’s, it’s fairly limited in your ability to control that. And I think when you mentioned subscription boxes, we’ve seen this really strong rise, you know, like Birchbox, or, you know, you know, butcher box, like, there’s so many different cosmetic boxes. Basically, like, a lot of those started, because there’s this around this experience, you’re like trying to wow or impress somebody, right? Like this opening experience. People subscribe to that. Yeah, yeah. But also, it’s a lot easier from an operational standpoint to run a business that way, because you don’t have to worry about weighing out the boxes, you don’t have to worry about charging people for shipping, like it’s all kind of included, it’s like an experience. But what we’re seeing is a trend, more and more brands that say I sell pet food on my Shopify site. And now I want to offer a Subscribe and Save option. So more and more brands are kind of rolling out this option between one time versus subscription. But what’s interesting is because there’s so many subscriptions everywhere, right? Whether it’s like you’re talking about your Amazon Prime, or Netflix, or whatever it is, people are a little bit leery of subscriptions, because a lot of people like you know, I don’t want to get a candle subscription. And I’ve got 20 candles in my room, but I never use them right. Yeah. So what cute pilot does is cute pilot is right coming at it from a kind of an operational standpoint, which means we’re trying to make it really, really easy for a brand to let their customer have total control over the subscription. So meaning when do you want to get it, how often you want to get what you’re getting, changing products, all these things so that a brand can tell their customer. This is the easiest subscription you’re ever going to be on. Right like I have $1 Shave, shave club, Dollar Shave Club subscription, bald, I shaved my head a lot. I’ve been on there for years years because anytime I you know say I’m growing my hair out or something, I can two clicks and I pause my subscription or two clicks I push my razors out because I’ve got too many right and what that the reason that’s working is because I don’t ever cancel because why would I cancel I could just make it whatever I want to deposit. Yeah, I’m gonna stick around and, and Dollar Shave Club, I’m probably not their ideal customer because I basically never buy their upsells right. I’m just kind of like, I liked the razor. That’s it, I’m good. But there are tons of other people that they’re getting more and more value out of because they stick them around longer. A cute pilot story is all about flexibility. Customers get what they want from this subscription.
Andrew Morgans 18:45
They stick around longer, higher, LTV, more profit for your business, it feels trustworthy to get options, you know, feels trustworthy to get options, versus like you’re shoving this down my throat. Right? And you know, there’s some of the things you sign up for. Like I’ll put them on blast, LogMeIn. Okay, so LogMeIn is a service I don’t use for my meetings anymore. I literally can’t get out of like, you know, it was oddest that auto-renew. And they locked me in, they’ve made me pay several $100 a month for like, the last 18 months until you know, my thing is done. I can’t get out of it. It wasn’t like I could go down to a lower subscription. It wasn’t like, Okay, can I pivot this into something else? Because they have a bunch of companies, right? I think like, you know, they own a bunch of different companies. And I’m like, Okay, there’s just no options there. And now I probably will never use that company again. Once I get out, right?
Matthew Holman 19:36
It’s not your customer, you know, it really really isn’t like it. I mean, to me, I always use the metaphor I always use as a gym membership, right? Like, I don’t know if you’ve ever had a gym membership, right? We listened to the gym membership, like try canceling your gym membership. Like, do you really want that to be your Subscribe and Save experience? Like for whatever reason, if you need to cancel that, like it’s really really hard. And if there’s another gym, if there is just one other option after somebody cancels that kind of a negative expense. variance, you better believe they’re going to the other option, like they’re gonna figure something else out because they don’t want to get stuck again, they don’t like it. People don’t like that. And so I talked to a lot of businesses and like, I think that I understand the approach to that it’s a revenue approach. It’s a protecting your revenue approach. But, but realistically, if you want to build something that can scale that people are going to be talking about with other people, like, you know, anybody who’s listening to this, who’s considering buying a LogMeIn subscription is going to probably balk at it from what you just said, Right? Which is, which is the whole point, they hopefully they’re comfortable with that if not, they need to redo their strategy, right. But that’s the idea is like, I want to be able to tell people, hey, you know, if you buy a bullfrog spa, you can actually get all your supplies on a subscription. And you can set the schedule to be whatever you want the replacement parts to be for your, for your hot tub. Yeah, it’s like, what you can get that it’s an easy boom. And you know, that’s the kind of thing that I tell people about, yeah, like, if you’re thinking about this, or this, like, oh, you should go with these guys, because it’s easier to buy packing supplies. And so that’s the thing we think about with subscriptions is like, what do people really want? Where’s the engagement? That’s a word I use all the time is like, how are you increasing, creating more engagement, you want to learn more from the people that are buying from you so that you can offer them more value? Whether that upsells other products, you name it?
