Mastering the Art of Subscription Commerce with Matthew Holman | Matthew Holman

Matt Edmundson [0:05 - 1:39]: Welcome to the E Commerce podcast with me, your host, Matt Edmundson. This is a podcast all about helping you deliver e commerce. Wow. And to help us do that, I'm chatting with Matthew Holman from Subscription Doc about all things subscription commerce. Yes, we are. We're going to get into that, but before we do, let me welcome you to the show. If it's your first time with us, very warm welcome to you. And if you haven't done already, just hit that little subscribe button or follow button if you're following along on YouTube. I've always said actually that about 99.5% of the people listening to the show listen on the audio version. But it seems that a few of you have joined us on YouTube, which is great. So we are looking to grow that channel. If you haven't done so already, come follow us over on YouTube because then get see us in person, which you know is a beautiful thing. Chaps on your screen. Come join us online. Just follow the links@e commercepodcast.net you'll find everything. Come join us, it'll be great to see. Right, let's talk about Matthew Holman, aka the subscription doc, who helps D2C brands master their subscription game. As the founder of a consultancy and media company, he's a master at turning content into business growth, whether it's boosting retention or improving acquisition. He is the go to expert for all things subscriptions. Yes, he is. Matthew, welcome to the show. Great to have you on, man. How are we doing?

Matthew Holman [1:40 - 1:47]: I'm doing great, man. Thanks for having me on. And really it's easy to be an expert when there really aren't anybody else in the space. So there's nobody else to go to.

Matt Edmundson [1:48 - 1:54]: I love that strategy. Let's find a space where there's nobody. Do you do something there on your quest as an expert?

Matthew Holman [1:54 - 1:56]: Exactly, exactly.

Matt Edmundson [1:57 - 2:21]: That's great. Now before we get started, actually let me give a quick shout out to the guys at Subsummit, which is where we met this year, wasn't it? We met on the. It was on the subly stand. You and I were both on the subscription. No, no, Genius bot stuff. Yeah, yeah, yes. So that's where we met and had a good old chinwag. So finally we've got you on. So yeah, big shout out to Sub Summit. Are you going next year?

Matthew Holman [2:21 - 2:30]: Oh, absolutely, absolutely. I mean this last year was over my birthday and I still went next year. Thankfully they scheduled in May so I won't have to miss. Miss my birthday this time.

Matt Edmundson [2:30 - 2:34]: But yeah, you should I'm glad you had a word with him about that.

Matthew Holman [2:34 - 2:35]: Yeah, exactly.

Matt Edmundson [2:35 - 3:22]: Cool. Chris. Chris. I'm not happy about this. Dude, come on, you need to change. It's funny, I was talking to Christian, if you don't know. Dear listener, Sub Summit is a show all about subscription commerce. I've gone the last couple years. It is a great show to go to in Dallas. Do come join us next year. Just go to subsummit.com find out more information. But Chris George, one of the sort of co founders of it, I was speaking to him on Monday. So three nights ago we had a good old chinwag and a good old ketchup which was great. So yeah, he's looking forward to it this year so. Or next year, should I say? Very good, very good. Well, how did you get into subscription commerce? Was this sort of like a dream from school or was it just something you stumbled into?

Matthew Holman [3:22 - 5:28]: I feel like I get asked that same question by everybody I talk to is like how did you get into subscriptions? Is actually like very, very ind. I was running marketing at a, you know, at a SaaS company that does logistics, shipping stuff for e commerce brands. My now wife started working there. The Boss is the CEO's sister. So we started dating and is to, you know, preserve the potentiality of that relationship and also wanted to kind of like get out of working for somebody else and become an entrepreneur. I jumped at a chance. Somebody just posted on LinkedIn, hey, anybody want to join a. A small e comm SaaS startup as a marketing co founder And I rose, you know, raised my hand and got into subscriptions that way. So I joined a company called Q Pilot and my partner there, David Bradley, very much like a logistics B2B stance on subscriptions. And so with my logistics background, it's kind of like a match made in heaven. So that's how I started. And then you know, the bet did work out because you know, my, my time girlfriend now my wife coming in a little while. So that's all like, you know, fantastic. But yeah, no, we started doing that and then as a SaaS marketer, my whole job was trying to get people to, you know, sign up for Q Pilot. We started a newsletter called it Subscription Prescription. The longer we ran it and working with our own brands, I realized that my real aptitude actually, you know, I'm an okay SaaS marketer, but I'm really good at helping people figure out subscriptions. There's a lot of different layers of complexity. Logistics, operations, marketing, consumer behavior. Just really loved it and so doing that more and more. And then my partner, I have the same partner in this, in the consultancy now as I do at that SaaS company. It's just he focuses primarily on the subscription business and I focus primarily on the consultancy. And we're platform agnostic, so it doesn't matter who you're using. But yeah, that's again, it's just kind of like one of those funny things of, you know, my wife and logistics. And here we are running a subscription business and newsletter and podcast and tons of social media followers and all that stuff.

Matt Edmundson [5:29 - 5:45]: It's funny, isn't it? I mean, the whole social media thing and the content thing becomes something in all of itself, doesn't it? And sort of managing all of that and keeping up to date with all of that, you can have fun with that with a newborn. Tearing around the house, trying to plan.

