You have to agree that shopping online and having products delivered to our door never gets old, even as we say our goodbyes to the pandemic. But our expectations, on the other hand, haven't changed one bit - we still want the same experience and assistance that a physical store offers and then some!
To keep up with rising expectations, eCommerce companies are leveraging cutting-edge technology such as artificial intelligence (chatbot communication), augmented reality (physical experience of a store while shopping online), intelligent search (search optimization for easier searching), and others. Headless commerce is one such technology that is gaining traction for all the right reasons.
The eCommerce platform's frontend (display) and backend (shopping cart) are decoupled in headless solutions. APIs are then used to communicate between the systems, allowing you to provide highly personalized customer experiences across multiple channels - whether through a POS system or a mobile app - and enable agility in responding to changing customer and market expectations.
While eCommerce businesses have unrestricted freedom to shape their frontend for revenue-generating activities, they must have a dependable revenue engine at the backend that can manage the revenue they are generating. This way, they can focus their undivided attention on entering new markets, strengthening their brand, and, most importantly, creating unique shopping experiences.
Let us walk you through the various steps you need to build a go-to-market strategy for your eCommerce business. We'll talk briefly about how you can create an engaging content layer (eCommerce frontend) before getting into the tech stack you'll need to generate, sustain, and grow revenue for your eCommerce business or even launch and scale a subscription service.
But first, let's begin by discussing how headless subscription management is redefining the eCommerce landscape.
When Dollar Shave Club launched a low-cost subscription grooming service in 2011, the long-dominant player Gillette saw sales of its men's razors fall in competition from DSC and other online startups charging less. Gillette's market share has since fallen to 54%, while DSC has become the world's first direct-to-customer unicorn, inspiring a new generation of subscription-led DTC retail businesses. So, by the time Gillette launched its 'On Demand' subscription service in 2017, it had already paid a high price. But why would a more established brand with a loyal customer base not launch subscriptions earlier to compete with the upstarts? The answer is hidden in a technological nuance.
Most well-known brands, particularly those not digital natives, began their eCommerce journeys with monolithic eCommerce architectures. Since their frontend and backend were inextricably linked, making minor changes (e.g., adding a subscriptions layer or new products) or implementing feature upgrades (introducing subscription deals or pausing or tweaking subscriptions) would necessitate completely reinventing their platform. And it is here that modern DTC subscription eCommerce businesses discovered an opportunity:
Adopting subscription and revenue management tools in a headless architecture proved to be a gamechanger for DTC companies to keep up with the rising demand for subscriptions (post-pandemic) and improve the purchase and post-purchase experiences (the two most sensitive touchpoints in subscriber journeys).
Headless commerce can enable companies to build future-proof scalable platforms that can go to market faster and take on market leaders, like how DSC did.
Now that we have an idea about how headless solutions are (positively) impacting subscription eCommerce let's go through the GTM strategy.
The display – everything your customers see when they open your website or mobile app, like photos, videos, and text on screen – is essentially the meat of your eCommerce platform. Creating a fluid and engaging content layer is vital to delivering the best value. Here are the core levers you should be focusing on to build your frontend:
It is up to your development team to bring to life engaging eCommerce experiences. Hence, make sure they understand the full range of benefits APIs can provide – especially if you're moving from monolithic software. You need to regularly communicate with your team about your requirements to ensure there are no gaps in fleshing out the frontend platform - from building a theme to setting up the product pages.
Have a solid understanding of the theme you want on your eCommerce website, including how you want your customers to navigate, the style of your homepage, and the like, before handing it off to your developers.
These are some of the most critical pages on your website. Once you've figured out the template for your web pages, the next step is to input your products. Include product categories, product descriptions, and product images.
Pro tip :
Adding new products/product features to a plan or removing existing ones sounds like an easy task. But do it a few hundred times on top of your existing code with your developer, and you'll end up with a bloated product catalog in the backend. It's essential to have a lean catalog that lets you add courses, map it to plans, map it to add-ons without any code.
Manage multiple products and plans neatly with a flexible plan catalog. Each plan can have multiple currencies, billing frequencies, add-ons, and metered charges attached to it without wrecking your catalog sanity. (An automated subscription platform lets you experiment with pricing models and offer multiple payment options at scale while seamlessly managing your product catalog.)
