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Understanding Total Subscription Orders
Want to improve customer retention and boost recurring revenue? Offering subscriptions (and subscription services) is a helpful tool in turning one-off customers into repeat shoppers.
At Tydo, we refer to total subscription orders as all orders with a subscription tag in Shopify, or the count of all orders placed via subscription.
What’s a subscription? It’s a business model, where a customer agrees to purchase a product (or products) for a recurring rate on a cadence that meets their needs, whether that’s monthly, quarterly, or yearly. Instead of a one-off purchase, it’s an agreement.
In a traditional subscription model, the customer selects the product(s) they want on a specific cadence. Then the subscription program does the rest to automate the process: charging cards on file, submitting orders, and creating a portal for customers to access subscription information as well as skip or cancel the subscription if need be.
A single customer can also have more than one subscription with a brand. For example, a single customer might have a subscription delivered to their house while the other one is delivered to their office or a friend’s home.
In addition to offering flexibility to your customer base, a subscription box (Birchbox, Dollar Shave Club, or Olipop for example) is a lever to increase customer lifetime value (LTV) and boost average order value (AOV).
How to calculate Total Subscription Orders
Total subscription orders = the count of all orders with a subscription tag over a time frame
Data source: Shopify
Important note: At Tydo, we exclude test orders.
Example
Let’s say you run a coffee bean business called “Beans to go.”
Customers can make a single purchase or join your “Coffee Club” to get a new bag of beans delivered at a weekly, monthly, or quarterly cadence. This subscription means that a customer pays a designated amount (weekly, monthly, or quarterly) and receives a bag of beans at a regular cadence.
In October, you had 150 one-off orders on your ecommerce site and 245 subscription orders from new and returning customers (orders designated with a subscription tag within Shopify). Your total subscription orders for October are 245.
Takeaway
Total subscription orders are like securing season tickets for your favorite baseball team. You pay for a set number of tickets, and you get to choose which games you want to attend over a season.
Why is important to track total subscription orders? It gives you an idea of how many customers are using your subscription program (or not). Plus, you can dive a layer deeper to see new vs. returning subscribers
Within your ecommerce subscription model, you might learn that your newly launched subscription offering needs to be refined or optimized depending on the feedback. Or, maybe it’s proving to boost retention and revenue, and you want to find ways to double down on customer loyalty.
Working to improve total subscription orders means improvement in other areas of the business, too:
- Increased customer retention
- Increased lifetime value (LTV)
- Increased revenue stream and cash flow
- Increased customer relationships, engagement, and brand referrals
- Decreased customer acquisition costs (CAC)
Ready to level up your learning?
Read more about Total Subscription Orders
Total Subscription Orders vs. New Subscription Orders
Total Subscription Orders include returning and new subscription orders.
Breaking it down further, you can track new subscription orders by seeing which orders come from first-time (or new) subscribers.
Once you obtain new subscription orders, use that as insight as you move forward with your acquisition and retention efforts. Magic Spoon, which sells better-for-you cereal, uses a replenishment subscription as part of its overall retention strategy. Additionally, they have subscriber benefits, such as exclusive offers and early access to limited-edition launches, to entice new subscribers.
Total Subscription Orders vs. Returning Subscription Orders
Total Subscription Orders refer to both returning and new subscription orders.
Returning subscription orders indicates the number of orders coming from returning subscribers (aka people who are still subscribing).
If you’re paying close attention to retention, this is a great metric to watch and gives you deeper insight into customer buying behaviors within the subscription business model.
Are they returning to repurchase the same variety box? Do they churn after a few orders? Are there products you can upsell or cross-sell to these customers?
Total Subscription Orders vs. Churned Subscription Orders
Total Subscription Orders include both returning and new subscription orders.
Churned subscription orders are those orders via a subscription tag that have been canceled. While it’s not included in the total, tracking this metric to see where improvements can be made or how to optimize a subscription program for enhanced customer flexibility is helpful.
You want to keep an eye on churn and keep this number to a minimum. If you have a month where you have a ton of churned subscription orders, you might want to revisit your subscription offering and make improvements.
How do you reduce churned subscription orders?
Reducing churn and increasing retention is essential for ecommerce businesses, especially those that have a subscription-based business model.
Kyle Hency, co-founder and former CEO of Chubbies, recommends looking at a long-term view of your brand rather than margins month-to-month. Brands with higher retention rates are more sustainable.
Brands offering subscriptions must make sure to provide a good customer experience and implement strategies to engage their most loyal customers. Recharge recommends implementing these tips to reduce churn:
Use transactional SMS to give existing customers more options. With enhanced functionality and integrations, customers can change their account or subscription through text messaging rather than requiring them to log in to a portal.
Implement a customer loyalty program to reduce churn. Exclusive access, free shipping, and reward points are some incentives to drive customer retention and brand loyalty.
Offer good customer service from the start. Customer service plays a significant role in churn rates – incorporating FAQ pages or landing pages customized for subscription members reduces the workload on the customer support team. Plus, it reduces tickets. Customer feedback is important in improving customer service, subscription offerings, and reducing churn.
Total Subscription Orders vs. Total Subscriptions
The total subscription orders refer to the total number of orders obtained through a subscription program. This is the total number of orders with a subscription tag in Shopify.
In contrast, the metric “total subscriptions” highlights the cumulative number of people subscribed to a program within your ecommerce subscription services.
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