It’s often a huge challenge to figure out what you should deliver to your subscriber members each month for maximum membership retention and renewal. Plus, you want to deliver something that’ll create referrals and social buzz. This challenge is even more difficult when you are a subscription box trying to negotiate with a company to deliver hundreds or thousands of items so you can ship them to your subscribers as part of their monthly subscription box. There must be a constant balance between getting your hands on products and investing the time and relationship capital to obtain the ones that’ll generate a huge impact. This is the same for a SaaS company choosing which new features to develop or a publisher working with editors to create content.
In my recent interview with James Erickson, owner and CEO of Stridebox, a subscription box service for runners, we discussed his solutions to the problems of getting items for Stridebox that drive engagement, how to balance content that members would readily appreciate versus delighting them with new discoveries, as well as how to engage subscribers to create a community.
James came from a background in newsletter publishing and transitioned into subscription boxes. From the outside, it may appear that these are very different, but to James, fulfillment and the need for membership retention were similar. He said, “…if you look at a printed newsletter you have a package, a newsletter, different inserts for the package and a mailing list. It's really very similar [to subscription boxes.]”
The big difference with newsletters and subscription boxes are the products that ride in the box versus the articles in a newsletter. What does it take to get the hundreds or thousands of products to ship out to your subscription box subscribers? James answered, “I found out very quickly that it wasn't that difficult. It's one of those that if you ask, somebody is going to say yes eventually. It's just a matter of putting your head to the grindstone and doing your research on the products, and figuring out what's a good fit for your audience.”
But then there’s a big question of which products will improve membership retention. Do you deliver products in your box that customers will recognize as valuable from brands that add to the prestige of your box, or do you focus on delighting your customers by helping them discover products they’ve never experienced before? James answered, “The first year, we tried to align ourselves with as many big companies as possible. We wanted the Power Bars in the box, because everybody knew about Power Bar. We wanted Gu in the box, because everybody knew what an energy gel was in our market. We tried to align ourselves with companies like Mizuno and Nike, and Adidas, and put their advertising or inserts in our boxes, or give discounts to our subscribers. We wanted to play ourselves as ‘We're that brand with those connections.’ Today a lot of our product choices are based on things you don't see every day - The mom and pop shop in Idaho that's cooking gluten-free, vegan cookies that are full of protein - The place out of Washington called ZipFit that not everybody knows about that's like a powdered drink mix company. We don't want to give somebody the same thing, the same brand, the same flavors, two or three months in a row, because that doesn't lead to longevity of the customer. If you wrote the same article for your newsletter three months in a row, people would kind of get tired of it.”
And while including the best products is crucial for success, membership retention always comes down to the power of the community you build. For Stridebox, they put their subscribers into their box. James explains, “we started doing a monthly card photo submission. Each month,

Recurring revenue is the single biggest growth factor and stability for businesses today. Rather than having a revenue that is dependent on individual transactions, subscription revenue grows as you add new subscribers to the continuing revenue from subscribers that were added last month, and the month before. Yet, many subscription businesses struggle and fail.
Perry Marshall, one of the world's most expensive and sought-after business consultants, endorsed by FORBES, INC Magazine, and the most respected marketers in the world, recently interviewed Robert Skrob about the subscription economy. In addition to a wealth of information and advice for the subscription economy, Robert revealed what subscription businesses must do to grow recurring revenue including: how to launch a new subscription business to generate recurring revenue, how to generate new subscribers, and how to onboard new members to increase lifetime customer value.
The Single Most Important Ingredient for New Subscription BusinessesThe best way to start a subscription business is with an existing customer base if you’re already in business, or with a well-defined group sharing a common interest or need. Robert states that “studies show it’s five to seven times cheaper to sell to an existing customer than to get a new customer.” So, for businesses that already have a well-defined audience and an established reputation with them, you have a leg up on getting a subscription business started.
Once you’ve identified your target audience and their common need, passion or problem, it’s important that your subscription product or service is a solution or a transformation they’re looking for. “Rather than focus on the thing that you're selling, instead sell the emotional outcome of implementing the thing that you're delivering and how the customer is going to feel when they have it implemented. It all begins with that key. If you begin the relationship on ‘I got this stuff and I'll give it to you as part of this membership,’ then you'll never have the relationship. It's what I call a series of one-night stands instead of a relationship that you can build on where you're helping them accomplish these goals and dreams in their life.” Robert adds, “the leading cause of stagnant membership growth is a transactional membership model versus a transformational one.”
How to Attract New Members and GrowOnce you’ve identified your target customer and the transformational product or service you have to offer them, it’s time to sell. “One of the key things is there has to be a sales system. So many subscription businesses work on creating the best website in the world but they never spend enough time attracting new customers to it. You need to have lead attraction and lead conversion systems in place that are creating a steady flow of new members without the owner or management having to perform,” says Robert.
He adds, “Your paid advertising, partnerships with influencers, social media content, and other methods of outreach should all be focused on generating leads. What customers want is a transformation – to have a problem solved, to have fewer worries and less anxiety.” That’s your sales message in every sales method you use.
Whether you have a sales team or not, it helps to have an automated process in place that attracts leads. Robert calls it the ‘Wheel of Attraction.’ You need a system that is designed to optimize leads and convert them to customers on an ongoing basis. Your membership growth requires an outreach to bring in the unconverted and welcome them into the group.
Improve Retention and Subscription Growth by Implementing an Onboarding and Customer Success SystemA subscription business needs to continually add new members to grow, but the essential ingredient to the predictability and the growth of recurring revenue is member retention Your wo...

