Hear how subscription-based businesses tackle retention challenges and customer cancellations. Discover the transformation of a sweat solution into a dermatologist-recommended brand and the complexities of rebranding it. Learn unique customer loyalty strategies like cashback incentives and the importance of clear communication in reducing churn. The hosts discuss the journey of navigating subscription platform challenges and the critical role of customer feedback in shaping product offerings and enhancing satisfaction.
Carpe's success hinges on effectively addressing product buildup issues by allowing customers to easily adjust subscription frequencies to enhance retention.
The evolution of Carpe's offerings was driven by customer feedback and dermatologist insights, highlighting the importance of adaptability in product development.
A strong emphasis on customer experience and streamlined subscription management has been crucial for fostering loyalty and reducing churn rates.
Deep dives
Understanding Customer Cancellations
A significant insight shared highlights that many customers visit cancellation portals because they feel they have too much product rather than due to dissatisfaction with the product itself. To address this, a solution has been implemented allowing customers to easily edit their subscription frequency, which can prevent cancellations. Many companies default to simply delaying deliveries, but this approach often does not resolve the underlying issue. Ultimately, understanding and addressing the reasons behind customer cancellations is crucial for enhancing retention.
Foundational Product Development Journey
The brand Carpe began as a solution to a personal problem faced by its founders and evolved due to feedback from dermatologists, indicating a need for effective sweat control beyond just sweaty hands. Originally anticipated to be a niche product, the founders discovered a broader opportunity in the antiperspirant market, leading them to develop solutions for various body parts experiencing sweat. Their relentless focus on creating effective, non-greasy formulas positioned them well in a competitive landscape. As a result, they garnered significant attention and recommendations from dermatologists, validating their innovation and expanding their product range.
Strategic Importance of Subscription Model
The subscription model is integral to Carpe's business, especially considering the nature of consumable products like antiperspirants, which require regular replenishment. After years of experimentation, the brand recognized the need to clearly present the subscription offering to customers, emphasizing its value and ease of use. Initial hesitancy from customers towards subscribing was addressed by simplifying the process and ensuring subscribers could easily modify their orders. This strategic alignment with consumer needs ultimately led to increased subscription adoption and customer satisfaction.
Acquisition Strategies in E-commerce
The company's acquisition strategy has evolved, initially leveraging Amazon for organic growth while later incorporating online advertising after seeing limits in their approach. They have adapted to the rapid changes in digital marketing, focusing on where their target audience is most active, such as on social media. The founders acknowledge the need to connect on a problem-solution level, crafting messages that resonate with potential customers' pain points. Overall, their success in customer acquisition stems from understanding their audience’s preferences and behaviors.
Improving Customer Experience and Retention
The importance of customer experience in enhancing retention is underscored through initiatives like improving the customer portal for easier navigation and subscription management. Notably, the emphasis on customer feedback from service tickets has been crucial in identifying areas for improvement, as success hinges on acknowledging and acting on customer sentiments. Additionally, the brand strives to create a seamless experience for customers, ensuring they can modify their subscriptions without unnecessary hurdles. This commitment to constantly refining the experience breeds customer loyalty and reduces the likelihood of churn.
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In this episode of Tomorrow Brand, Kasper and Daniel, COO and Director of Ecommerce at Carpe, discuss their journey to build a sustainable business model based on subscriptions. They share their insights on how they’ve evolved their acquisition strategy, overcome the challenges of product buildup, and focus on customer satisfaction through communication and continuous improvement.
💥 The biggest challenge with subscription retention is product buildup. Customers often cancel because they have too much product and don’t use it as frequently as they expected.
📧 Messaging plays a crucial role in customer experience. Changing packaging messaging from “apply twice daily” to “apply before bed” can significantly improve customer satisfaction and reduce churn.
🤝 Understanding customer feedback is essential. This episode emphasizes the importance of listening to customer feedback through reviews and support tickets to identify common pain points and improve the product and subscription model.
📈 Don’t fixate on churn rate. Instead of focusing solely on churn rate, focus on building a product and subscription model that customers genuinely love and will stick with.
🎉 Subscription success relies on a winning product. Focus on creating a product that solves a real problem for your customers and offers a superior experience to competitors.
0:00 - Intro
2:01 - Subscription model as a natural complement to e-commerce business
4:03 - Carpe's evolution from college project to business
5:10 - Initial sales on Amazon and dermatologists' recommendations
6:01 - Expansion of product offerings beyond underarm solutions
9:24 - Name change from "Clutch" to "Carpe"
12:02 - TV vs online advertising for customer acquisition
19:00 - Adjusting subscription frequency for customer satisfaction
21:51 - Reducing churn rates while ensuring customer growth
22:46 - Importance of product effectiveness in retaining customers who see results
24:11 - Improving consumption rates through product name and messaging
27:03 - Clear usage instructions on packaging
28:03 - Higher purchase rates when customers return for repeat products
30:31 - Cash-back incentive for first recurring shipments
33:10 - Passive churn caused by expired payment methods
36:44 - Transitioning to user-friendly subscription management system
39:02 - Strategies for customer retention and feedback analysis
43:07 - Closing advice on building a strong subscription-based brand
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