Direct to Consumer – Home Delivery Channel – all the rage!
“Can you grab me a package of diapers in the pantry?” If you are like most American consumers, these words have most of us experiencing dread and breaking into a cold sweat. We already know there are not any diapers in that closet. In fact, we are running low on paper towels, toilet tissue, soap, and a wide variety of additional consumable products. What to do? Yelling up the stairs, we say, “I’m jumping in the car and going to the supermarket or wholesale club to pick them up right now.” Is there any greater torture than visiting the local “big box store” and waiting for the cashier to move you through the line with your carriage full of diapers, paper towels, and bottled water, and on a Saturday morning?
The “retail experience” is no longer the enjoyable experience these establishments once claimed. American Consumers are starting to wake up. While Amazon has become a household name in home delivery of all sorts of products, there is still a huge opportunity for marketers to package and market their products and services on a recurring subscription basis to the consumer. The consumer market is ready to be sold on this concept. The challenge for marketers is to craft a product and marketing strategy that truly engages with consumers and provides them a “solution” to their need. Here are Five Tips on crafting a strategy and execution that can help you tap into this burgeoning channel and method of serving customers and building loyalty.
- Does Your Customer Need You? When you think about your product/ service offering is there a reason why your customers would benefit from a program that would provide them the product and/or service on a recurring basis? Take the Nestle Company as an example. Consumers purchase bottle water by the case load. Over time, the water is consumed and then we all need to go to back to our favorite shopping venue and lug it home. Their Poland Spring division has offered home water delivery on a subscription basis for quite some time now and they now see an expansion opportunity of more consumable products delivered into the home with their recent investment in Freshly.com – Freshly customers are being afforded the opportunity to have “chef-cooked healthy meals delivered” on a subscription basis for a low cost. If you are marketing a product that is in any way consumed over time….Your customers will most likely opt to engage with you and make the process easier to acquire your service on a regular and timely basis.
- Have You Done Your Homework? You must become a student of your competitive marketplace. Your next step in the process of building out this strategy is to understand who you will be competing with in this “subscription arena” – Do exhaustive diligence so that you can understand the competitors, their offers and how they have chosen to market their offering. As an example: Amora Coffee – a Fosina founded coffee subscription company. We did our due diligence and conducted extensive research of the coffee business and found that fresh roasted coffee, delivered to the home is not easily or readably available. Amora’s value proposition is freshness – great origins and blends, roasted in small daily batches and shipped via 2-day priority mail. The subscription process delivers coffee that was roasted just a few days ago vs. coffee that was roasted many, many months ago. My point is you will only win if you clearly understand how to construct a compelling value proposition, package and offering that is unique in your competitive space. If you find that none of your competitors has ventured into this arena…Don’t take a day off until you and your organization have built what you need to be a first mover in the market place. As soon as you launch….be mindful that your competitors (if they are smart) will be tracking YOU. As you move forward…be ever vigilant to the rear view mirror to insure that they aren’t catching up with you.
- Are You Ready? Ecommerce is table stakes for any marketer today. You drive customer/prospect traffic to your home page and hopefully with an optimized navigation path…you guide your customer to finding the product/service that they need and place them seamlessly within your purchasing channel. You will need to “pivot” your organization slightly to deal with the issues of delivering your products and services according to your consumer’s preferences and schedules. This will take an adjustment to your commerce strategy and web/online interface. You will need to work with your fulfillment infrastructure to insure that you can pick, pack, ship and charge a credit card on a subscription basis. At Fosina, we manage the back end of several very large demand creation subscription businesses. We can help you analyze your current infrastructure and design a road map to making the adjustments and investments in your back end to optimize this market opportunity.
- Do You See a Future in Engagement? One of the greatest failings that most legacy subscription businesses experience is that they believe the moment the customer signs and takes their first shipment…they have won a new customer. In fact within the magazine publishing business this has been a tragic mistake. I sign up for 26 weeks of my favorite magazine and most times, I don’t get a thank you note. Throughout my 26 weeks, I hear nothing from the publisher. Six weeks prior to renewal…the circulation department wakes up and says…Hey Jim…we want you to renew! Renew? I hardly Know You. From the moment that a customer (a great customer who has signed up for a recurring and predictable relationship) signs on, the relationship begins. Make sure that you have a regular meaningful dialogue with your customers – leveraging email to build the continuity of the partnership. Every message need not be “offer based” – You have much to explain about the quality of your service and products. Customers never grow tired of being thanked and appreciated. All of this communication builds greater loyalty and the evangelization of your brand.
- Are You Asking Enough Questions? In any relationship between two people and/or a company and its customers, it makes all kind of sense in deepening the relationship to learn more by asking questions. One of my favorite is “How else can we help you?” If you aren’t routinely probing your customers and understanding their needs, you won’t come up with the next great extension of your business line. It’s likely that your customers know more about what they need versus you and your company. Don’t be afraid to ask. When your best “subscription customers” tell you their thoughts on how to improve and/or expand your offering; Listen to them. They are showing you the path to a stronger relationship and incremental sales and profits. Don’t become complacent in your relationship. Always remind customers that are interacting with you of how much you appreciate their commitment and feedback.
We continue to live and work within an environment and economy that is changing in real time. If you are truly passionate about succeeding in this arena, you have no time to be lethargic and sluggish in the method and means that you bring product(s) to market. Consumers are voting each day for the best partnership that can save them time, hassle and money. Your ability to tap into this need by constructing a program that has its DNA in auto replenishment and fulfillment is mission critical to expanding your revenue and profits.
As with all change, if you need help and/or support in launching these efforts there are technology and service companies in the market that are ready to assist…including your friends at Fosina Marketing Group. Drop me a line at Jfosina@fosinamarketing.com if you would like to discuss more.