Maximizing Subscriber LTV: How to Get More From The Customers You’ve Already Got

Dive into these five proven ways to boost revenue by encouraging subscribers to add on to their monthly orders… or winning those monthly customers back after they’ve canceled.

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We recently sat down with Alexa Kilroy, Director of Marketing at Stay Ai, to discuss five quick ways to boost subscriber AOV and LTV. Alexa has been working in eCommerce for the past five years. She has experience on the brand side and in growth marketing, advertising, and brand strategy. She now heads a team of marketers at Stay Ai, a cutting-edge subscription management platform that's all about growth and performance.

“When you think about the subscriber lifecycle,” Alexa said, “customers will skip or pause their subscription for a month, and that's revenue loss for your brand. Even though you might retain the subscriber, you didn’t make money on them that month. And when it comes to expanding their value, unless you're actively reaching out to them or have things built into your customer lifecycle  to upsell and cross-sell to them, you probably aren't expanding their monthly value.” 

In other words, with the correct nurturing and nudging, these “good” customers can be transformed into VIP customers who spend more, spread the word about your brand, and remain loyal for life. Targeting these “regular” subscribers with just-right, personalized, and A/B testing strategies is a key retention tactic. After all, a subscriber can cancel anytime, causing that essential monthly revenue to disappear. Nurture them carefully, and they won't just stick around — they’ll start to try new products, too. 

In this article, Alexa will give us insight into some of the most popular and quick ways she and her team have seen brands maximize their subscriber LTV. You’ll find pro tips and actionable hacks to improve your retention strategy and provide a better customer experience (CX) to your most valuable customers — not to mention transition casual shoppers into your VIP community cohort. 

Here’s what you can expect to learn:

1. The 411 on A/B testing upsells and cross-sells

2. The best way to leverage Klaviyo's quick actions to sell more using add-on purchases

3. How to trigger subscriber win-back flows

4. How to turn one-off buyers into loyal subscribers

5. How to optimize your customer portal (and boost AOV and LTV while you’re at it)

Let’s get started.

1. The 411 on A/B testing upsells and cross-sells

Because Alexa’s focus is so deep in the subscription and retention space, finding ways to help brands increase the value of their existing subscribers is always top of mind. This is especially true for new customers who come to Stay Ai from a legacy subscription management platform. These companies already have some sort of subscribe and save option on their website, and they love the revenue that comes from recurring subscriptions every month. 

But too often, these brands aren't actively optimizing their subscription or retention marketing. As acquisition costs for new customers skyrocket, maximizing LTV for customers your brand has already paid to acquire is actually one of the most effective ways to scale your revenue.

But how do you know what increases AOV and LTV for existing subscribers? A great place to start is with A/B testing. 

Alexa is all in on using A/B tests to determine what promotional offers get the highest take rates for a given customer cohort, then automatically applying whatever strategy performs best based on broader cohort parameters. 

According to Alexa, while many brands use A/B testing to determine what works to attract new customers, it's rare that a brand uses such testing to figure out what encourages existing customers to spend more (or stick around for longer). That's a mistake. And it's leaving dollars on the table for customers your brand has already spent a lot of money acquiring.

Examples of AB testing for existing customers include:

  • Test upselling product A vs. upselling product B
  • Test upselling with a $ off discount vs. a % off discount
  • Test upselling with X$ off versus Y$ off or X% off versus Y% off

Remember, different customers will respond to different deals in unique ways.

“One of the most effective tests we see across subscription brands is a product-based test, in which the brand tests offering an upsell discount on a seasonal product versus an evergreen SKU to see which one-time add-on purchase has the higher take rate.  Alexa said. “You can also test upselling a dollar-off discount versus a percent discount. At the end of your test, you may find that distinct customer cohorts find one type of deal more tangible than the other... Some customers might be motivated by a percentage discount if they’re comfortable with mental math. Others might prefer something like a $15.00 discount because it’s very concrete. That’s why we recommend testing those types of discount-based promotions against each other. 

And here's a bonus tip from Alexa: She and her team often find that unusual, odd-number discounts have a better take rate than traditional ones. Think 18% off vs. 15% off or eight dollars off versus five dollars off. Why? Quite simply, these numbers are unusual, and they catch customers' eyes. And it's hard to make a sale if customers aren't paying attention.

Here's an example: Moon Juice scaled their add-on revenue +131% in 90 days by testing, then offering targeted promotions to their subscribers using  Stay Ai’s promotions tool, ExperienceEngine. The brand now cross-sells and upsells products by segmenting customer cohorts based on prior purchase behavior. 

A/B test with Moon Juice's ExperienceEngine. This tool can help you really differentiate your subscription programs — and decrease churn, boost AOV, expand product exposure, and build brand affinity.

2. The best way to leverage Klaviyo's quick actions to sell more using add-on purchases

Alexa’s next suggestion? Using Klaviyo’s quick actions with email segmentation to boost add-on purchases.

The crux is simple: When launching a new product, running a sale, or sending an upsell/cross-sell campaign, place a Klaviyo quick action button in emails so customers can add on a product in just a few clicks. It works for many brands and definitely worked for Stay AI customer Beekeeper’s Naturals.