Matthew Holman [5:46 - 5:50]: As much content, get as much content done as I can this month before my life changes forever.

Matt Edmundson [5:50 - 5:58]: Yeah, yeah. And then all you have to do is put pictures of the kid up for the next six months and everybody will be happy because we've all been real virality.

Matthew Holman [5:58 - 5:59]: Yeah, you're right.

Matt Edmundson [5:59 - 6:03]: They'll all be like, interested in the kid? Not yet. The kid doing. Not yet. I don't care about you.

Matthew Holman [6:04 - 6:05]: Baby's way cuter than you are.

Matt Edmundson [6:09 - 6:24]: So what I mean, you've been doing subscriptions for a while. Let's talk about subscription in terms of e commerce because obviously subscriptions is a wide ranging topic, you know, and I love what Paul Chambers. Have you seen the Paul Chambers video that he put up with the subscription day?

Matthew Holman [6:25 - 6:30]: Oh, no, but I saw it and I want to. I need to go watch it. I did see it.

Matt Edmundson [6:30 - 6:53]: Really funny. Really funny. Put this, this sort of mock video up, I think it was yesterday on LinkedIn about subscription Dane, he, he references in the videos, you know, subscription services like Netflix and Doordash and things like. These are sort of things, but specifically to do with E commerce. What are you seeing at the moment that we should really be thinking about?

Matthew Holman [6:54 - 8:41]: Yeah, I think that's an interesting point. You know, a lot of people do think of subscriptions as like their Costco membership or like their Amazon prime membership. But you know, we're talking about D2C subscriptions. That's generally like a subscription box, right? Like Battlebox or Mindful Souls or, you know, a lot of these different pet boxes. And then there are other products that do well on a subscription. You have devices like say like a dollar shave club. It's selling you a razor and you get the replacement blades as a subscription or supplements and beauty where you're, you know, getting a skincare routine, pet food, things like that. And so what, what I'm seeing happening that's really, really interesting is people trying to come up with, I mean, everybody's trying to figure out how to turn their business into a. Not every, a lot of people trying to figure out how to turn their business into a subscription. Because then I feel like there's recurring revenue, it's more predictable. You can, you can borrow or raise money against those types of things. But that, that kind of business push aside. What I'm seeing is a lot of brands, like experiment with different ways they can make their products more subscription, like, work better for subscriptions. So the device one is really, really interesting. Like if you look at like Pura, they're a home device company, they sell you a device that has scents that you can put in your home. There's a lot of like, integration with that where, you know, you might download a, or buy a beauty care routine that has an app that helps you track those types of things. So there's a lot of different ways that people trying to. But ultimately it is really just coming down to like, okay, how can I get people to find my subscription offer more compelling? Can I use a gift? Can I use a bundle? Can I use some kind of content piece to try to make this more interesting? And that's where I think is really exciting. It's people just experimenting more and more and the technology keeps innovating to try to like, make a lot of those actions easier and easier to do. So everybody doesn't have to custom develop everything to make it happen.

Matt Edmundson [8:42 - 10:11]: Yeah, yeah, it's interesting, isn't it? I mean, the classic example that like you say that I see certainly on E Commerce is if you sell a product like beauty products or a supplement. And I mean, I actually have a supplement company, so it's quite close to home in that sense that I remember the first time we had Chris George on. He's like, why are you not doing subscriptions? That's a very good question, Chris. So we put subscriptions on the site. And to be fair, it wasn't just Chris telling me that we'd been spending some time developing technology to do it because it was a bespoke platform. But our subscriptions are growing very nicely, thank you very much. We will continue to do subscriptions. It's a beautiful thing, but it seems like, you know, you have a product, a repeatable product, therefore you do subscriptions. That makes a bit of sense, but it feels like now I need to start thinking about how to innovate in that area because there seems to be a lot more competition in the subscription space. And I remember Jay Myers saying that, you know, from bulk commerce J. He, he talked about how there was a limit to how many subscriptions people will have at any one point in time. I think he said it was like 16 or 17. So what with that in mind, how can I, and the listeners gigging in, obviously, how can I stay ahead with adding subscriptions to my E commerce site in a world that is becoming more and more competitive?