Once you add the product pages, the next step is to set up payment gateways. It is important to note that this is just a preliminary step to ensure the smooth operation of your business; a payment gateway cannot address all of the complex billing use cases that will inevitably arise as your subscriptions grow. Let's understand more:
For instance, Jim has three monthly subscriptions signed up for all three at different points during the previous year). He has a six-month Christmas deal from last year that he is still using, which means he is saving 25% on two of the three subscriptions.
He is in Australia, which means that the amount charged should include local taxes, and his invoice should clearly outline the breakdown of the final amount.
You must wonder how often the 'monthly recurring card payment' code needs to be rewritten to accommodate this flexibility in billing.
While there isn't a definite answer, one thing is sure: subscriptions become complex as they grow. And when subscriptions get complicated, so does your billing. As your company scales, it's not going to take long before you go from monthly credit card payments to this level of billing complexity with taxes, promotions, and irregular charges.
As your subscriptions complexity evolves, you must include additional payment methods, backup payment gateways, advanced invoicing options, unusual billing periods, credits and refunds, promotion support, and payment recovery or dunning to smoothen your billing process.
Don't forget: With new geographies come new tax laws, invoice rules, and language support (localization). With new prices comes the ability to grandfather existing subscriptions, clone subscription models, create new ones, and accept one-time payments (since pricing experiments can cost you a fortune without them).
So your billing system must be capable of charging for every use case in any permutation or combination. The inability to do so will result in the loss of subscriptions.
Hence, there is an inherent need for a more comprehensive billing system so you can manage recurring billing as opposed to just processing payments with a payment gateway.
The following section will list the must-have features of a subscription billing system you need to look out for.
For subscription eCommerce businesses, a comprehensive subscription management system that integrates with a headless commerce platform both on the frontend and the backend can improve customer acquisition, transaction, and retention cycles by automating:
Customer retention and churn mitigation
Taxation and recurring charge compliance, and more.
Here are the use-cases that a robust subscription billing and management system is supposed to solve for and the features it should have:
Whether you want to expand your current offering or launch new products for global markets, you should be able to do so without worrying about compliance, taxes, or localization.
Rapidly expanding without disrupting your existing workflows gives you a significant competitive advantage on the road to hypergrowth.
As a subscription eCommerce business looking to explore new markets worldwide, you need a subscription management tool built for global expansion with
locally preferred payment methods - accept international payments via global payment gateways, and
multiple language support.
Deliverr, an eCommerce fulfillment company, aimed to enter new markets like Europe as part of their five-year growth plan. They needed to integrate with more payment gateways and support more payment methods to enable rapid growth. "Chargebee has been instrumental in helping us scale to the level we are at now, even with a fairly limited headcount. It has all the functionality we need and expect to grow into in five years. This will help us continue to grow with Chargebee over time, " said Daniel Chen, Finance Manager at Deliverr.
Research indicates that 72% of customers do not make a second purchase within six months of their initial transaction. According to Gartner, by 2023, 75% of D2C brands will offer subscription services, but only 20% will succeed in increasing customer retention. So, regardless of how successful your company is, it is critical to track and mitigate churn before it becomes an issue continually.
One of the primary reasons customers churn is insufficient value addition. Since customers today have unlimited choices, it has never been more critical to add value and variety to your products by diversifying your offerings (through repricing - discounts/coupons, product bundling, and the like). To keep your customers engaged and invested, you also need to personalize the customer journey through product pages, search recommendations, and product offers.
With the help of a robust revenue engine, here are a couple of ways you can mitigate churn and recover revenue while delivering superior value to your customers:
Provide a stellar payment and billing experience - nudge your customers to a successful purchase by reducing all the friction:
Make sure your checkout page loads within their browser window without redirection
User-friendly payment options that don't require them to go on a scavenger hunt for their physical wallet
Offer Mobile payment options, eliminating your learner's need to open their laptop.
Ensure your billing tool is versatile enough to automate whatever billing logic you define on any user or plan level: customize billing logic by billing yearly, monthly, or for any period - even days!
Enable an end-to-end service workflow - leave your customers in charge of their subscription:
Offer a self-service portal that allows customers to upgrade, downgrade, cancel, pause, and change their address or payment information.
Maximize revenue recovery with smart payment retries - plug revenue leaks with efficient dunning management
For instance, Chargebee has helped many of its customers with smart revenue recovery.
> Reduce churn without a developer - Save hours spent chasing at-risk customers!
