Understanding email and database metrics in a subscription business

When looking to understanding the relationship between email channel and database health in a subscription business, we recommend starting by asking the following questions:

• What % of your subscription customers are opted-in to receive marketing emails?
• What is your email flow journey for subscription customers who are opted in vs. opted out customers? 
• How do these differ while keeping the same key touch points?
• Do I have the most important communications in place in for subscription? e.g. change of frequency, change of next date, cancellation confirmation, new subscription confirmation, etc.
• What % of revenue comes from subscription customers vs non-subscription customers?
• What is the ratio between subscription vs. non-subscription customers in your database?
• What is the engagement of subscription vs. non-subscription CR, CTR, unsubscribe rate - (to indicate content and strategy optimisation focus)?

Using Ometria’s segment explorer you can use the contacts and opt-in contacts metrics highlighted below to work out the percentage of subscription customers opted-in for marketing communications.

In this example, 74% of subscription members are opted in to receive email marketing: 

Assessing the value of subscription customers vs. non subscription

When assessing the value of a subscription vs a non subscription customer we suggest identifying a view with marketing opt-in vs. without.

Use the following key metrics to identify value:

• CLV / AOV of a subscription customer who is opted-in to email
• CLV / AOV of a subscription customer who is not opted-in to email
• CLV / AOV of a non-subscription customer who is opted-in to email
• CLV / AOV of a non-subscription customer who is not opted-in to email

You can find these metrics by using our segment explorer and add filtering for subscription / non-subscription customers using custom fields or products purchased, depending on your setup. 

For example, the filter below is set for customers whose subscription membership status is set to “TRUE” and who are opted-in for email marketing.

You can see the metrics for AOV and CLV highlighted:

When we change the accepts email marketing status to is not opted-in, we can see that AOV and CLV for these customers is lower than those who are opted-in for marketing, which demonstrates a positive relationship between email marketing and purchase behaviour. 

Identifying the behaviours of subscription vs. non-subscription customers 

Questions to ask yourself to identify the behaviours of subscription customers:

• What is your order frequency goal? 
• Do you see trends in cancellation, e.g. during certain seasons/months?
• Where are the majority of your subscription customers acquired from?
• What is the order gap from becoming a lead to converting to a subscription customer?
• What are the key incentives to becoming a subscriber - have you found a lever that works on getting non-subscription customers onto a subscription?

Gifting vs self-purchase

• What proportion of subscription customers are using the gifting option vs. not?

Subscription Frequency

• What are the most popular frequencies chosen and how do key metrics look for one month, three months, etc. Focus on AOV and CLV. 
• Do you allow customers to change or customise their frequency?

Competitors

• What are your competitors doing both across email and on-site activity specific to subscriptions?

Other questions on functionality and strategies

• Are there bounce back initiatives in the subscription boxes?
• Can incentives be applied on e.g. first order and fourth order, to support repeat rate and retention?
• Are there any trends in cancellation rates based on subscription items? Has research been done to see how the contents impact customer behaviour?
• Do you have a loyalty programme? If so, how does your loyalty program sit with the subscription? Is it related at all, and embedded as value-add for the customer?

Non-subscription customers

Identifying the next set of potential subscription customers or those who might never opt for this service but still want to hear from you in key in a subscription business.

Here are key metrics and questions to ask yourself when assessing the value of your contacts who are not on a subscription service: 

• How have you identified the average customer?  
• What is the order frequency of a non-subscription customer?
• What is the AOV of a non-subscription customer?
• What is the CLV of a non-subscription customer?

Best practice examples

Non-subscriber: Replenishment subscriber conversion campaign

Brand: Augustinus Bader

Why we love it: 

• Highlights the consumer perks of signing up for the subscription programme including the loyalty points they can earn as part of the service 
• Clear CTA which guides the contact to take action

Brand: Hotel Chocolat

Why we love it: 

• Highlights benefits of subscription in replenishment campaign to promote never running out again
• Personalises content based on the category of purchase - Sleekster
• Carousel style product selector of monthly curated collections
• App download reminder to drive continued customer loyalty

Brand: Freddie’s Flowers

Why we love it: 

• Encourages existing membership customers to refer their friends to join as a way of generating new leads
• First name personalisation in copy 
• Lays out steps to refer in easy to follow format 

Subscription reactivation campaign

Brand: Pact Coffee

Why we love it: 

• Personalises the reactivation message based on the customers reason for pausing their subscription 
• First name personalisation has been used in copy
• Highlights key reasons to stay with Pact