Matthew Holman [10:12 - 13:26]: Yeah, I think it's great. And you mentioned that. Like, I think, you know, Chris George has talked about that, Jay has talked about that. I think like, recharge is a big movement right now, like the routine economy. Talking about, like trying to make your products part of everybody's day in life. And I think really the trick here is like understanding use cases better than ever before. And so a really simple example I like to use a lot is really around like protein powder, for example. And so protein powder is a universal product. It's sold by thousands of brands all over the world. It's consumed by millions of people every single day. But there's, you know, three main reasons why people take protein powder. And then even within those three, there are sub segments of why people take them. So for example, if I'm going to the gym, I'm working out, I'm trying to get big and strong, I'm taking protein powder to supplement my protein intake to build more muscle. If I'm trying to lose weight, I'm on a diet, I'm trying to like, cut fat or something. I might be taking protein as a meal supplement. I'm adding it to something, or I'm taking a protein shake instead of eating like a, you know, a steak or something like that. And then, you know, endurance athletes often will take protein just to try to maintain a certain level of muscle because they're not like, doing a ton of other things. And within those, you could have people that are, you know, casual, serious, all kinds of stuff. You could have moms, you could have single parents, you could have kids, you could have elderly. Like, you know, the list goes on and on and on. So the trick with, with, I think with subscriptions is really getting a better job of understanding who's buying from you, the reasons they're buying from you. And then you go back and you, and you take that and you iterate that into your copy. You Iterate that into your offer. So a really great again just keeping things as simple as possible to understand is if I know that a lot of people that are buying my protein powder are people that are trying to put on muscle mass, then it makes sense for me as a brand to probably maybe develop like a creatine product to try that I can offer to people because that helps accelerate like you know, the amount of load you can put your weights under or your muscles under to grow more. If I'm the meal, if I'm the meal supplement kind, it makes sense to maybe put like a sugar free like drink mix as an item. I could innovate in that. And then that's also with like copy how we educate people, right? So if I think about too like if I'm going to onboard somebody that is a new subscriber and I and I have them select which use case they are, I could opt them into a klaviyo flow that has like workout tips and like the best times to take the protein powder. But also educating them on why our protein powder is better for muscle gain than say you know, ex competitor or other people, you know, the meal supplement side, it's like hey, we know that shakes get boring. So like here's our topic, our customers top five different ways to utilize a protein shake. So I like that example. I know like I could go on and on and on of that into like copy and ads and all this stuff. But realistically getting more and more powerful and everybody uses the word, the buzzwords personalization, which is a little bit of what I'm talking about. Personalization is generally in my opinion a little more dynamic than that. But this is like segmenting, getting more focused on not just your marketing messaging but your education, your content and your value adds to get people to want to stay on your subscription.

Matt Edmundson [13:27 - 14:09]: That's super important and I love that. I mean in effect what you're talking about is you're talking about getting more and more rooted into your customer base. Are you understanding them more, giving them more stuff to help them see the value of your subscription? Because there's a thousand websites with protein powder subscriptions, but there's not a thousand websites with the protein powder with the specific creatine, with the email sequences, with the, you know, blah blah, blah blah blah and all those sorts of things that are constantly innovating. So you're, you're, by doing that you're giving customers that, you know, that said yes in the first place, you're giving them a reason to keep Subscribing, aren't you?

Matthew Holman [14:09 - 15:04]: And giving them a better experience, you improve retention. It's like it's a secret in the sense of like you can convert people easily, more easily the more direct in your offer you are. And then again you have more direct feedback on how they're using it. Your retention is better overall. It's just the right way to go. Now when you're new it's hard to do that, it's hard to understand all that, but. So that's why I always say when you're new you want to collect information. You ask post purchase surveys, you try to find out as much as you can from people about who they are, like why they're buying it. It's not just where somebody came from. You really want to find out like what are you doing this for? And then go one step further, like what's your ideal situation? So like on the weight building, the muscle building thing, is it because I'm going to go enter a Mr. Olympia, is it because I'm getting ready for the summer, is it because I recently came out of a breakup like when you go like one step further, that's even more powerful that you can use to personalize offers for people?

Matt Edmundson [15:05 - 15:47]: Yeah, I love that. Yeah. The post purchase survey we don't actually do and I'm thinking actually this would make an awful lot of sense. The reason I'm smiling I suppose a little bit, but is because you've in effect given me a game plan. One of the things, one of the products we're thinking about throwing in is a protein powder into the business. We're very much aimed at the vegan market and we have a really strong presence there in a very good niche. And so we're now looking at products to expand out again. You know, if you, if you buy supplements, the chances are you buy protein powder. So if I can persuade you to buy both from me, it's just another reason not to stop the subscription. You know, it's, it's sort of a one stop shop you become.

Matthew Holman [15:48 - 16:47]: And with your example it's again I think the thing that most brands miss that I work with, that I talk to is you don't spend, they don't spend enough time educating people on why their product or brand is different and why it's important. And if you're a vegan protein brand, right. If you're a vegan brand and you're talking about protein powder, there are certain things related to how that protein is like cultivated and created and sourced. They're Going to be really important to a vegan person that somebody else might not care at all about. Right. But that person will. And if you spend just a little bit of time like delivering content or again, think about your upcoming order reminder, okay? So they're going to get reminded that their ship, their products about to ship and their credit card is about to get charged. That's a critical point to remind somebody why your product is more valuable. Like, hey, our product costs this much or it costs a little bit more. But remember, it's completely ethically sourced and no animals are harmed in the cult. All that stuff is like really, really great retention tool when you know who you're talking to.

Matt Edmundson [16:48 - 17:58]: Yeah, that's super true. I mean the vegan market itself is quite a fascinating market because vegans, I think are the most researched people on the planet. I remember when we had a beauty company and you'd get asked certain questions and you can what the popular questions are, but the depth of question you get asked from the vegan community is unbelievably deeper, more deeper than the beauty industry. And what we found is exactly what you're saying is right. The more we, we gave that information which was deeper than what most people would ever dream of getting, not only did our vegan market grow, but those that wouldn't profess to be vegans but just want really good supplements started to come along and go, oh, this is interesting, I'm not vegan, but I'll take that because that looks really good. And so we found actually a growing segment of our customer bases outside of the vegan market because of what, like you say you're educating super well. I love that the customers. Yeah, yeah. Super powerful. It's interesting, isn't it? And I. Where do you see it all going?