Andrew Morgans 21:18
Yeah, I think when people are providing these services, and you know, content, specifically, they’re selfish, they’re thinking selfishly, you know, and content has to be created from a place of value. And service has to be created from a place of value. And, you know, I think of business a lot of times and in the context of relationship, like, it’s relationship building, that’s what branding is doing is building trust, it’s building reputation, the content you put out, you’re creating relationship on social media, all these different touches, and it’s like, you know, if you’ve ever loved you know, a guy or girl, and you know, you’ve you’ve aged a little bit to mature and learn, you know, that you cannot handcuff them to you know, it doesn’t work that way you cannot force them to be with you cannot force them to love You cannot force them to choose to be around you has to be their choice. And the same thing with customers. And so you know, what brands are forcing that move? You know, I think there is like decision paralysis if you’re giving them too many options, right? So that they can’t choose, there’s that like that art to it, or that science to it. But in general, it doesn’t make this painful for me. You know, like, I remember there was a big move with phone subscriptions. I think back in the day, when cell phones were first coming out. And you get locked into these contracts that were just like hell, and they’re still like kind of oil. But you know, we moved to these like, all of a sudden, there’s a big move and a big opening for where you could be month to month on a plan.
Matthew Holman 22:42
And it was easy to see that they’d lock you in. And then there started to be these campaigns where they would buy out your contract to try to win you over. And then now it’s kind of like a lot, it’s just a lot easier to just go month to month or whatever, like there’s not a big differentiator between that anymore. And that’s the beauty of competition, right?
Andrew Morgans 22:59
Okay, a few more bucks a month to be able to have my choice. That if you start treating me like crap, I can leave, that’s what I really want is like I’m paying a service provider. And if service starts going down, I want to be able to move. And you know, a lot of times you can’t do that when you’re in those contracts. So I love that, like talk to me about actually, before I go into my next question. Let’s get it, let’s shout out to our sponsor. As a reminder, today’s episode of Startup Hustle is brought to you by Double, the experts in pairing founders with remote executive assistants you can trust, it can be super hard to find the right Assistant. I’m so glad to have learned about Double. They’re built specifically for startup founders, Startup Hustle listeners, go to withdouble.com, use code HUSTLE22 and unlock 50% off your first month. Or you can just click on the link in the show notes too. I’ll have those in the notes. Okay, back to subscriptions. So talk to me about, you know, some of the like, let’s say a company has a subscription, and is looking to get better. Or let’s say a two part question, let’s say, you know, a startup is getting some traffic on their DC site. And they’re like, I’ve thought about a subscription. Where should I start? So one should know, what are some things people are doing to get better like to have maybe a basic one and then to like, if someone’s looking to get started from scratch? What’s a great way to do that?
Matthew Holman 24:14
Also, so I’ll answer the second part because it kind of plays into the first . If you’re thinking about it, a couple things I would be interested in doing is like talking to customers, right? So a lot of brands that launch or launching subscriptions are doing so because they’re getting requests from their customers. You have a core group of people that are ordering the product regularly, they liked the product regularly, they would like to just get it and not have to think about it or go reorder every time they’re out. So you want to see if you’re getting some customer-like requests. And if you’re not necessarily getting customer requests, you can always go and ask existing customers like would you be interested in a subscription-like would you want like you can look at your own purchase order history to see like what’s my repeat purchase? Do I have a lot of people that are buying every month or every six weeks or every quarter? Like looking at that maybe if there are some pad and some strong patterns there, you can think, Alright, well, we should be testing a Subscribe and Save program to see if we can capture some more revenue out of this. And so the reason I kind of leave with that is because you know, you’re coming at that from a mindset of like, you’re, you’re either listening to Andrew or you’re asking your customers and listening to the responses about what they want, what they’re doing. And so the great next step, from a scale standpoint, comes down to information gathering. So there’s like, there’s two parts to main, really key components to a great subscription program, that’s the acquisition side, when you first get somebody to subscribe. And then there’s a point where they’re ongoing, and then they decide to cancel. So those are two really big points. There’s a lot that happens in between, but for the purposes of like, thinking about what you should be and how you should be approaching it, I want more information around the acquisition standpoint. So whether that’s interviewing people by sending a phone call to the founder, if you’re reaching out directly to somebody, especially if you’re tracking somebody that’s subscribed, it’s never tried the product before. That’s really interesting, right? Because if somebody’s tried it a couple of times, it makes sense that they would want to subscribe. What’s motivating somebody who’s never tried your product before? And that is willing to subscribe, right? So you want to try to collect data from both. The second one can be really vital.
