How to create recurring revenue with subscriptions

Boutique candle business owner Tegan Brennan on why she introduced a subscription model for customers, and how it’s created a source of recurring revenue.

At a glance

Here’s a snapshot of the insights from our small business interviewee:

  • Candle business co-owner Tegan introduced subscriptions on candle refills due to customer demand.
  • Subscriptions have proved even more fruitful for the business than social media marketing.
  • Don’t create a subscription for all your products – instead, focus on your best-sellers.
  • If your customers are asking for something, consider it – or you could miss out on business.

By turning one-off customers into long-term subscribers, small business owners can create multiple sources of recurring revenue, often with less effort and investment than it would take to achieve those repeat sales on an ongoing basis.

Boutique candle maker Stump & Co introduced subscriptions on certain products in late 2021 and it’s since become a highly profitable endeavour. Stump & Co started off small – with co-owners Tegan and Luke selling wooden candle holders which they first designed for their wedding – but quickly expanded as demand for their hand-made candles and candle products grew.

We spoke with Tegan about how customers have enthusiastically responded to the idea, how the business adapts to challenges that arise and the direct benefits of the subscription model on Stump & Co’s cash flow.

Why did you first introduce subscriptions?

The few customers we had when we started the business kept asking for refill candles. Refills have become quite popular now, but at the time there wasn’t an economical way for customers to return the jars and get them refilled. So we came up with the concept of wax refills. Customers could order and have them delivered straight to their houses instead of needing to return anything. That’s how subscriptions came along.

We get a lot of positive feedback from customers who use our product regularly and can avoid the pain of reordering. Customers are able to put their subscriptions on hold when they go on holidays and restart them when they come back, which is a nice bonus.

Stump + CoHow have subscriptions benefited your business?

They’ve made such a big impact, and I wouldn’t take them away now. It’s all been organic growth – customers keep signing up. Next year, we plan to get behind them a bit more.

It’s especially good for us because we don’t need to pay for Facebook ads or marketing via email or social media to attract those customers, because they willingly sign up and purchase from us each month. Think of all the effort that goes into posting daily on Instagram or the money that goes into Facebook ads – this is a much easier route to take.

There’s no reason you shouldn’t ask your customers to be customers on a regular basis, especially if you provide a good service.

What challenges have you faced?

Subscriptions were difficult to put into place at the start, because we had to find a plugin to use.

Not everyone wants the same product each month, and we’re still trying to find a plugin that will support customers being able to choose which one they want. It’s the same as when you order food via subscription – you want to be able to change that every now and again. That’s our biggest challenge.

As a workaround, we communicate directly with customers. I have an automated email set up that asks them what they want to be sent each month. This is another point of contact and a way to build up the relationship.

How important is listening to customer feedback?

We always listen to our customers. If someone’s taking the time to reach out and give you feedback, our guess is there’s at least 10 others thinking the same thing. Before we started selling refills about three years ago, we said, “Oh, no, that’s too hard.” But now, they’re our biggest selling product.

It can change your business to listen to those who have taken the time to purchase from you and provide feedback.

What are your biggest takeaways from the experience?

Don’t create a subscription for all of your products. Start with your top sellers. Put yourself in your customers’ shoes by considering how regularly you would want the product sent to you.

A subscription isn’t something you can just throw money into creating – that’s not sustainable. It should always come from what the customer actually wants from your business and your products.

Most importantly, use customer feedback to tailor your offering.

Need flexible access to funds that could help your business grow? Speak with one of our small business lending specialists.

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