Boosting Sales with Subscription Models for Water Filter Replacement
Zeynep Avan
Many people in the US use water filters to get clean water in their homes. However, water filters are only effective within a certain period. So, there is a natural demand for periodic water filter replacement services.
If you deliver such services, you should check out the subscription model. In this post, you’ll learn how this can affect your bottom line.
The Benefits of Subscription Models
The subscription model involves getting customers to sign up for an automatic recurrent payment for your services. For example, if replacing a filter costs $90, the subscription model will require your customer to provide relevant account details for automatic deductions of $90 when it’s time for a new filter.
See the benefits of subscription models below.
Predictable Revenue Streams
Adopting the subscription model for water filter replacement will help you predict cash flow. Let’s see a practical example.
Suppose you have 10 people subscribed to your water filter replacement plan at $100 for each replacement, with a 6-month effective filter. Annually, you can predict revenue of $2000 from these 10 customers.
A perk of being able to predict revenue is that it helps you plan inventory and make other financial decisions for your company. It also makes your business more attractive to investors.
Improved Customer Retention
When customers sign up for your water filter subscription plan, you’re bound to always keep in contact with them. Whether it’s to send them reminders of their upcoming payment, issue a receipt, or even provide promotional/educational content, you’ll always communicate with your customers.
This communication helps you build a relationship with your customers, which is a precedent of customer loyalty and retention.
Additionally, subscriptions are often cheaper than one-offs. If a one-off water filter replacement costs $100, you might decide to offer $10 off for subscribers. This translates to cost savings for the customer. Of course, people would rather do business where they can save money.
Customers will also stick with you because you take away the pains of having to remember an important detail — replacing their water filters for cleaner water. It signals that you’re reliable and trustworthy. So, they can go about doing other things.
Increased Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is a metric that tells the revenue coming from a single customer throughout their relationship with your business. Let’s see an example of how a water filter replacement company may look at CLV.
Again, let’s assume that you offer water filter replacement services at $100 for filters best used for six months. From previous data, you may be able to tell that a regular customer spends $200 a year over a five-year relationship.
You get your CLV by multiplying the average duration a client will stay with you by the amount they spend per replacement and the frequency of replacements in a year, which equals $10,000 in this example.
Knowing that figure helps you make important decisions for your company. You’ll know how much to spend on customer acquisition, and make informed decisions about running costs.
When your customers are signed into a subscription model, the CLV will increase because subscribers can stay with you longer than one-off customers. Different factors play a role in the CLV, including your customer service and overall customer satisfaction.
Key Components of a Successful Subscription Model
Knowing the benefits of a water filter replacement subscription model, let’s see what comprises a successful subscription plan.
1. Flexible Subscription Plans
A key feature of a successful subscription model is flexibility in the payment plans for different customers. Firstly, other than offering a subscription plan, give an option for a one-off purchase.
Now within the subscription model, offer different packages to give customers options. For example, you can offer customers the option of automatic recurring payments, or bundles (usually cheaper). You may also allow customers to pay for filter replacement in installments.
Giving customers options to choose the payment plan that suits them positions your business as customer-centric, giving you an edge over competitors.
2. Easy Management and Cancellation
A subscription model is not a forced plan. Customers should have the option to leave at will. The subscription management should be able to accommodate delay in filter replacement, a pause in order, or even skip a replacement entirely.
Give room to shift the replacement date or change the subscription frequency. This is crucial to give customers control and improve their satisfaction.
3. Discounts and Incentives
Lastly, a successful subscription model rewards loyalty through discounts and incentives. Firstly, subscribers should pay less than one-off customers. This can incentivize people to subscribe to your water filter replacement subscription plan.
Also, your subscription model should encourage customers to remain subscribed by giving periodic discounts for extra savings.
Technical Implementation of Subscription Models on Shopify
It’s action time! We’ll now discuss how to choose the right subscription app for your Shopify website and integrate your subscription model with inventory management.
Choosing the Right Subscription App
The success of your water filter replacement subscription model lies partly in the subscription app you choose to use for your Shopify website.
There are various subscription apps for Shopify, but some of the most popular ones are Recharge and Bold Subscriptions.
1. Recharge Subscriptions
Recharge subscriptions have several features that make them stand out. For example, there’s a feature called Build-a-box that allows customers to select how many years in advance they’d like to pay for water filter replacement.
Recharge gives you customization options to give your brand a cohesive look. Another perk is the subscription management it offers. Customers can pause or skip a water filter replacement from their dedicated portal.
It also offers insights into the performance of your discounts for both one-off customers and subscribers. Having this information will help guide your offerings.
2. Bold Subscriptions
Bold subscriptions offer different features to simplify your subscription model. Customers can easily skip, pause, and reschedule their water filter replacement appointment. They also provide comprehensive analytics that covers relevant data including active and inactive subscriptions, as well as forecasting.
Bold subscriptions is also fully customizable. This means you can vary it to match your brand’s look for a more cohesive user experience on your site.