Andrew Morgans 26:13
And let’s be practical, real quick, just like, what does that look like? Collecting data is like, the order comes in, and you send them like an email that says, like, we’d love to know why you bought from us?
Matthew Holman 26:23
Yeah, it’s it, there’s a couple of ways to do it. And it’s not scalable, I don’t know if it’s great, like their survey technology, but it’s not like subscription, e-commerce survey technology specifically for subscriptions. So there’s not a tool, it’s a little bit of a grind, but it is literally like, that’s why I say from a founder standpoint, like, literally, if you’re collecting a phone number, like shoot them a text or send them a call like most buyers, if they know that you’re genuinely interested in them, they’ll feel a little flatter than the founder or the director of marketing or whatever is like I would love to pick your brain. And if you start doing that, and you’re getting a little bit of like, I don’t know, like you can add offers to that you can add, I’d love to give you a coupon on the next time you order, you know what I mean? I’d love to send you a free gift. But really, it’s like, tell me, tell me what you love about this, what you’re interested in why you bought it, what’s motivating you, you want to get all the psychology behind what’s helped the perfect purchase decision so that you can continue to improve that like as just as a quick example, if you’re selling, you know, pet food, and you know, the people are buying it, because they heard their friend said that it was fresh, but you don’t have fresh on your product page, right? Or you only have it once. Right? But you do these a couple of times and people say like, Yeah, I heard from a friend that these were really fresh. Well, now you’re gonna go back to my product page. And I’m gonna I’m actually going to add quotes from people that are citing how fresh the food is three Amadores Yeah, I’m going to drop in fresh, like 30 times on that page, right? Or I’m going to create an ad around that and drive traffic in that way, right. And so that’s the first part. And that’s a little bit harder to automate. Right? You can trigger automated emails, and you can include links from Survey Monkey, like there are ways you can scale that, but I would just suggest just starting with a personal email or a personal text or phone call, just to try to gather information. The other side is churn.
Andrew Morgans 28:14
Yeah, let me jump in there real quick. I was just gonna give a little tip from the b2b side. One thing I have done is like, you know, we might have 50 or so brands that we’re working with on a monthly basis here at Mark ology. I have a couple that whenever I’m rolling out anything new, I definitely like my go to customers my go to get like, you know, my VIP so to speak. I go to them, I ask them for their candid feedback, you know, they’ve been a fan a long time, would you guys think about this, and it’s not like a brand new customer. Where I’m getting there, you know, maybe more authentic, like, just like true transparent feedback. Because I didn’t know why they had them. It is usually a customer that I have some trust with. And I do feel like I’m getting their authentic feedback. But that’s like, you know, if I’m saying hey, I’m thinking about creating a new LinkedIn group just for my brands, or I’m thinking about you know, launching a three PL, or I’m thinking about adding you know, video services to my you know, what, it’d be something that’s useful to you, what do you think about this pitch deck? What do you think about the service? What do you think about, you know, the value and you know, they’re not just straight?
Matthew Holman 29:28
Yes, people so, you know, I feel like that’s a great way if you have if you can have a couple of customers like that, that you can go to you should and the other thing too would be then other communities like great brands that are fostering like a Facebook group or something else like people that kind of like like the brand like you could be doing something like that or even into a group that’s maybe not like your group but you know, say if you’re selling like, again, the pet food and you want to find some dog, Facebook groups on about with pets on, you can ask asked to ask to like it all. It all comes down to how you ask that thing, right? If people think you’re just talking, you’re gonna get shut down, but there are a lot of different Ways to start to try to reach out to get information, existing customer groups foster your own group. One of the beautiful things, like, you know, I hear from brands is when they create a group around a problem. And then after they’ve built the group up to like 100 people, then they’re like, Hey, I’ve got a product that I think will solve this problem, can I get everybody’s feedback from that. And now you’ve already got 100 people that are willing to give you really cold feedback, and also your first 100 potential, like customers. So yeah, that’s a great method to kind of, to take when you’re, but yeah, it’s got to be a little bit of a manual side, when you’re collecting information on that, on that kind of thing. You can also be tracking if, like from a just a straight data play, you need to be tracking like conversion percentages, like, what what buttons people are clicking on the product page, if they’re collecting, Subscribe and Save or not, you know, you want to be looking at that data as well, just to start, so you have a baseline in place for like testing things, right? Like if I’m gonna, again, with that assertion, if I know what my typical conversion rate is to Subscribe and Save. And now I’m going to go change an ad fresh in this quote, and I want to be able to see that I’m actually converting at a higher percentage, you know, you know, I mean, that’s something that should be part of the process.
