Subscription box key success factors: 3 of the most important indicators of success

  • by

Monitoring performance is a key component of success – actively monitoring performance can help drive improvements, while also alerting you to declines in performance. Below are some important key success factors for subscription box services – key dimensions that it is important to consider and monitor.

Key Success Factor 1: Low customer churn rates

One of the most important components of success with subscription boxes is a low churn rate on customers. 

Possible ways of measuring customer churn include:

  • The mean and median lengths of time that subscribers have for subscribed.
  • Percentage of customers that continue past their first box (or discounted boxes).
  • Percentage of customers that cancel each box.

Key Success Factor 2: Word of mouth recommendations

Another indicator of success is the proportion of customers that you are able to attract through customer referrals. This is a good indicator of the proportion of customers who value your product or service sufficiently to actually promote it with others that they know. 

Growth through word-of-mouth recommendations is also a key way in which to generate interest in your subscription box service. 

Key Success Factor 3: Value provided to customers

Another key dimension to consider with subscription box services is the actual value that you provide customers – potentially the cost of the items included in the subscription box relative to the price that you charge. For some subscription box services, the value will exceed the cost to customers – potentially able to draw on purchasing economies of scale, or trial items that you are able to buy at a discount – to be able to offer items at a discount to customers.

For other subscription boxes, once delivery is taken into account, the cost of the subscription may not equal the individual item costs. Without substantial value provided for customers, it will be a lot harder to maintain a customer base.  

Related Articles