Integrating with Inventory Management
There are dedicated inventory management apps for Shopify like Zoho and Stocky. They help you keep a close eye on your water filter inventory to ensure consistent stock levels.
You must use a subscription app that integrates seamlessly with the inventory management app of your choice for accurate stock management.
Both apps will work in sync analyzing your subscription data to forecast demand accurately and send timely notifications when inventory levels drop. This will give you ample time to replenish stock to ensure sufficient filters are available to fulfill upcoming subscription orders.
Marketing Your Subscription Model
After setting up your subscription model, the next step is to market it. Here’s how you can achieve this:
Creating Awareness
Prominently display your subscription model on your website. Make it glaring for customers to see your offerings. You can also use social media to create awareness about your water filter replacement subscription plans.
Highlighting Benefits to Customers
In creating awareness about your subscription model, highlight the benefits to customers. The benefits can be cost savings, timely filter replacement, or even something entirely different that helps your target audience. See what Wisewell offers.
Beat your competitors by standing out with your benefits.
Using Customer Testimonials
Including customer testimonials of how effective your subscription model is helps communicate trust to prospective subscribers and encourage them to subscribe.
As someone new to the subscription model, you may wonder how to get reviews like the one in the image since you’ve never had a subscriber. This is where old clients come in. If you can persuade some of your loyal customers to become subscribers, they can provide reviews or testimonials for you to display on your website.
2 Real-World Examples
Lifestraw and Homewater are examples of water filter replacement companies using the subscription model to push sales.
Lifestraw advertises the benefits of subscribing to their water filter replacement plan and has several reviews testifying to that.
Their plan also allows customers to cancel anytime or modify their subscriptions to fit their current situation. Customers can customize their subscriptions and pay upfront for their chosen number of filters. Lifestraw uses the Recharge subscription app to provide its subscription model.
Homewater clearly shows customers who visit their website that they’ll save more when they subscribe to their filter replacement subscription model.
Customers get to decide the number of filter replacements they want to pay for and also choose the frequency of delivery. They have a dedicated review page where customers spoke highly about their products and subscription model.
How Juphy AI Can Support Your Subscription Model
Juphy AI is your AI-powered agent that can help streamline your business operations and optimize processes. See how ‘Built for Shopify’ certified Juphy AI can make your water filter replacement subscription model a breeze.
Personalized Customer Support
Powered by the latest ChatGPT-4 technology, Juphy can communicate with your customers providing support to them and answering any question they have about your subscription model. Juphy’s AI Agent doesn’t give robotic replies. It acknowledges your customers’ unique needs and responds to them in a human-like manner to customers.
Personalized Subscription Recommendations
Different subscription plans work for different people. Juphy can analyze existing customer data to provide personalized recommendations for each customer. These recommendations take away the mental stress of choosing a plan and help customers make decisions faster.
Seamless Customer Support
Juphy’s AI Agent doesn’t sleep—unlike human support agents. It’s available 24/7 to provide customer support to your customers at any time of the day. So, if a customer wants information about your subscription plan outside working hours, Juphy is ready to provide up-to-date responses promptly.
Handling Complex Queries with Ease
Are you worried that customers might be asking difficult questions that require a live agent? Rest easy, Juphy can take care of it. It leverages modern technology to understand complex queries and provide responses that are easy to understand and follow. In cases where human input is required, it seamlessly routes the conversation to a human agent followed by suggestions and recommendations for the specific customers’ request.
Boosting Customer Engagement
The Juphy-Shopify integration leads to higher customer engagement and conversion rates. Juphy doesn’t have one single, monotonous response for particular queries. It “listens” to each customer and responds accordingly.
It makes interactions easier because people from the other end will feel like they’re talking to a live agent and not a bot. So, customers ask questions and interact freely, get the information they need, click the subscribe button, and become happy customers.
Reducing Churn Rates
Juphy is there when you can’t be there. It takes the initiative to address customer concerns and provide timely reports. This improves customer retention and reduces the likelihood of subscription cancellations.
Conclusion
The subscription model is a business model that water filter replacement companies can adopt to boost customer retention, improve their customer lifetime value, forecast revenue, and make informed decisions.
Juphy’s AI Agent can further help by offering personalized and timely support to ensure that customers are well-informed about the subscription plans available. It also provides a gentle nudge for them to subscribe. Enjoy a free trial when you sign up on Juphy. Try it now!
Key Takeaways
- The subscription model for water filter replacement involves providing periodic water filter replacement for a recurring fee that’s automatically deducted from the customer’s account.
- With a subscription model, you will improve customer retention, increase customer lifetime value, and have recurring revenue streams.
- A successful water filter replacement subscription model offers flexible subscription plans, easy management and cancellation, as well as discounts and incentives.
- After choosing the right subscription app for your Shopify store and integrating it with inventory management, you must create awareness about it and highlight the benefits of the model to customers. Customer testimonials are also effective in marketing your subscription model.
- Juphy is the AI-powered agent that provides personalized real-time support and recommendations to your customers to help you focus on boosting your bottom line.
