Gone are the days of one size fits all subscription models. With 66%+ of consumers expecting brands to understand their unique needs and expectations, and 52% expecting all offers to be personalized. Beauty brands are uniquely qualified to embrace hyper-personalized subscription programs because of the routine nature of their products, community-lead marketing strategies and track record of brand affinity. Meet Smartrr, the leading next generation subscription app empowering brands in the beauty category and beyond to create tailored subscription programs with flexible management options that make subscribers feel more like the VIP members that they are.
Smartrr’s journey to reimagine subscriptions, and ultimately customer lifetime value, for online brands, began during the height of COVID. Almost immediately into their product research interviews with over 100 brands across multiple verticals, the team recognized the overwhelming frequency of founders mentioning their struggle with managing subscriptions and memberships. These interviews, coupled with extensive market research, revealed that subscriptions are a major pain point for brands in every DTC industry. It was at this moment that Smartrr was born.
Since then, Smartrr has raised over $7 million in seed funding, has 30 employees and growing, launched publicly on the Shopify app store in May 2022, and serves hundreds of high-growth brands that are reporting impressive stats – such as 2X subscription revenue in 60 days – when utilizing Smartrr.
Meet Gabriella Tegen of Smartrr, the Shopify App Raising the Bar on the Subscription Experience
“From our unique vantage point, we are entirely raising the bar on what it means to be a subscriber of a brand. What was once status quo and standard, Smartrr has evolved into a comprehensive, end-to-end, post-sale experience. We are the only Shopify app that offers subscriptions, rewards, loyalty, and referrals, all in one cohesive platform, making subscribers feel more like valued members.” Founder & CEO of Smartrr.
Smartrr makes it easy for brands to create custom subscription programs that are tailored to customer behavior trends and the products they offer. Subscriptions are a particularly valuable tactic for acquiring and retaining customers in the beauty category because brands are able to offer products that are suitable for regular use. More than that, brands have the opportunity to become a part of the consumer’s beauty routine. When customers have complete control over their subscription preferences, their subscription experience becomes more like a membership where they can receive products as needed and try additional products as they desire. Smartrr’s subscriptions go the extra mile by offering features such as gifting, referrals and loyalty rewards, making subscribers feel like VIPs.
When did you first become interested in eCommerce and retail technology, specifically in subscription-based models?
In a previous role, I had the opportunity to focus on experiential retail as an area of expertise. I saw things from the perspective of brick and mortar retailers, and I was fascinated by how quickly eCommerce was affecting traditional retail. I started to pick up on this shift happening where online retailers, such as Bonobos, Warby Parker, Allbirds, began opening physical stores, an entirely new concept at the time. This piqued my interest and indicated there was a significant change coming to retail as a whole. Then COVID happened, and all retailers focused much of their efforts on driving online sales. This new era of retail led to my interest in subscription models. With much of the industry focused on driving eCommerce sales, I noticed a gap in subscription technology that met both the retailers technical needs, and delighted the consumer with autonomy, user friendliness and of course, the rewards for being a loyal customer.
What product categories or industries are finding success with Smartrr on Shopify?
“We built Smartrr to be vertically and size agnostic. Brands who see the most success with Smartrr are those who value subscribers beyond the recurring revenue aspect. These are brands who deeply care about their consumer experience as a whole, especially the post-sale one. Ultimately, these brands understand the role that subscriptions can play in the long term relationship they have with their consumers and want to go above and beyond to delight their customers and meet their needs.
Brands that switch to Smartrr from other Shopify subscription apps have seen subscription revenue increase by an average of 318% in their first 90 days. These metrics, along with others we’ve gathered, demonstrate the validity of our methodology of putting consumer behavior at the forefront of what we build. We are so proud of the impact Smartrr has had on our brands, both from an ROI standpoint but also in the value they are now able to offer their most loyal customers.”
Why are subscription-based models a sustainable business model for e-commerce and DTC brands?
We see brands flocking to subscriptions as a lever for predictive revenue. And while there are obvious benefits to predictable revenue, at the end of the day, subscriptions with high churn are not the type of predictive revenue you want for your business.
When executed properly, subscription models are extremely beneficial because they offer brands a way to cultivate deeper customer relationships, and engage on a more personal level. In that regard, subscribers are a brand’s most loyal customers and when treated as such can single handedly improve churn metrics, shipping costs, customer support costs and customer acquisition costs. Smartrr is the only subscription app to optimize for LTV with unique capabilities to gift next subscription order, reward customers with loyalty credits, tier discounts after x order, offer exclusive member only products and the results speak for themselves. Again, brands who switch to Smartrr are seeing on average 318% increase in subscription revenue in their first quarter.
Smartrr has also attracted many influencers to create subscription-based businesses, why is this?
From Youtube ‘unboxing’ videos, TikTok reviews, to Instagram tags, creators and influencers are the driving force behind the online communities we subscribe to in our day to day. Through these channels, creators and influencers are creating community-led experiences for brands and Smartrr believes this is just the beginning for the influencer economy. Introducing curated subscription programs to an already engaged community is one powerful combination. The chances of a brand acquiring a new customer because an influencer recommended a product are high but then what?! Subscriptions are a great way to keep that customer engaged to the point where they themselves become a person of influence through gifting and referral channels.