Put retention on autopilot by connecting your revenue engine and churn mitigation tool in a few clicks, get insights into why customers cancel, see up-to-date customer data, and watch the saved revenue roll in.
You can also objectively evaluate the efficacy of various churn mitigation strategies through A/B testing. Testing different strategies can assist you in optimizing your cancellation flow to minimize churn and maximize revenue. We'll cover a little more about this under the fourth use-case of subscription management and billing system - driving operational rigor with subscription analytics.
Pricing is a powerful lever that impacts your revenue, but it can be a complicated science. As a result, experimenting with your pricing strategy is the best way to nail pricing as you scale.
Here are some foolproof methods to quickly experiment with pricing:
Iterate on price points, add new price tiers or switch to a different pricing model with a tool that supports all pricing models.
Protect your existing customers from billing shocks by grandfathering prices
Compare the performance of your pricing plans before and after revising price points with a rapid experimentation engine that allows you to A/B test pricing and a simulation to test the long-term effects of specific changes to your subscriptions.
Superfoods, a top-selling online effervescent tablet company, saw 4x growth in revenue in 12 months! Paul Kapsner, the Director of Finance at Superfoods Company, says, "Our philosophy as a company is not to spend months deciding the right price before launching a new product. We go with what we think makes sense initially and then use the Chargebee platform to A/B test and decide the optimal price. Chargebee enables us to roll out a new pricing experiment in 30 minutes. We're also allowed to make mistakes and find the right pricing point that suits our customer segments."
Effectively designing your website, streamlining checkout flow, and enabling a smooth payment and billing experience helps you better connect shoppers to your brand and increase conversion rates. But how do you know what's working and what's not?
It would help if you had reports and dashboards that give you actionable insights into the outcome of your experiments and aspects like customer behavior and churn. These insights remove the guesswork and subjectivity from your business's performance and reveal areas for improvement and innovation.
For example, you can reduce churn by targeting cancel offers based on relevant customer data and then measuring and optimizing their impact.
According to Brightback's 2021 State of the Industry Report, nearly half of subscribers (49%) were most likely not to cancel due to discounts, but there are a variety of tried-and-true strategies worth testing in your cancel flow.
An analytics platform that gives you a 360° view of your business growth on one dashboard; go deeper into analyzing the root cause of all churn!
Pivoting business models can help growing companies survive unexpected market turbulence, transition to more profitable business models, and enter new markets.
When the economic crisis triggered by the pandemic made survival difficult for many businesses, Pret a Manger pondered shifting its business model and decided to approach Chargebee.
With Chargebee fueling the backend, the British sandwich and coffee chain launched their subscription service - a £20 monthly subscription offering up to five drinks a day. Pano Christou, the CEO of Pret, mentioned that the company saw its delivery business grow tenfold through the coronavirus crisis. Pret notched up 16,500 subscriptions on its first day and hoped that the incremental traffic would lead to more food purchases and higher profits.
Pret's move to a subscription model paved the way for it to offer various other services via its digital platforms, such as extending its evening meal offer and deliveries. It also allowed them to engage with their customers more personally and tailor services to their spending habits.
We've seen how headless subscription management, when implemented correctly, is a winning model for a successful GTM strategy for subscription eCommerce businesses. But putting things in practice, be it global expansion, price experiments, or shifting to a subscription model, necessitates a solution that will enable all that and essentially future-proof your business without disturbing your current business processes.
And this is what Chargebee aims to do.
Chargebee works as a modular suite of subscription billing and management APIs designed to complement your existing commerce stack, exchanging information - to and fro - effortlessly with your eCommerce platform:
Supplement your core commerce functions with subscription-specific APIs to create high-value subscriber experiences.
Begin and scale a subscription store alongside any existing traditional commerce experiences.
Build your subscriptions your way, with granular control over pricing, deals, billing, and more - all from a single location.
Utilize 150 prebuilt reports centered on products, offers, orders, and payments to gain access to a wealth of subscription behavioral data.
We, at Chargebee, know that a hyper-growth subscription e-commerce strategy
needs activation of multiple levers:
Our customers can access any of the features mentioned above at the click of a button, saving hours on development.
With Chargebee as a growth partner, you can build an advanced scale-worthy platform for your subscription eCommerce business that can go to market faster and achieve the coveted hockey-stick growth.
Learn more about how you can focus on delighting your customers and scale your subscription eCommerce strategy with Chargebee.