Matthew Holman [18:00 - 20:42]: Yeah, I think we're, you know, we've, I mean, we've been talking about like the Internet of things for like, I feel like 25, 30 years now. And in many ways, you know, and it probably hasn't really materialized in the way that we might think, but I think we're, what we, I think we are on the verge of, is a lot more individual personalization and control. Right. So Right. When you think about the fact that our smartphones, our schedules, our ability to like, you know, my wife is at work and realize, you know, maybe she forgets something that she wants for dinner that evening and she orders a Walmart delivery order to trigger by the time she gets home. Right. Like, you know, we might need some vitamins for the kids that we ran out of and so I'm going to next day it via Amazon. And, and so the big, big brands are leveraging like delivery fulfillment networks. Like their technology is like incredibly advanced and that they're constantly investing and innovating in. What I think is really exciting is that I think there's a democratization of technology that is happening on apps like Shopify. When you know you have recharge, you have Skio, you have Stay, you have Loop, you have smarter, you have all these other like Q Pilot has some very specific B2B applications. Right. That are different than what other people are offering. So you're seeing like all these different features come out that I think are making it a lot easier for brands, say like yours, that have a mission, that are trying to reach a certain type of person or consumer and that they're able to enable a different type of experience. So essentially what I see is the future is a lot more predictability. So like a subscription and like even just a couple years ago you might just have your subscription processed. Say like say October 10th when we're filming this is. And then it gets, it gets delivered in seven to 10 days. Well, I think it's not that far down the road where similar to Amazon, you'll actually see the expected delivery date on your subscription before it processes that you'll have much more control over that you'll be able to skip and then have Amazon next day for you because it's not going to come fast enough. And so we're trying to like enable all these better experiences so that you're, you do a better job of like being a part of everybody to everybody's life and being really easily accessible from their phone. So I think like some of the app integrations, like you know, Tapcart shop to app and things like that, they're making it really, really easy to have a mobile app on your phone where people can manage stuff. Yeah, I think that control, I think that control is scary for some people because it's like, oh, it's so easy to like with a true bill, go cancel something. I think the flip side is any brand that's trying to invest an experience, that's trying to look for engagement opportunities is going to find it a lot easier to engage with their customers and make it so that it works on their schedule.

Matt Edmundson [20:43 - 21:42]: Yeah, very good. And I'm curious, I really am curious to see where it all goes and where the technology goes. And I'm, I'm aware that I, I buy stuff just on, on a traditional E commerce basis. Right. There are sites that I'll go to and I was buy one off products. There are sites that don't have subscriptions but have memberships. Like the, you know I'm wearing, it's great example actually I'm wearing a through dark top now they have a sort of a membership program. I don't have a subscription with them but I have a, do you know what I mean? I have a membership type thing which is maybe next level subscription and then there are things that I am subscribed to. You know I have this deodorant which I use that is on subscription is wonderful. You know it's all straightforward and easy. And so it seems to me that we're sort of, you know, we're buying in all three channels and I. And juggling. That becomes quite interesting for a consumer, doesn't it in terms of remembering all of these things.

Matthew Holman [21:42 - 21:53]: Well, I would, I would say it like this. Like I think the, I think the difficulty from the brand side and the opportunity is understanding that different types of consumers are going to want to buy in a different way.

Matt Edmundson [21:53 - 21:53]: Yeah.

Matthew Holman [21:53 - 25:19]: And so like a really simple example might be like different demographics. Prefer email or prefer sms. Right. So like they'll say like you know, like a working mom prefers SMS notifications because her email she's like not going to get to because of everything else that's happening. So quick replies. They really prefer that type of engagement. And so when you think about like you know, oh I could buy this one time, I could buy this subscription, I could buy this membership, I could buy this in store, you know like again the multi channel element, I could buy it from a mom and pop store, I could buy it from Walmart or Amazon. So from the brand side that can feel really, really overwhelming because you're trying to figure out like all these channels. And so I'd say like keep in mind that the consumer very, very quickly makes yes or no decisions based off of friction points. And if you don't have something available in a way that they want to buy, they're, they're gone. They're going to go to somebody else now. And I'm saying all that to make. I know that sounds kind of bleak but here's the, here's the advice. And where I see being successful is, is if you can understand your existing customers, their preferences and as. And also do some research with your existing customers to understand what would be easier for them, you can win that game. Right. And so like take pet food for example. Is it just a really common one. Most people aren't concerned about their pet food until they run out. And so I don't really need to know. Like if I'm on a pet food subscription, I'm not as worried about the billing reminder email. But I would like to know if I'm getting low. I need to, I'm gonna go check that that order's happening. And so it might be something as simple as like, hey, I might not work, I might not invest a ton of content in my upcoming subscription renewal emails or sms, but I might want to make sure I send an email, an SMS to let somebody know that like, hey, like, you know, based off of your order frequency, you're low, you should reorder or hey, your order's been shipped, don't worry. So it's like, sometimes it's just simple, like understanding that touch point and that engagement. A lot of subscriptions, people are like set and forget. Like supplies. Like a filter that I'm going to replace in our hot tub. I have that on a subscription and cleaning supplies for. I don't want to think about it. I want to get them and then I go use them. Yeah, if I lose the hot tub, I'll cancel my subscription. That's like a relationship. Whereas with the protein powder or coffee or something like you, you have to think of like, okay, well if our coffee drinkers, how often do they want to try a new flavor? Should we be implementing like a membership program for people that really like trying different things and we'll just ship them a different one every month? Or do we, you know, do we want to make it easy for people to swap? And so it's like again, when you start to understand the behavior of what people desire. And I would also add the caveat, pay attention especially to the most valuable segments. So look at your top 10 or 20% of your customers and do a lot of research with them because those are the ones you want to hold on to. Like I've been a dollar club subscriber for like seven plus years, right. And my preference is I ignore everything. I just get replacement razors on the schedule. That works for me. So I think it works for both of us, you know, but, but so you again, you pay attention to the most valuable customers, try to get deeper into what would be better for them, whether a different kind of loyalty offering or different kind of communication strategy. That's where you're going to find wins and profitable wins, I should say.