As you mentioned, subscriptions traditionally increase recurring revenue. What are three other metrics that can also help a business’s bottom line?
The first metric, albeit less quantifiable, but we hear all the time is that customer support teams are bogged down with requests to help customers manage subscription preferences. When brands switch to Smartrr, they see upwards of a major decrease in customer support tickets. This is largely credited to Smartrr’s intuitive and completely white-labled customer account portal. Offering a consumer-friendly user interface, customers can confidently manage their subscriptions the way they see fit.
The second metric that comes to mind is, AOV (average-order-value). Subscribers are your most loyal and most engaged customers. Each upcoming subscription order brings a new opportunity to offer one-time add ons, exclusive products, additional products, and new product releases. We’ve seen subscribers try a product as a one-time add on and love it so much that we tack it onto their overarching subscription order month over month, significantly increasing the average order value. Additionally, many of our brands have implemented custom bundles or build-a-box features that encourage customers to buy more than one product at a time. Those brands see the biggest increase in AOV.
The third one and arguably the most important business metrics that subscriptions can impact is LTV (lifetime-value).With acquisition costs up nearly 60%, brands will always want to consider the payback period. Offering a highly curated subscription experience is the number one way to decrease your church rate. Incentives such as loyalty rewards, members only products and discounts are all great tactics to keep subscribers engaged over longer periods of time. Additionally, features such as gifting, referrals and bundles will increase your LTV seamingly overnight if your subscriber base can acquire new customers for you.
When should a brand or retailer invest in a customized subscription-based model?
If you have customers who already subscribe to your brand or show a pattern of repeat purchase you should 100% consider customizing your subscription program. Those subscribers are easily your most loyal and valuable customers. Lean in on them to strengthen your business as a whole. We’ve been watching acquisition costs rise for the last few years now. Relying on ads is not going to be a sustainable practice much longer. Instead, grow from your loyal customer base outwards. Engage subscribers by adding levers of flexibility to your customer account portal so it feels more like a VIP membership experience. When a subscriber goes into their account portal to skip their next order because they have too much product, give them the option to gift that order to a friend instead! Give them a reason to stay and engage with exclusive products, discounts and/or loyalty points. This will increase your AOV in the short term and LTV in the long term because.
What are the main challenges for subscription models you see today?
Some of the main challenges client’s come to us with are around the need for custom development to build their ideal subscription program. That can be costly and time consuming. We made sure to solve for that with our advanced out of the box subscription models. Merchants can easily set up their prefered subscription model in minutes.
Another major hurdle we often see is around customer experience. Traditionally, consumers struggled to manage their subscription preferences because brands would hide the cancel button or not offer options like ‘send now’. However, brands who switch to Smartrr see upwards of a 70% decrease in customer support tickets because their customer account portal is more intuitive and gives total autonomy to the end customer.
What subscription models have you seen clients/users see success?
Increasingly, brands using Smartrr are leveraging features beyond our core subscription functionality to see the power of our more advanced subscription offerings. Three of the most common examples are sequential subscriptions, finite subscriptions, and our add-on capabilities.
First, sequential subscriptions. One brand that comes to mind is Jolie, a showerhead with a replenishable filter. What we refer to as a ‘sequential’ subscription model, in their case, is where you purchase the showerhead which then triggers a filter to be sent every 90 days. They have one of the lowest churn rates of the companies we work with, partially because of how intentional they are with their GTM strategy, but largely in part with how strategically they’ve outlined their customer journey and need for replenishment.”
Second, let’s take a stab at finite subscriptions. Scott’s Flowers comes to mind; having taken advantage of this feature, in which they offer three or six month giftable subscriptions. On the last month of the gifted subscription, the recipient would then have the option to opt in to a subscription of their own! This is such an underrated subscription model to flip your marketing funnel and one that most brands can easily implement especially before the holidays.”
Lastly, add-ons can be an incredibly powerful tool in providing consumers a complete experience of all the products a brand may offer (not all of which are replenishable), as well as to expose your subscribers to newly released products, even early drops. For example, one of our brands, ManiMe, recently launched their “Personalized Mani Box,” on a monthly subscription. ManiMe however, offers a large assortment of additional products, including nail care accessories, limited time releases, and more. The ability to subscribe but then add-on items as needed to your upcoming order provides a huge service to your consumers, increases the overall reach a product has, and gives brands the opportunity to improve AOV.
How can a brand or retailer sign up and get started with Smartrr?
I have over 10 years of experience in the retail industry including expertise in marketing, operations, merchandising, buying, shopping and technology. I am a former senior managing director of The School of Retailing, University of Alberta. My education includes a Bachelor of Commerce Degree from The University of Alberta in Marketing, Certificate in Real Estate and a Diploma in Fashion Merchandising and Buying from LasSalle College, a Canadian private school founded in 1959 by fashion designer Jean-Paul Morin.