4 Key Mistakes to Avoid When Creating a Subscription-Based Business


You aren’t alone if you’ve noticed the success of subscription businesses on the internet. People are entering the space in every industry you can think of. This trend led the revenue for subscription businesses to grow to $2.6 billion in 2016.

If you’ve never run a subscription-based business before, you have a lot to learn. Keep reading to learn four common mistakes you need to avoid when starting your new business.

  1. Not Doing Enough Research

It’s easy to dive right into a project as soon as you can. Doing this is a mistake, though.

Make sure you do enough market research to verify the validity of your idea. The last thing you want is to do all the work to launch your subscription business and have no demand for your products.

  1. Only Pricing Based On Your Cost

Things are priced differently with subscription services. It’s hard to find a successful company that charges its customers based on their cost to buy a product.

Doing your pricing this way is a quick way to put yourself out of business. It costs more for you to acquire customers and create their boxes for them. Your customers are willing to pay more for this type of service.

Check your competitors to see how they handle pricing. You can base your pricing model on their boxes if you don’t know where to start.

  1. Providing a Poor Customer Experience

You can’t get away with providing poor customer service in business today. There are plenty of ways for your customers to talk about the service they receive online. If you do poorly, you’re going to get negative reviews.

Go through your entire customer experience from start to finish to look for problems. If you can give excellent service to your customers, they are going to be more likely to stay and leave positive reviews online.

  1. Not Tracking Metrics

It’s hard to run a successful business in today’s world if you don’t have data to inform your decisions. The good news is that you have all the information you can handle with a subscription business.

If you’re trying to improve your business and learn how to reduce churn, make sure you keep track of the data for all your customers. You want to learn why people sign up, how long they are customers, and when they leave.

If you can catch people when they are likely to leave and figure out why they cancel their service, then you’ll be able to keep more of your customers.

Don’t Start Your Subscription-Based Business the Wrong Way

The overwhelming success of all the subscription box services over the past several years has led a lot of business owners to the wrong conclusion. You can’t just start a subscription-based business and have it be successful from the start. Make sure to avoid the mistakes above so you can maximize the chance that your service will be a success.

If you have your company started, it’s time to start getting new customers. Head back to our blog to learn the advertising strategies you need to try.


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