“Beekeeper’s Naturals deeply enhanced  their email flows to their subscription customers, offering discounted one-time add-ons or subscriber-exclusive sales by implementing those quick action buttons into their ongoing customer communications, combined with other revenue expansion efforts, they've seen a 63% increase in monthly recurring subscription revenue.

The result? Not only are Beekeeper’s Naturals' existing customers adding on new products, but they're trying them, loving them, and then saying, I'm going to order that again next month… I'm actually going to add it to my subscription.

So, by adding these little buttons to communications you were already going to send out to existing customers, you are boosting the LTV and AOV of existing customers.

Email marketing that educates customers about subscription perks, builds excitement, and incorporates CTA buttons will seriously boost engagement.

💡 Another great tip from Alexa: while you can suggest adding products to a subscription, she and her team have found it easier to encourage existing subscribers to try a new product as a one-time purchase. Then, when they love it, they can add it to their subscription. Bonus points if you send an email or other communication (think: push notification) asking them if they're enjoying it and nudging them to add it to their subscription. (Twice the bonus points if you offer a discount. Three times the bonus points if that discount features a strange, odd number…)

3. How to trigger subscriber win-back flows

According to Alexa, one of the biggest misses (and one of the biggest hits to a brand's profit and loss statement) Is not knowing precisely what to do to win back lost subscribers.

Win-backs don't have to be stressful — and they don't have to be a lot of effort, either. According to Alexa, great win-back campaigns simply require a brand to truly understand how they lost a subscriber or even a customer in the first place. That starts with an excellent post-purchase survey to understand purchasing intent from day one, along with an effective cancellation flow that asks all the right questions.

Of course, you don't want to slam former subscribers you've lost with a zillion emails trying to win them back. But if you understand why they left — perhaps they were bored with the product, or the subscription simply got too expensive — you can make a tailored attempt to win them back at the right time with the right offer.

 But how do you know exactly when to pull the trigger? Automate it.

 Together, Stay Ai and Klaviyo can team up to reach out to a former subscriber when:

  • The customer comes back to place a one-time purchase.
  • A new seasonal or limited-time item has become available.
  • Someone's subscription cancellation reason aligns with a brand update. For example, someone canceled because they didn't like the scent of your product, and now you have a fragrance-free formula.

4. How to turn one-off buyers into loyal subscribers

You already know how important it is to secure revenue dollars through subscriptions you can count on. So, once a newly acquired customer makes that first one-off purchase, how can you boost their LTV by turning them into a subscriber?

Here are five great ideas:

  • Offer a trial or a starter kit that rolls into a subscription.
  • Offer a free gift during subscription sign-up.
  • Highlight bundle and save options, or allow customers to build their own bundles with total management flexibility via a customer portal.
  • Send SMS messages to upsell customers to subscriptions, highlighting value props. (If you have an app, you can send a push notification instead.)
  • Tease subscriber-only promotions or exclusive perks on your website, near your subscribe and save button, or via your app.

One good example is Stay Ai customer and pet brand A Pup Above, which makes various pet foods and treats. Subscriptions are customized based on how many dogs a customer has, what flavors of food their dogs like, whether their pets have skin conditions, and so on. And because every family of dogs is different, the brand allows customers to build their own subscription bundles so they only get what they need.

Subscription customization is key to allow users to build bundles so they can get exactly what they need.

5. How to optimize your customer portal (and boost AOV and LTV while you’re at it)

Your customer portal is an extension of your customer experience. A branded, intuitive, and optimized customer portal is essential for increasing your customers' AOV and LTV. Whether they are in the portal to tweak next month's order or pause a subscription, there are tons of opportunities to boost revenue, including:

  • Placing an upsell carousel at the top of the portal with well-matched suggested items to buy.
  • Suggesting customers gift an upcoming order rather than skipping or pausing it.
  • Adding in-portal banner ads with a one-click add-to-cart button.

These in-portal banner ads, in particular, have been very successful. According to Alexa, these banners can feature anything from discounts on new products to seasonal launches. For example, if you're featuring a new pumpkin spice coffee, advertise it on the portal banner and allow customers to add it to their subscription cart, either as a one-time purchase or as a recurring subscription. You can even add a discount here to incentivize the purchase.

Whether you implement all these tips and tricks or just one or two, you’ll surely see a boost in your subscriber LTV. And remember — this doesn’t have to be a ton of work. With the right tools and tech, nurturing your existing customers is easier than you think.

Want to learn more from Alexa? Chat with her on Mentorpass & follow her on Twitter

Pro tip: If you like this interview, don’t miss out on our CX for Experts Guide!

In it, we’ve rounded up 5 DTC leaders to share their personal tips driven by real results. This guide is for strategists looking to build an experience that’ll keep your customers coming back again and again.

Build Stronger Relationships     Build Stronger Relationships     Build Stronger Relationships     Build Stronger Relationships     Build Stronger Relationships     Build Stronger Relationships    

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