Matt Edmundson [25:19 - 27:10]: Yeah, really good. We found actually that when we, when we send the emails out saying your subscription was due. If we put in the email a button which said snooze for seven days. And it was just one click. In effect, you click the button, it goes to the website and says, do you really want to, you know, just want to make sure this is not a but thing, you know, you just, you actually genuinely want to snooze it for seven days. And so within two clicks you've snoozed. You don't have to log into your account or anything like that. So it became frictionless, the amount of cancellations. You know, people would subscribe, take the offer and then cancel. They fell dramatically just by putting that one thing in the email. By just saying, now we get this might, you know, you might already have some vitamins crying out loud. We know you don't take them every day because life happens. And so as much as I want you to take them every day because obviously you buy more. But it's, it's one of those where we did this simple thing and it made the biggest difference to our subscriptions. And the other thing that made a big difference and talking about understanding customers was we gave the best prices to our subscribers. But we found actually if we gave them a simple promise which said, listen, if we ever put an offer on the website, we will give you that automatically. So if there was like a gift with purchase, then you get that automatic. You don't have to do anything, it will come in your description box. That made a big difference as well to our retention. So when we've got the, oh, it's great, it's worked super well. So with Black Friday coming up, and we saw it last year, but with Black Friday Cyber Monday coming up, all the offers that we give out on the site, especially to new customers, those subscribers don't have to do anything. It will just appear in that box.

Matthew Holman [27:11 - 28:08]: See, I love it because there's so many brands that are really concerned with their subscribers being unhappy and canceling to go take that new offer. And I've heard it from a few other brands. One of our clients is doing that. They're like, hey, this is the store wide offer. And we're just giving that to all the subscribers too. We're not even going to question it. And I think that's the mentality that works because that improves brand trust and loyalty and keeps people around longer as opposed to worrying about a certain subsegment of your subscribers that are going to cancel to take a different offer and you lose a little bit of profitability from that. So I really like that approach. And I will say this from a data perspective. At qpilot, we had, we did a big research project a couple years ago and we're looking at like the differences in lifetime value of subscribers. And we found that when people make three changes to their frequency, so just like how often they get it, they're worth 200% higher in LTV than people that didn't.

Matt Edmundson [28:08 - 28:11]: Okay, I'm gonna go check that stat on ours now. Yeah.

Matthew Holman [28:11 - 28:18]: And then, and then people that change their product three times were 600% higher on LTV.

Matt Edmundson [28:18 - 28:19]: Wow.

Matthew Holman [28:19 - 28:37]: So the idea is if you can make it really easy for people to adjust things so that they fit for themselves, they'll stay. You remove a massive friction point, which is why do I need three of these when I have, I have half of the bottle left, I don't need another big shipment left. Like, let's delay that a week or let's delay that a month.

Matt Edmundson [28:37 - 29:23]: That's really impressive. I'm definitely going to check those stats out. Thank you for that. I'm an important point because I, I, it's the reason why I love subscriptions. You know, we started out as an ecom. If I started again today, I suppose maybe this is a better question to get into. Matthew. I don't know, tell me what you think. I've got a supplement. I'm going to start again today. Do I actually do straight E commerce or do I just go pure subscription slash membership straight away? Because I remember having this conversation with Chris George and he was very strong. Why would you do E commerce, just go subscription all the way? Because Chris is bound to say this, right? I asked Jay Myers the same conversation and he had a slightly different answer to Chris. But I'm curious, how would you do it?

Matthew Holman [29:23 - 31:33]: Yeah, a couple years ago I would have. I very much aligned with Chris George's opinion, which is, you know, it's not worth it to not do subscription. First, I would say that it's not like harder to do it. Like from a financial standpoint, it's often easier to have the one time option at least available so that when some people hit your page, they don't want to commit, they have a buying option that they want. So my personal philosophy is really about empowering an experience for the most valuable customer. And so that would be spending all of your time and resources trying to develop a subscription offer that can both convert well and be valuable for both you and the customer. And so that's like testing different offers, gifts pricing, different bundling or purchase Options, different frequencies, like spending a lot of time investing in that because I think if you go like the typical e commerce route and you're just hoping to catch some subscriptions on the back end kind of thing like that can actually like just not work out anywhere near as well from, from a finance standpoint. So, so that's kind of my approach is like look at, look at the subscription and then also like I think if you think about what can I build into the product or build into the experience as part of this. So like you know again like if we're gonna st, you know, the protein powder example, you know, I may, if I'm going to develop a new protein powder, I'm going to be selling like and again I know that a lot of my consumers are meal supplements or gym goers then maybe I could develop a meal supplement gift and a gym gift. And then on the website I have you pick your, which gift you want with purchase. So it's like just, just thinking through like something simple like that. Like you know, and then on and then once they select that I can tag them in the system for what other things to implement. Right. So I try to think through like what's long term going to be a better experience that's going to make, be more effective. So I would say lean into the subscription first option. I don't think you should eliminate one time altogether because you will lose sales and that will make your cost to acquire a customer more expensive. But you should be putting all of your time and effort and resources into optimizing the subscription first experience.

