As online businesses have increased in popularity and evolved, so have the ways of selling. Growing in popularity are subscription services - they're convenient, a great way to try out things, and who doesn't like getting a present in the mail? One Virgin StartUp-funded business using the subscription model in an exciting way is Me My Suit & Tie - a male fashion service that provides a monthly box containing a tie, a pocket square and accessories to pull it all together. We spoke to one of the founders, Paul Cachia, about how to run a subscription business.
How did you come up with the idea for your business?
Originally I came up with the idea of making elegant dressing affordable, whilst at the same time helping those who didn't have the time or just wanted the process to be easier. To be honest, it was born out of passion. I loved how a suit makes me feel and I think it's something which everyone should have access to, regardless of their income. Looking at everything from suits to the individual accessories, the whole team searched for the very best way to achieve this. This was where I learned my first real-world business lesson: no matter what you plan to do, you need to be flexible. Originally, the idea was to design suits following the standard retail model, but the more we looked into it and researched, the more the idea evolved. Eventually, we heard of the subscription model and how it was fast becoming a more efficient way to shop online.
Why pick subscription selling over more traditional methods?
We believe that the subscription model suits our goals better than the traditional model for a number of reasons. It eliminates the legwork involved with dressing well for work. Our customers only need to subscribe and then (depending on the subscription they take) we deliver a complete look to them as they sit back and get ready to look at their best. From a business point of view it makes it easier for us to forecast our short-term revenue, which enables us to innovate with better products. It is crucially important for us to be constantly developing better products for our customers so we can always offer them the best value for money. We can do this much easier when we know approximately how many units we will sell each month.
What’s been your marketing approach?
Marketing is complicated. These days there are so many options. There are no standard methods that can be applied - it really comes down to lots and lots of testing and learning from experience. We need to know who our customers are, where they will be, how they interact with our adverts, when is the most sensible time to approach, and how to give them value in return for them checking out our company.
The complication with subscription marketing is that it’s not just all about our unique selling point and the benefits of our products and service; there is also a certain amount level of education needed. The subscription market in the UK is still in its infancy and the consumer is still looking for new insights. This all makes the marketing process more complex. For us, content marketing has been a fantastic method of doing this. It adds an extra layer to the digital funnel but it certainly helps the customer understand the value of the product and the invaluable service that we offer.
The advice I would give any subscription start up, is to explain your product simply. If you can't explain it in one sentence then you need to rework it until you can. The beauty is that it’s very very easy to find out if you have it right. Social media advertising can be cheap (for just £5 you can put a quick advert on Facebook and see if gains any traction). But we should never underestimate the value of feedback and data; you'll be surprised at how much a customer wants to tell you, and this in turn helps a start-up to succeed.
I could talk for hours about this, but the truth is: keep it simple. Know your demographics, be creative, always give value, test all the time, analyse the feedback ... then repeat the task all over again until it is perfect. Just remember that different mediums respond differently.
How do you get people to commit to a subscription – trial boxes, incentives etc?
We have found that the best way to get customers to invest in a subscription is by offering great value - and to do this without tying them into a long-term contracts. If your business model allows it, let customers cancel whenever they want. If you’re confident your product is right for the market, then you should not have to worry about people canceling. If you are struggling to get your customers to take that last step, we have found that giving the a discount on their first month has hugely helped to improve conversions.
What’s been your biggest challenge so far?
Biggest challenge? This has been the education side of marketing. It has been challenging to explain a product clearly and effectively in a simple advert. Our solution was to concentrate on great content marketing, which allows us to provide value while elegantly explaining the product and its benefits. All credit goes to Sebastian for being an incredible writer.
What are you future plans for the business and the subscription model?
We are currently considering a number of different ideas that allow our customers to choose what is in their subscription without making the process complicated. Many of our customers love the simplicity of it all, while others want the flexibility to choose what it is they receive each month.
Currently we are working on four new ideas on how to make the subscription model better suited to everyone but without making it more complicated. There are some exciting things afoot.