For 99 percent of the subscription economy, every subscriber receives the same thing. It would be unthinkable for a publisher to create a unique magazine for each subscriber, or for a SaaS company to create a unique software tool for each customer, or for an association to create a unique experience for each member. However, that’s exactly what the most forward-thinking subscription boxes such as PupJoy do every month. Continued
It’s Okay to Be PersonalPupJoy is a subscription box service for dog owners. Its founder and CEO, Dustin McAdams, refers to these dog owners and dog parents. PupJoy takes a unique approach in the subscription economy by creating their business model around customization.
The customization that PupJoy puts into each box is what sets them apart. Dustin says, “We're a very highly customized model so we tailor everything for the dog owner from dietary needs, toy types, delivery schedules, size of dog, and size of packaging. We focus on making sure the customer gets exactly what they want for the needs of their dogs on a schedule that fits for them.”
Delighting the customer is the key to their success. Their customer service includes personalized, customized, continuity-driven, convenient services. “We curate an experience and we focus on really high-quality stuff - everything from presentation and packaging; but, at the end of the day, when we're talking about managing the business of growth, retention, making sure we don't have high churn, we believe customer service is very strategic,” states Dustin.
A Customer-Led Marketing StrategyDelighted customers not only keep their memberships, but they become part of your marketing strategy. Dustin shares that “social media and interconnectivity allows for a lot of advantages when you do the right things. We’re blessed with really good customer reviews and a lot of social sharing where some folks actually market for us. I don't think there's any substitute for the value of that. So, we focus on nurturing that and we will continue to invest in ways where we can authentically help facilitate that.” He adds, “At the end of the day I think anybody that operates in our space deals with this challenge of short attention span, highly competitive fragmented media type of market so you have to stay on top of it. I think the brands that are doing things authentically, and have really good customers, have a leg up because there is no substitute for your customers marketing for you.”
Maintaining Your Focus on the Customer’s Needs to Improve Member RetentionRetaining members is a constant challenge, and it requires a continuous focus on what the customer wants. “Once we have a customer at PupJoy, they're delighted by the flexibility of customization,” says Dustin. The customization that PupJoy offers is highly tailored. For instance, if a customer has received more dog treats than they need, they can switch it up and have an all-toys delivery, or another category. “Every box that goes out of our warehouse is, in essence, a customized box. We allow customers to choose from a number of categories, 28 in total right now. That means the picking and packing environment for every box is unique, and that means all the data and logistic operations in between that have to be very well coordinated. We offer 100% customer satisfaction on everything that goes out the door so we work very hard to make sure that we are spot on with our execution because, if not, we replace it for free.”
Going Beyond the BoxPupJoy’s success goes beyond their box. “We also have an e-commerce store - a lot of replenishment items if somebody finds something in the box they love and they want more of, or larger ticket items that typically,

