Access vs Convenience: The battle for driving high LTV from subscribers

Hey, happy Sunday! If you don't already have it in your hand, grab your favorite beverage (maybe a Spritz?), and pull up an ottoman; it's time to get relaxed. 

I have some resources/links and then we'll get into the meat (or tofu) of today's email. If you were forwarded this email, please subscribe so you don't have to wait to read it, and you'll also give me a serotonin boost! Click here to subscribe.

Here's $2k from Snapchat. Snap is a Sharma Brands partner, which means I can give anyone a link to spend up to $2k, and they'll match it! There have been lots of redemptions over the last couple of weeks, and my buddy who runs an LVMH brand's ads said Snapchat retargeting has been their most efficient channel, which is odd and awesome, for a channel like Snapchat.

Make a switch in your role. Companies like Neutrl, CrossNet, Jolie, Very Great, Caraway, and Sharma Brands are all looking to hire you. Click to apply here.

Masala Capital. After a very successful first quarter, investing into companies like Jolie, Spritz Society, Canopy, [redacted internet celebrity CPG brand], and others, the next quarter's fund is open. You can join as an LP with just $10k and get upside in all the deals that I see and join. Invest here.

Informative Twitter Threads. I just retweeted some awesome Twitter threads from the past week. Click here to read them. They're all under 4-5 minutes per thread, to read, and very informative. 

Marco Experiences. If you're unsure what to do with your team to celebrate a birthday, have a more fun "happy hour", or just a team-bonding activity, this looks really fun. They have everything from hot sauce making to murder mysteries to private concerts. 

Invest in Proven Skincare. You may have first heard of Proven Skincare from Shark Tank, but since then Ming Zhao, the founder, has built it into a multi-million dollar success. In 18 months, Proven has reached a $25M revenue run rate, and they are launching some exciting new verticals soon. Sign up to invest.

One quick ask. What's your favorite DTC product? I'm working on something fun, similar to the Gift Guide we did last year, and knowing this would help!

I'll be speaking at a variety of upcoming events, and they're all really fun events too. You can join me:

Yotpo & Shopify Announcement. I'll be hosting a panel with Health-Ade Kombucha and Starface on what they admire from Yotpo, what could get better, and what we want Shopify and Yotpo to build together as a result of their new partnership.

TechCrunch Disrupt. The iconic, the classic, and the notorious Silicon Valley-based conference. I'll be speaking alongside Jenifer (VP, Marketing, Elation Health) and Shoji (Head of Marketing, Point). I'm excited about this!

GeekOut Los Angeles. This is easily one of my absolute favorite conferences to attend because the real ballers are those who attend, not the speakers. The audience consists of DTC founders, creators, and people like the SVP of Thrasio. I've seen someone sell their business in a corner of the ballroom, and also met kids who make millions of dollars but are "underground" founders.

Subscription Summit. This one is happening soon at the end of this month in Dallas. I'll be speaking on the Subscription Journey, and you're actually helping me out by reading today's email (and hopefully taking 30 seconds to reply later). PS - let me know if you’re attending as I’m going to host a private dinner one of the nights.

Black Friday Summit. Hosted by my friend Chase, this is a great (free) way to get all the learnings, ideas, and plans for what others are doing to maximize their revenue during this year's Black Friday and holiday periods.

Black Friday Basics. Refersion's Erik Swanson and I will talk through how to plan for increased affiliate revenues this holiday season. 

But back to Subscription Summit...

In a couple of weeks, I am going to speak at Subscription Summit. I need to have my presentation wrapped up by the end of this week, so I wanted to get your feedback on what's most interesting. Today I dive into some thinking out loud around what works and what doesn't, and next Sunday I'll dive more into the analytics side, though I feel this is more important to set the stage for what analytics to look at.

Ok, here we go!

The average person, pre-DTC, probably hated the thought of signing up to a subscription. Services like the Financial Times, Tai Lopez's dating site, gym memberships, gaming sites, Spectrum, or really any telecom/cable company provoked PTSD from their scummy retention tactics. When you're ready to cancel it's either impossible to figure out how, or you get stuck with someone on the phone who will figure out a way to temporarily pause, lower your bill, or sell you another subscription in lieu. It's a huge business.