Andrew Morgans 31:08
Now on Amazon, that’s very much like how the PPC works, you know, the PPC is there to drive traffic, but very much so it’s there for data. I mean, I think that’s the number one value that it has. And so when brands are outsourcing, when they have no idea which keywords are driving sales to specific items, how can they have any, you know, idea or direction on how to improve or where to go next? Or, you know, so if every keywords coming in under fresh, let’s say, I’m going to double down on my content around fresh, right, you know, so you’re trying a whole bunch of different things, you’re seeing what works, you know, on a website, you have Google Analytics, that’s telling you that came in from this blog, or this Pinterest posts or the social media posts are, you know, as well as your your tracking. And you can get a little bit more insights there on Amazon, I think a lot of those insights come from PPC, you know, you can follow up with customers to an extent, you can definitely see why they found you and why they bought. And that can be huge for improving you know, all those metrics we care so much about like click through rate and conversion rate things, right.
Matthew Holman 32:12
Yeah, so then the kind of the other half of the coin from acquisition is churn. And, you know, there’s, it’s, it’s not too hard, it’s harder with Amazon because you don’t get necessarily feedback. They might be rolling out a new feature with lexham cancellation surveys, but, but that’s definitely an absolute must for your DTC website, right, where you’re collecting some information around the cancellation. So the most common reason, just in general, why people churn is like they have too much product. But, and there are ways to address that. So the kind of story I’d like to tell about this, like how you kind of tie these two together, so churn is acquisitions, the reason why people buy churn is the reason why people cancel, and not everybody’s going to tell you why they cancel it. But there’s going to be and there’s always going to be a subset of people that like, you know, just hate the product, or they’re just sick of it, but there’s gonna be a plenty of people who still kind of like it, or they’re not sure, maybe they have too much. There’s, there’s a, there’s a huge variance in that kind of like lukewarm, you know, feeling towards your brand. But the idea is you then marry these two pieces together. So my example is a pet food company, which is why I brought that up. They’re called I heart dogs. And they do really well with one of their kinds of missions: they donate food to shelter, to feed shelter pets with every purchase you make. So they ran subscriptions with us for a while. And they didn’t really do much with it. They just kind of left it flat, but they were gathering information as they were working on other parts of their business. And when it came around to focus on subscriptions, like they’ve gotten some other things dialed in, and they wanted to try to scale that they were ready to scale. So their subscription program, they’ve got some really interesting feedback. And the feedback was that people were ending up with the wrong amount of pet food because they weren’t sure how much pet food they needed for their size doc. So it makes sense, right? Whether you have a little dog or a big dog, he might order too much or too little. And so people were running out and canceling and having to do a one time order or something like that, right. So what they what they did with all that information is they went back to their product page and they design you can go to it right now I heart dogs.com Go look at any of their products that product page, you’ll see a very simple thing where it asks the visitor to select the size of their dog, you know, small, medium, large with a weight size and depending on what you pick, it shows a different like a mouse and a frequency based on that. Right. And so what that did was twofold, though, it was really fascinating. As you know, I interviewed their CTO earlier this year about this because it’s just such an interesting idea. First, their conversions went up because they did a better job of explaining how much people should buy. And so that’s another critical piece usage is often like assumed that the person knows how much they should be buying even something as simple as like, you know, a 30 pill bottle and you take one a day, you need to order a bottle every month, even something that’s simple, you should be explaining that. So when conversions go up, because now people have a better understanding of how much they should buy, it’s really intuitive and how you select that. But the second thing is that their retention on the subscription program went up considerably. Because now the number one reason why people were leaving had been addressed. So now you weren’t getting people that still liked the brand and selected the product that we’re canceling, because they just had too much or they didn’t have enough. And so that’s the idea of marrying those two sets of data together. And so from a scale perspective, anybody who’s doing subscriptions and trying to figure out the next stage of growth, is what I would look at as gathering that information and starting to tie this together as a customer journey. What are people telling us? What are we learning from them, and what other additional value and engagement can we use to make this more sustainable and more valuable to them, because then people will stick around. And I do think that when we talked about before the flexibility component can come and play, people want that control, that’s always going to be an element.