Discover how to grow your subscription business from the explosive growth of the subscription box industry. Subscription boxes have become the single fastest segment of the subscription industry over the last 12 months, as have the number of offerings. What leads to fast growth within subscription boxes can help you grow your own subscription economy business.
At the center of the subscription box industry is my recent guest on Membership and Subscription Growth podcast, Amir Elaguizy, the co-founder and CEO of Cratejoy. More than 4000 subscription boxes rely on the Cratejoy platform for marketing and fulfillment. Amir has seen what works within the subscription box industry and what leads some subscription companies to fail.
Membership retention comes down to subscription fundamentals, understanding what your customer wants, delivering tangible value and delivering a terrific unboxing experience.
Understanding your customer and knowing what excites them is the first key. Some subscription boxes create their product by discovering products that are available from sponsors or at low wholesale prices. However, successful subscription boxes instead focus on what customers want. Amir said, “True North is whatever consumers want to get. Then over time, as they start to achieve scale, they're able to cut deals with advertisers and run all sorts of specials and sometimes those products that their advertisers sell actually make sense inside the box.”
When asked if he sees some commonalities among the most successful clients, he responds “it’s really clear that, over the long term, the people that win are the ones that are hyper-fixated on product quality and product value. They're obsessed with the product quality. So, they are actually into the products that they're selling, they know what good looks like, they know what bad looks like. They know how to curate them in a way that tells a cohesive story.”
Why are product quality and value the two areas that Amir advises you to focus on? According to Cratejoy’s client statistics for subscription box purchases, Amir shares that “about 70% of people are buying for themselves, and about 30% of people are gifting it to others. The people that are buying it for themselves, it's mostly, ‘I love this thing and of course I would like to get more of it on a recurring basis.’ So, it's not a straight discounting or a straight value purchase, it's an emotional purchase. That said, the value is where membership retention comes in. So, if they look at the products when they show up after the first purchase, and then do the mental math on how much it all costs, and they say this doesn't look like I got much or any of a discount on this at all ...they're not going to stay subscribed. Whatever it is, the initial purchase is an emotional one, but the subsequent retention is largely tied to perceived value.”
Making that unboxing experience an amazing one is vital to membership retention. To know what that experience is like, Amir suggests that you purchase other subscription boxes for yourself. “You need to have them show up at your house. You need to experience what it's like to open them, and you need to see the difference between bad and good. You need to understand the content that's coming along with the products itself. It's not just about the products. You need to see how they make you feel - the value and the sort of hand-picked and personalized effort that's gone into each box, or they don't, and then you cancel, right? You need to actually experience that, so I always urge people to have subscriptions. At any given time, I have 20+ active subscriptions.”
A keen focus on quality and value - These are the things that the best of the best in the subscription box industry do.

Every group exhibits language and behaviors that are unique to them. What makes certain cultures so effective at innovating change, while others are a misery to everyone who participate? How can you change a culture to unleash your group’s potential, grow your company and increase your membership retention?
I talked with Dave Logan, co-author of Tribal Leadership, about what the beliefs, attitudes and loyalties of a group can reveal about its culture, and how to improve that culture for better results.
Dave is a bestselling author, management consultant, and faculty member at the USC Marshall School of Business. Dave co-founded CultureSync in 1997, a management consulting firm specializing in cultural change, executive coaching, and strategy. CultureSync’s clients dozens of Fortune 500 companies, major nonprofits, and governments around the world.
Logan’s insights will lead you to breakout performances within your corporate team and to greater satisfaction and membership retention for your association, training program, or any other type of subscription organization where members interact with one another.
How Diagnosing Your Tribe’s Culture Can Lead to TransformationThe basic building blocks of any culture is the tribe— a group of 20 to 150 people focused on making an idea successful, Logan says. Big organizations are made up of smaller tribes that join to form a larger tribe of tribes.
If you measure a tribe’s culture on a scale of one to five, and then elevate that culture just one level, performance can increase by 300 to 500 percent, he says. “It’s the most important thing you can focus on,” Logan says. “Culture eats strategy for breakfast.”
To identify a tribe’s stage, look at what the people in the tribe say and do:
Stage One – This tribe believes “life sucks.” Life is unfair, and God just messed this up. People in Stage One steal, commit fraud, punch each other in the face and worse.
Stage Two – This tribe believes “my life sucks.” They behave passively and avoid accountability. They spend their time griping and complaining and do just enough work to not get fired.

Stage Three – This tribe believes “I’m great (and you’re not).” People in this stage are busy self-promoting and competing with one another. They get very little done.
Stage Four – This tribe believes “We’re great (and they’re not).” Think of sports. There’s usually a common vision and a common adversary. The team sets aside individual egos and takes ownership of group goals.