Matt Edmundson [31:33 - 32:12]: Yeah. Thank you. I think I'd probably agree actually. I mean it's an interesting thing, isn't it that the one time if I look at the stats on the one time purchase versus the subscription and there is definite a shift. So we tend to find people come to the site, they'll buy something, try it and then decide if they want the subscription. We do get. People come sign up to the subscription and then will either cancel it or pause it for the first time whilst they figure out if they like it. But most of the time it is one time purchase first and then the second or third purchase is where they sign up to the subscription.

Matthew Holman [32:12 - 32:17]: And see I have a lot of brands that are getting first purchase subscription opt ins.

Matt Edmundson [32:17 - 32:17]: Yeah.

Matthew Holman [32:17 - 33:13]: And so like and there might be 70 or 80% of their subscribers are first purchase opt ins. So it just kind of depends. Again I think it does come down to like trying to figure out the right offer if I'm going to Do CRO tests on the product page. I'm going to run CRO tests related to like conversion rate tests related to like the buy box. Prioritizing the subscription. Again, a ton of my content's all about the offer because I think the offer is the most important part of the subscription experience is like what people buy and why. So again, focus. Spend a lot of time trying to think through what's going to make it more compelling. And it's not always just price and discount or gift. There's like, we've done tests with like prepaid options where somebody can buy a three month subscription at once to get a really good price. You could buy a six month subscription to get the best price. So there's, and those things can be really beneficial too because of like how it impacts your cash flow. You get a big, you get essentially a three month sale at once but with a bigger discount.

Matt Edmundson [33:13 - 33:13]: Yeah.

Matthew Holman [33:13 - 33:23]: So it's like there's a lot of different ways to frame it and that comes down to like again just thinking through what might work, listing out those tests and like doing research on how it looks like on other sites.

Matt Edmundson [33:24 - 33:55]: Yeah, that's really good. I'm gonna, I'm gonna, I'm curious actually to see what our first time purchase rate is with subscriptions and see, and actually to see how that's gone. I, I don't actually know that stat on our site and I'm listening to you talk, I'm like, I really should probably know this. This would be actually quite helpful. So speaking of stats, then that's an obviously important stat. What are some of the key metrics that I really need to think about when it comes to subscription commerce?

Matthew Holman [33:55 - 35:39]: Absolutely. So basically I like to say there are three levers or three legs of the subscriptions tool. So there's the number of subscribers you have, there's the average order value that a subscriber has, and then there's the number of orders or frequency or sorry the number of subscriptions. So you might have a thousand subscribers on a $50 average order value and on average they last six months. So those three numbers allow you to calculate like lifetime value or really realistically lifetime revenue of them. And then you can use your profitability to determine lifetime value. But those three things, if you think about whatever actions I'm taking across the subscription like landscape should be influencing at least one, if not two of those things at a time. So you know, if I'm doing an offer on the landing page to try to increase the number of subscribers or I might Be doing an upsell to try to increase the average order value. Or I'm using a gift that's trying to implement like a better retention to make the renewals go out farther. So those, if you just think about it in terms of like those three numbers like I need to positively influence the one and, and the best ones are do multiple. That's why I like prepaid subscriptions as a test or I like a gift with purchase can often be a better like you know, or, or sorry, bundling like by two or three at a time because that increases your average order value. If you do a prepaid subscription, that increases the average order value but it also increases the average length of retention. So all the numbers I've seen, for example is a three month prepaid subscription retains better than a month over month subscription at three months.

Matt Edmundson [35:39 - 35:40]: Right.

Matthew Holman [35:40 - 35:53]: So, so it's gonna be a better way to retain people. Now less people will take that. It's not a lot of people won't necessarily default opt into that, but you can get quite a few people to opt into that and it can be really powerful on your business.

Matt Edmundson [35:53 - 37:22]: It's worth offering, that's for sure. Right. That's really interesting. Well, it's interesting you talk about those three metrics because when people say to me, you know, in E Commerce, what are the, what are the metrics metrics I should be concerned about? I say the same three things. Average order value, average order count. And then you know, the sort of the number of customers that you have. I'm like, you need to watch those. And I break the customers down into how many are new customers, how many returning customers. But those three numbers, I learned this years ago when I was a snotty nose teenager. I think I was I a teenager. Maybe I was in my early 20s. I was close to being a teenager. It was a long time ago. Matthew, I'm not gonna lie. But I remember sitting in a J. Abraham, you know the old copywriter Jay Abraham, he did an event that I managed to sneak into somehow. I can't remember how I got in there. And he said there's only three ways to grow a business. You increase the number of customers, you increase average order value or you increase average or what he called average order frequency and what we call internally average order count. Same thing. But in essence it's interesting how I've never forgotten that. And actually all through my E commerce career these are the three things that I've always been sort of focused on. So it's obvious, I suppose in subscription it doesn't change. You just want to know the same numbers, dude, and focus relentlessly on those. What are some of the pitfalls that we need to think through about subscription commerce?