Andrew Morgans 36:07
I love it. Because thinking about my dog, you know, he’s a big boy, he’s a 95 pounder. You know, he’s, he can get anxiety too. He’s a Doberman. So, you know, they’re very codependent. And he can go to different eating periods, like, just like when he’s hungry, like, if I’m gone a lot, you know, he’s got more anxiety or whatever he eats when I get home. But you know, as a dog owner, like, I hate switching up his food. So, you know, there’s some amazing dog brands online that I can’t get like, locally that I can’t pick up in retail. But if he’s hungry, I’m gonna go out and get some food, you know, so it becomes one of those things, it’s like, switching his food is hard on the stomach, and you know, all those kinds of things. And so, you know, you’re just like, I’m either ordering more so that I never run out, or I’m like, I’m gonna stick with a brand that’s local. So I can always just go to the store, if I need to grab it, which isn’t really ideal, knowing how a lot of these dog foods are made, you know, you get preferences.
Matthew Holman 37:05
You bring up an issue that’s like, to me, what’s like the future of subscriptions, and some brands are doing this now. But you’re gonna see it more and more is that, like your favorite online brand, whether it’s Amazon or not, it’s in your on a subscription, you could log in, and you could just hit like, order now, and you get one the next day, you know, or you get, you know, or even same day delivery for some brands, right? So you know that well, yeah, like, I normally get it every month, and I get enough for a month, but something happens my dogs, you know, over eating, or it’s just, you know, I need more food right now, boom, I can just hit a button and get that or I can move that schedule up and get it. And so I think like, that’s what the beauty of and the reason that’s happening is because people are trying to find more and more ways to make it so that you don’t shop somewhere else, right. And that should be the goal of the subscription, not to lock you in without choices. But to make the choice so easy. You never go anywhere else. Right? That should be the goal of the program.
Andrew Morgans 37:59
As our lives get busier and busier, these are little small things we can do to give us some of our time back. And so it fits in, that’s really what we’re selling. In my opinion. That’s really what we’re selling is like I’m making this so easy for you that you get your time back. And you don’t have to worry about this. And you can worry about playing cards or whatever you want to do you know, with your extra time. We’re getting close on time, I have one question specifically, I think we need to talk about, you know what, like cute pilots and specifically, like how big does a brand need to be? Is it an affordable service, like how big a brand needs to be to start testing with subscription boxes, things like that.
Matthew Holman 38:33
I don’t think you need to be that big. Like, in general, if you’re on Shopify, it’s really easy to test. There are lots of apps out there, like, you know, even some of the there are some even free ones that are not bad to just getting started. You just have to be careful about how you implement them on your theme. You know, so you always test on a staging site, right? So that it doesn’t affect your regular business. For us, we can work with smaller brands. And by smaller, I mean, like you’re doing like 50, maybe 50 subscriptions a month. For us, where there is real value gets unlocked as you start to grow to a scale where it becomes difficult to manage price updates and product updates, you’re having difficulty with the customer experience around what people can change. You know, that type of thing is where we really start to differentiate ourselves from the competitors because of how our product is built.
Andrew Morgans 39:23
So that’s good information. Yeah, so you know, getting there, you’re testing just to our listeners, like you’re starting to grow your subscriptions, and you’re like, I want more customization. I’m struggling to, like, you know, grow this thing. And you’re looking for options. You’re looking for that. That’s when they should find you.
Matthew Holman 39:39
Yeah, and I should add one thing. You know, I do. I’m a big content guy like we were talking about, and so for me, we run a content called subscription prescription. It’s a weekly newsletter, and we’ve got a YouTube channel. So regardless of your platform or who you’re using, it’s free to subscribe to that, and I’m regularly putting in weekly tips or ideas or strategies of how to approach to build and scale a really great subscription program too.
Andrew Morgans 40:03
Oh yeah, I’ll be signing up myself. No, this has been amazing, you know. As we run out of time, where can people find you? Personally? Where can people find out more about Q pilots? We’ll have the links in the show, but for everybody listening in the car, you know we’re working on getting in contact with you.
Matthew Holman 40:17
Sure. Yeah. So the website is quite pilot the letter Q and then pilot.com. And then to connect with me personally, I’m on LinkedIn, Matthew Holman Twitter as the subscription doc. You can look up subscription prescriptions on YouTube, as well as just Googling subscription prescriptions. You should be able to find our registration page or through LinkedIn or Twitter as well.
Andrew Morgans 40:38
Thank you so much. And once again, today’s episode, Startup Hustle, is sponsored by our friends over at Double. Double is remote executive assistants can help you with everything from email encounter organization to expense reporting and database management. Find your perfect assistant today. Click on the link in the show notes to get 50% off your first month using Double. Hustlers, thank you for tuning in. Matthew, thank you so much for your time. We’ll see you next time, guys.
Matthew Holman 41:01