Stage Five – This tribe believes “Life is great.” There is no “us” and “them.” Stage Five tribes are driven purely by values, and that produces world-changing innovation. However, they can sound a little crazy and unstable, like the dot com companies which said, “We don’t need revenue, all we need is eyeballs.”
How to Move Your Tribe from “My Life Sucks” to “I’m Great”Tribes at Stage Two feel unempowered. To get them inspired, it’s best not to take on the whole group, Logan says.
“The negativity is just too great. It'll overwhelm you,” he says. “They'll make sarcastic jokes about you and character assassinate you without you even knowing that it happened.”
Instead, find one person in the tribe who wants things to be different and mentor him. Offer specific advice, like “Let’s start by getting organized.” Or, “Let’s start by setting some goals.”
“You're not trying to improve the tribe, you're just trying to elevate that one person,” Logan says.
After a week or a month, that person moves to stage three and says, “I’m great.” But they look at everyone around them, and they all really suck.
“And at that point,

Subscription businesses benefit from the advantage of recurring revenue. Acquire new members and keep your existing ones. Sounds simple, right? We understand it’s not that easy. How do you keep your recurring revenue if your members’ credit card charges are declined? When you charge the credit card that you have on file, send the product or service, and then find out the charge was declined, that’s called involuntary churn. And, it sucks. It sucks out your revenue, and the hassle often sucks out the member’s subscription.
I met with Paul Larsen to discuss this challenge. In addition to a lengthy list of credentials and experience, Paul is the owner of PaulLarsenConsulting.com, a company with a focus on helping businesses conquer involuntary churn and increase their recurring revenue.
You will discover:
• Why “lowest price” merchant services firms can lead to increased credit card declines and decreased recurring revenue from existing members.
• Why you are getting so many credit card declines (and it’s not necessarily because your customer doesn’t have available credit) and what to do about it.
• Current trends in the credit card industry and how they impact credit card declines.
• Auto-updater services that get you credit card data when your customer receives an updated card with a new expiration date.
• How to identify a credit card processor that can help you get more charges approved each month and increase your recurring revenue from your existing members.
What are the Biggest Causes of Credit Card Declines?You see the recurring revenue of your existing members decreasing at a rate higher than your churn. This is what happens with involuntary churn. The charges on your members’ cards start getting declined. Incorrect card information is the biggest cause. When a member’s card information changes, you are not often notified. There are several unintentional reasons for the change, and the customer often fully intends for you to receive your payment.
Card information changes when members are issued new cards. This happens when they lose a card, experience fraudulent charges, change out their card preference for a new rewards program… and the list goes on.
An additional disruption in the system is occurring because every card in America is being reissued with chips. Almost all of them are reissued with new expiration dates if not new account numbers. “Because every card has a new piece of information, the old legacy information has been switched out on which the last charge for that subscription took place,” explains Larsen. “So, we've seen overall decline rates steadily rising over the past two years again, in large part because of this mass reissuance.”
“The period of great volatility has been about four years now because, even before the chips, there were the massive breaches at Target and Home Depot, so those two breaches alone caused 110 million credit cards to be reissued. Plus, we're all losing our credit cards it seems, at least once a year,” adds Larsen.
Companies who have merchant processors who don’t deal with this issue have seen self-involuntary churn triple in the past 18 months. And it’s not over yet. While most credit cards have been reissued with chips, still many hundreds of millions of debit cards are yet to be chipped.
At a time when you are doing all you can to keep your members, this problem becomes a huge hassle for them. They have to proactively update their information. It’s giving the member the opportunity to look at their subscription and decide if they want to renew or not. When often, a card that is regularly charged goes without their attention and the subscription continues.
In addition to changing card information,