Matthew Holman [37:23 - 39:11]: Yeah, no, it's. It's a great question. I think the way I like to maybe try to explain it is, you know, just this classic, like, we're all entrepreneurs trying to build businesses. Try to figure this out. There's a. There's either like a scarcity mindset or an abundance mindset, if anybody's heard this before. The idea is like, you can either be really, really scared about what you're going to lose, or you can feel like you're just trying to, like, build more and more great things for people that want those. So the mistake I often see in subscriptions is people obsess over, like, the people that have left and how to keep them from leaving. Okay, so the idea being like, oh, somebody's canceled. How do we stop it so they can't cancel that quickly? Or how do we stop somebody from being able to do that and they're not putting any thought into how do we make it easier for the people that like our stuff to buy more? How do we put an offer together that. That captures more value from them? And so that's honestly the biggest, one of the biggest differences I've seen in. I've seen successful businesses of all sizes. But the abundance mindset is really more about, okay, you know what? We need to offer a membership because 10% of our subscribers are telling us that they would love to have this extra, like, value add and we could make, like, this much more money off of that. That's fantastic. You know, as opposed to another brand that's like, hey, we got to make sure that, like, you can't cancel if you pick this option at cancellation, you can't come back for this amount of time or something like that. Like, okay, there's, there's some, like, validity to, like, how you manage or understand why people are canceling and, like, building that experience and stuff. But if it's all about prevention and loss prevention and scarcity, you miss on making, I think, again, 10, 20, sometimes 30 or 40% of your subscribers, much more profitable for your business.

Matt Edmundson [39:11 - 40:29]: Yeah, that's so powerful. I love that. I love that. And I think, I mean, I'm going to shout, I'm going to talk about Adobe, because I remember being subscribed to the Adobe Creative Cloud and I'm like, I don't really need it anymore. We've got graphic designers. I don't understand why I've got it right on the computer. So I'm trying to cancel it. And they're like, well, if you cancel it now, you've got to pay this much money. And I'm like, okay, that doesn't make. And I had to pay quite a lot of money to cancel it. And I'm like, well, why Hang on, I've been, I've been paying this for 11 years, right? I've been a really good customer and you now want to charge me this much money? It got, it was, it was ridiculous. I can't remember how much it was, but it was hundreds of pounds. And I'm like, I have told, I've got, I've told all our graphic designers we're no longer using Adobe. We're going to use other stuff. And we've moved on to affinity designer and things like this to the point where I've become an anti evangelist list of Adobe. I'm talking about it now on the podcast saying, don't get it, you don't need it. There is stuff out there that's not going to screw you over, right? Because they made the experience of me leaving so bad that I never want to go back. And I, I learned a big lesson for that in terms of our subscription. I'm like, if people want to cancel, make it so easy that there's no.

Matthew Holman [40:29 - 41:50]: Gather as much information as you can, right, to understand why. But like that's why I like, you know, I would love to see an experience of Dobby, like offering you to swap into other products that maybe you could use or have you tried this or something like that, you know, instead of necessarily trying to prevent you and yeah, like on a D2C side, like offering up different flavors. I would say the other part is like, you know, it's like a sales mentality is like, you want to get that? No, if somebody doesn't want it, they're not going to be good fit. You could capture a little more revenue, but that's a short term gain. Whereas you can empower a better experience. Like, you know, like, I don't see this happen a lot, but that's something I'd love to see happen more is like, you know, is, do you know anybody that you, that you like? Okay, if you had, if you thought the product was good but you no longer need it. Okay, do you know of anybody that you'd like to. We'll send a friend like 50% off if you're interested in referring to them like a really special like, okay. You're leaving. We get that. And you don't hate us. You just don't want it anymore. And so that's what it means, like, when you think through, like, okay, what can I do to, like, capture more? Like, okay, this person had a good experience. How do I get more from them? Like, okay, you're leaving. We get that. Like, here's a gift, or here's a. Please leave us a review. Like, some get something else out of it. That's a positive interaction for both of you.

Matt Edmundson [41:51 - 42:16]: Yeah, I love that. Because then it ends well, doesn't it, in that sense? And I think if I look at our subscribers, there are people that have come back to us because they've canceled, tried something else. It's not worked, but because we weren't a complete lunatic in the cancellation process, they've come back as a subscriber. And I think. I love that. End it. Well, we don't do that. Where we do that, you know, that extra bit that's a little bit more.

Matthew Holman [42:16 - 42:20]: Of like a Matt's bag of, like, this is what I'd like to see built in the future happen more and more.

Matt Edmundson [42:20 - 43:09]: But, yeah, no, I'm gonna try it. We're gonna. I'll let you know how we get on, because we can do that. We have the. I say that Mark, who's a head of tech, hates it when I do these podcasts because he's like, matt, you keep saying, well, let's do that. He says, this is hours, days, weeks of work, you know, developing. That's fine. Take 10 minutes, be all right, listen, let me. I'm aware of time. And so whilst I remember, Let me ask you, Mr. Holman, what's your question? For me? This is where I ask my amazing guest for a question and I answer it on my social media. So if you are listening to the podcast and you want to know how I'm going to answer this upcoming question, come follow me at Mat Edmondson on Instagram or LinkedIn and I will put the answer there shortly. But, Mr. Holman, please, what is the.

