Starting a business is seldom the straight, flat road that we want it to be. More often than not, it’s going to be filled with bumps – but that doesn’t mean you can’t overcome them.
Here are some common obstacles you may run into and how to solve them to ensure that your business stays on track.
Hurdle 1: Procurement
Procurement encompasses sourcing, purchasing, and shipping/fulfilling products that are featured by your subscription service. For most curated boxes, procurement is the special sauce that drives customer experience, retention, and growth.
Elements such as customer relationship management (CRM), keeping track of products you like, and actually buying them can often get frustrating, but here’s what you can do:
Invest in good CRM software: It will help you keep track of all the different sellers you source from.
Keep a business invitation on hand: A business invitation is a document that explains what your business does, its mission, and your value proposition to vendors.
Want to read more on procurement? Check out this post, which dives into the issues of procurement in-depth and gives his solutions!
What if your vendor fails to deliver?
Another issue you may face with procurement is finding a quick solution when a vendor falls through.
Have a plan B: If your first-choice vendor is unable to supply or follow through with a sale, it is always useful to have a list of “plan B” vendors that you can go to in an emergency who will be able to help you deliver your box on time.
We hope it doesn’t come to this, but oftentimes if you have a contract with your vendor and you’re forced to cover their mistake, you may be entitled to collect damages.
Be honest with your subscribers and provide value: Tell your customers that the product you wanted won’t be available or that their shipment will be delayed.
Give them the most of what you can and give them extra the next time around to let them know you value the relationship which builds trust. After all, a trusting customer is a loyal customer.
Hurdle 2: Fraud
Fraud is extremely rare, but is a risk of any e-commerce operation. As such, Cratejoy automatically sends an email notification when we detect that a transaction could be fraudulent.
If you think you may have fraudulent orders, here is some advice straight from our customer support team:
Do not fulfill the order: If you are confident that our fraud alert is accurate, you can cancel the shipment(s) and the subscription and proceed to issue a refund.
Contact the subscriber: Most fraud orders will not bother to respond to an email inquiry, so many sellers will send an email before fulfilling any orders. If you don’t get a response, it’s likely the order is fraud.
Check with your payment processor: See what kind of anti-fraud solutions they offer.
Hurdle 3: Churn
Preventing customers from churning is the most common bump faced by subscription box entrepreneurs. Luckily, you can gain valuable insight into why your subscribers are churning by simply asking them – this way you can tackle your issues head-on.
For more on churn, check out our free ebook on reducing churn here! In the ebook, we cover the following 4 strategies to reduce churn:
- Analyzing/understanding your customer’s journey
- Customer service optimization
- Product development/optimization
- Keeping subscribers engaged
Hurdle 4: Growth
Growing your subscription box can be stressful, but it is a manageable task if you tackle the issue from the ground up. Here are a few steps to get your subscriber count growing again:
Start by visualizing your business with a SWOT analysis. Don’t worry, nobody will break down your door – this stands for Strengths, Weaknesses, Opportunities, and Threats. What are you doing well and what can you improve on?
Next, redefine your target market. Has this changed since you launched? Who are your ideal consumers?
Plan out how to reach your redefined market. What are their needs? How can you meet those needs with your subscription box? How will you reach them? Facebook? Instagram? Print?
Research! Understand the competition and learn from their shortcomings and successes.
Get feedback! How is your redesigned strategy received?
Hurdle 5: Profitability
If you’re not turning a profit at the beginning stages of your subscription box’s life, DON’T WORRY. This is normal.
As you learn more about your customers, figure out growth, and slow your churn, profitability will likely follow. However, If you’re still facing a problem, your price point may need to be adjusted.
Price is a very delicate change as it has a huge effect on your value proposition, so tackle this only if you have to. Your box’s price should reflect the value you provide, not the costs you incur.
Matching your value and price is crucial to keep your subscribers satisfied. Read more about how to price your box to reflect value here.
Here’s What You Can Do To Start…
Identify: The first step to solving problems is to figure out what problems you have to begin with.
Prioritize: Once you discover what problems you face, rank them based on how much impact they have on your business.
Execute: Tackle the items at the top of your list first. Seeing improvement at the beginning will motivate you to keep going!