Why would your company want a member instead of a customer? Studies show the valuation of companies in the membership economy are anywhere from five to 10 times the size of similar companies which use transactions. That’s according to Robbie Kellman Baxter, author of The Membership Economy. Baxter is a Silicon Valley marketing consultant whose clients have included Survey Monkey, Netflix, Yahoo, Oracle and eBay.
I recently talked with Robbie about what she calls “the forever transaction,” a customer who sticks with you forever. You will learn insights she’s gained from advising nearly 100 organizations on growth strategy.
Why Would A Company Want Members Instead Of Transactions?Long-term members give entrepreneurs a more predictable cash flow, says Baxter. Also, companies are able to invest more time and money to acquire a new member than they could for a one-time sale.
“So many transaction-based companies invest in acquisitions, and then don’t retain the customer,” Baxter says. “They’re on a constant treadmill, and it’s like a hamster wheel. You’re always running to keep up with new products or enough offerings, and you have to keep finding new customers.”
A membership business lets entrepreneurs get to know one set of customers and continue to serve their evolving needs. Acquisition costs go way down, and profitability goes up.
Why Would A Customer Want A Forever Transaction?So why would a customer buy a membership instead of, for example, a course that teaches them a skill one time? It’s because a membership can keep solving their ongoing needs, Baxter says. But, it’s also important to structure a business that does so.
For example, if a customer takes an online course teaching him how to draw, once he’s learned all he wants, he doesn’t need the membership anymore. But if the business gets to know its customers, and really understands their challenges, it can continue to expand its offerings. It can teach how to earn a living from drawing, how to use drawing software packages, or how to get into art galleries.
“Then they will stay for life,” Baxter says. “Because they want you to solve their problems forever.”
How Do You Change A Company’s Culture To Fit The Membership Model?To move from a company based on transactions to one based on memberships demands a different mindset. One that’s focused on the long-term happiness of customers as opposed to short-term revenue, Baxter says. That can mean weening owners away from over-reliance on the metrics found in quarterly reports.
“Because the transaction isn't as important as retention,” Baxter says.
The company should also evolve to focus more on member satisfaction and engagement. Members will expect better treatment than one-time customers. They’ll expect to have more of a voice.
“If I buy a Hershey's candy bar, I don't expect to get Hershey's to listen to me. It’s a completely anonymous transaction,” Baxter says. “But if I own a subscription to the Chocolate Garage, where my membership lets me buy chocolate every month, if I don't like the selection, they're going to hear about it. The company will need to have customer success philosophies in place to manage that feedback.”
How Do You Build A Relationship That Keeps Members Long-Term?“Onboarding is one of the most overlooked opportunities to engage and deepen valuable customers relationships,” Baxter states. She lists the following three activities that companies are doing to have effective onboarding.
1. Reinforce the wisdom of the member’s decision. When a customer buys something, he almost immediately wonders whether he did the right thing.
“So, if you say right away, ‘Congratulations you're taking the first step toward having the career of your dreams. We're going to help you. You're already better than 99 percent of people who don't even take one step,

The subscription economy is exploding and everyone is wanting the benefit of recurring revenue. Today the world is awash with subscription options-Netflix, Amazon Prime, SalesForce.com, Dollar Shave Club, and so on. Sure, you offer a dynamite software as a service company, a great training program, a unique product, or vital business intelligence, but how can word of your business cut through all the noise?
To gather some insight from an expert in the subscription economy, I talked with John Warrillow, author of bestselling books like Built to Sell - Creating a Business That Can Thrive Without You and The Automatic Customer - Creating a Subscription Business in any Industry. John is also the founder of a subscription-based company called The Value Builder System, where advisors help company owners increase the value of their businesses. Before that, he founded Warrillow & Co., a subscription-based research business dedicated to helping Fortune 500 companies market to small business owners.
The lifeblood of every business is repeat customers, says Warrillow. “Automatic customers,” people who buy subscriptions, are the best way to ensure that your recurring revenue continues forever. To give yourself the market edge, you’ll want to pay attention to three numbers: 10, 90 and 3.
Make Your Subscription 10x More Valuable Than a Single SaleOnce upon a time, the monthly credit card statement had five or six charges—the utility bill, cable TV, etc. Today, small incremental charges—the Netflix subscription, Microsoft Office 365, Birchbox—fill the pages and stretch on. Consumers are feeling subscription fatigue. They’ve raised the bar on what they’ll buy. How do you compete?
Warrillow advises that you consider the 10x versus 10% theory. “Try to develop a 10x value proposition that makes it ten times more valuable to subscribe than to simply buy on a one-off basis; because, nobody is going to subscribe to your product or service to save ten percent,” he explains.
California-based information marketer New Masters Academy does this. It developed an online learning library. When you subscribe, you can learn watercolor painting, how to make better pottery, and more. Their competition is the community college, where it might cost $600 or $800 to attend a live training workshop.
“For $29.95 to subscribe to New Masters, you can make the case that the customer got 10 times the value they would have gotten from going to a single live workshop,” Warrillow says.
Build Subscriber Loyalty Within the First 90 Days You’ve sold a membership, time to move onto the next buyer. Wrong. You’ve got the first 90 days to get your customer to be transformed by, or learn to depend on, your product. Otherwise, the member won’t keep the subscription, and that recurring revenue you counted on decreases. The key is to keep your buyer engaged.
“Statistics show if you're able to change their behavior, get them to interact with you, feel good about you in the first 90 days, their likelihood to churn (cancel the subscription) drops off a cliff,” states Warrillow. “They will be subscribers for a very long time.”
On the other hand, if you ignore the customer for 90 days, and then see they never used the product you sold to them, you’ve lost them. “There's virtually nothing you can do after the 90-day period that will re-engage them,” he warns.
“It’s why companies like Amazon and Netflix have entire teams, boardrooms full of whiteboards choreographing and storyboarding the first 90 days of their relationship. They will go to the point of really looking at whether to send a third email on the sixth day. They even statistically validate whether it's better to send that email on the sixth day or the seventh day.