Matthew Holman [43:09 - 43:52]: Question I would like to ask with the variety of businesses you've built and run, if you could go back 20 years or whatever, like what, what would you start? What would you try to build? Knowing what you know now, but having, like, going. Being able to go back in time and having a blank canvas, so to speak. And I will. I will say from my perspective, I've often thought like, oh, I got to build a SaaS company and get a SaaS exit. Oh, I You know, now it's like, you know, working on the consultancy and that type of. So I've seen a lot of different types of businesses. So I'm curious to hear more about from you. Like, is there a business type and what would it be that would be most compelling, you think, most effective for you? Building a. The life that you want to have kind of thing.

Matt Edmundson [43:52 - 43:58]: Fantastic question and I know exactly the answer too. So if you want to know what I'm going to say, come find me on social media.

Matthew Holman [43:58 - 44:00]: Well, I know I'll see it. I know I'll see it on social.

Matt Edmundson [44:00 - 44:23]: Yeah, well, yeah, we're in the same WhatsApp group. I'll post it in there. Hopefully I won't get told hold off for posting it in there. But I placed it in there. But yeah. Listen, how did honestly genuinely love this and I know we've scratched the top of the surface, you under the tip of the surface, should I say. But you have a podcast where you deep dive into the whole subscription stuff. What's the podcast called? Tell us a bit about that.

Matthew Holman [44:23 - 44:48]: Yeah, the podcast and newsletter is subscription prescription. If you go to the subscription doc. Com, you can sign up for the newsletter and every newsletter is a correlated podcast episode. But you can find us on Apple, Spotify, all the different streaming platforms. I kind of alternate between doing interviews and solo episodes. So sometimes I'll just go on a, you know, a rant about a topic or go through like lecturing on BFCM strategies.

Matt Edmundson [44:48 - 44:49]: Yeah.

Matthew Holman [44:49 - 44:54]: And other times I'll interview experts and stuff like that. So. Yeah. And then regularly posting content on social media as well.

Matt Edmundson [44:55 - 45:17]: Fantastic. And I know you put a lot of time and energy into that and it is really high quality. So do go check out the subscription doc and go get yourself signed up for them. I see it all. It's really good stuff and just appreciate it, bud. I appreciate you putting the time into that content because I've learned a lot from it. And we'll continue to learn a lot from you, I have no doubt. So thank you for doing that.

Matthew Holman [45:17 - 45:23]: Absolutely. Thank you. Well, I didn't realize you had a supplement brand. So we're going to have to get you on there and talk about what you've been building too.

Matt Edmundson [45:23 - 45:26]: Well, I don't know if I'm an expert. That's my only problem.

Matthew Holman [45:27 - 45:33]: No, it's all bad experience. I just love hearing from think people and what they've tried and not like that's how I think we all learn.

Matt Edmundson [45:33 - 45:43]: Yeah, no, it is totally. Well, listen. And is that the Best place that people can reach you, just go to the website sign up. Or is there a LinkedIn that people can find you on? I know the answer to that question.

Matthew Holman [45:43 - 45:51]: You can look for me on. LinkedIn is definitely a great place or Twitter subscription doc. Matthew Holman, our thesubscription doc. Com is the website.

Matt Edmundson [45:51 - 46:33]: Yeah, fantastic. We will of course link to all of that information in the show notes and the show notes will be in three different places. Choose your best place. It'll either be in the email. If you signed up to the newsletter, it will be on the show notes on the website. And of course, if you're listening to this on a podcast, which I know most of you do, or even if you're watching on YouTube, just look in the description. Just look in the show notes on the podcast app. All the links are there as well. I'm not going to blag it. That's totally the truth. But Matthew, genuinely listen, thanks for coming on, man. Really appreciate it. It's great to get you on before the, the new nipper comes along and congratulations again on that. Stoked for you guys and hope all that goes well and yeah, genuinely thank you.

Matthew Holman [46:34 - 46:36]: You're welcome. Thank you. This is fun.

Matt Edmundson [46:36 - 47:37]: Oh, yeah. Now what a great conversation. Huge thanks again to Matthew for joining me today. Now be sure to follow the E Commerce podcast wherever you get your podcasts from because we've got some more great conversations wind up and I don't want you to miss any of them. And in case I know you were waiting for this bit, in case no one has told you yet today, let me be the first. You are awesome. Yes, you are created awesome. It's just a burden you have to bear. Matthew's got to bear it. I've got to bear it. You've got to bear it as well. Now, the E Commerce podcast is produced by Punt Junction. You can find our entire archive of episodes on your favorite podcast app. Big shout out to the team, including Sadaf Banon, that makes this show possible. Theme music was written by Josh Edmondson and as I mentioned, everything is all on the website. Just go to e commercepodcast.net if you want to find out more. But that's it. That's it for Mr. Holman. Thank you so much for joining us. Have a fantastic week wherever you are in the world. I'll see you next time. Bye for now.

Matthew Holman [47:39 - 47:39]: Sa.