Then came along the world of eCommerce, and companies like Amazon started to introduce memberships, like Amazon Prime, in 2005. With one annual fee, you'd get instant access to faster delivery, at a lower amortized cost to you. Today, Amazon is one of the most successful subscription businesses, with just over $19 billion in annual revenue from over 200 million subscribers. The key to their growth has been unlocking more, and more access. 

When you look at the best subscription businesses or the ones with the most retention, they unlock access to their customers. Whether it’s online streaming services like Apple TV+ and Netflix or medical companies like Pawp and Hims, the high lifetime value subscriptions live within unlocking access to the subscribers. 

If you're not unlocking some sort of access, then the subscription to sell should be for the purpose of convenience to the subscriber. If you're selling a beverage that has a predictable cycle of consumption, like me with Olipop Vintage Cola, then a subscription makes it easy for the subscriber to not worry about being out of stock. As a consumer, the easier my life is, the better it is.

Convenience subscriptions are still not as sticky as ones that unlock access — which is why so many brands focus on building a community as a part of their retention tactic. With just being convenient, it's a very lean-back type of subscription, whereas, with access, you're consistently leaning in, making you feel like you're getting more worth out of your monthly subscription fee.

The punch line is to focus on what you can bring to your subscribers outside of just convenience. Media companies execute this exceptionally well, so look there for inspiration and really dig into the journey of a paying member.

Pushing someone to subscribe shouldn't feel like a chore when you're distributing a good product. In software, apps, and technology, many times subscription is the only way to use the app (Microsoft Office, Headspace, etc), but you get a trial to determine your true level of subscription before paying for the first time.

In CPG, there is a similar path of finding your subscribers and giving the best opportunity for trial. The best subscribers come from 2 main cohorts:

1. On-site sampling. They joined as a subscriber because they sampled the product before they subscribed. Even if you're not selling a subscription, your customers that come from sampling or browsing a retail environment end up being your highest LTV customers.
2. A proper customer journey. A new customer came in through a trial of multiple options, equivalent to a variety pack or a sampler pack, and then made one more purchase to narrow their flavor/type/scent before choosing what to subscribe to.

Having a product page or website that locks you into a subscription will always backfire unless you truly have a great product and/or a good set of perks for your subscribers to engage with. This goes back to the concept of making sure that, as a business, you put yourself in the customers’ shoes, not just the CFOs.

What was the most interesting nugget for you from this? Next weekend I'll focus on all the metrics and technology behind a good subscription program. What you like from both is how I'll build my subscription summit presentation, so I appreciate the 30 seconds you spend responding :)  

On to some fun stuff...

Software/App of the Week:

ShipBob — An end-to-end fulfillment provider for DTC brands

Sharma Brands and ShipBob teamed up to create a free holiday logistics guide called "9 Ways to Not Mess Up Your Holiday Logistics". 

In this guide to preparing your logistics operations for a seamless Q4, you'll learn:

How to keep up with unprecedented volume in a short time span
Shipping and fulfillment best practices
What customers expect (that you can implement) – from free returns and fast shipping to share-worthy unboxing moments

Get the free guide by clicking here to download, today!

Brand of the Week:

Eight Sleep — The Tesla of sleep that you need

I mentioned Eight Sleep in my newsletter a while back, but I just appreciate this product so much, it deserves another mention just in case you needed the extra push to give yourself a better sleep.

The way I view sleep — if you get a night of great sleep, you function at a much higher capacity than if you got a poor sleep and you need endless amounts of caffeine to wake up and work. Investing in a Pod Pro, or a Pod Pro Cover ends up being $4.24 a day (over 24 months), which is cheaper than your favorite Starbucks drink, anyway.

With Eight Sleep, the bed cools for you to naturally fall asleep, warms to match your internal body temperature so you get into the deepest sleep for as long as possible, and then slowly warms you up to naturally wake up the body. I and many Eight Sleep customers don't use alarms anymore.

Invest in better sleep — there's nothing better than waking up rested and ready to attack the day. Shop Eight Sleep here!

That's all for this week!

P.S. Did you listen to the Kanye and Drake albums? Which one did you like better? Get those 9 hours of sleep tonight and have a great week! Thank you for reading this and making it this far :) 

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