Hey Outliers ☀️
Hope you’re feeling energised for the week ahead.
We’re doing something a bit different this week.
Jonny has been involved in growing a number of subscription businesses and knows a thing or two about what works and what doesn’t.
So this week we’re sharing a breakdown of how ITCH Pet managed to scale from launch in 2018 to shipping to 110,000 pets per month across the UK in two years.
If you’re not running subscription business, there are still plenty of lessons, so do read on!
Let’s get started…
P.S. Subbly, an all-in-one subscription platform, is hosting a webinar on how to unlock subscriber growth this festive season — find out more at the bottom of this email.
Here’s what to expect today:
📰 Deep dive: How ITCH Pet went from launch to 110k pets served in two years
💪🏼 DIY: How to grow your own subscription business
🔗 Good links: The post-purchase opportunity, subscription-first principles and stopping pauses turning into cancellations
📰 Deep dive: How ITCH Pet went from launch to 110k pets served in two years
ITCH is a monthly flea and worming subscription for pets.
The business is a partnership between an experienced D2C founder/investor and two brothers who had a previous pet care business.
They’ve grown extremely fast because they got a few things spot on and stayed focused. For anyone wanting to launch a subscription-based business, ITCH is a masterclass in how to do it.
Below, we’ve analyses ITCH through the lens of six subscription-first principles.
But there are still things they could have done better (we’ve included those at the end).
Why it works👇
✅ Subscription Sales Intent
Perhaps the most important indicator that a business is subscription-first is the extent to which they make it clear that selling subscriptions is the primary focus of their business model. ITCH is particularly interesting in this regard as while it’s subscription-first, it often appears subscription-only. This is partly due to the founders’ deep experience in the business model and the nature of their initial product.
From the basic website early on, it’s clear their intent is to push subscription sales harder than transactional sales, with a big ‘First Month Free’ banner at the top, as well as front and centre as the primary call to action.
The benefits of the subscription model are also highlighted on the home page, such as tailored treatment, and access to a 24/7 ‘Video Vet’ service for members. On the product pages, the focus is yet again on the subscription option, which is automatically selected and features eye-catching colors, as opposed to the slightly greyer one-time purchase option below.
Being subscription-first allows them to bid higher in marketing than traditional businesses while maintaining profitability.
ITCH knows that a subscriber they acquire today will actually be worth more in the future. That’s because while they might buy worm treatment for a 1kg cat for £7 today, they’ll be billed at that amount every cycle until they cancel. That allows ITCH pet to bid higher for clicks and impressions than a transactional business, while still maintaining profitability. That’s the power of subscription-first in action!
✅ Product Selection
While promoting your subscription offering as the core of your business model is important, you’ve got to balance it with a product selection that can satisfy a long-term customer need or desire.
In this context, it makes perfect sense to offer consumable needs-based products with long-term usage schedules — namely, flea and worming treatments. And as a subscription, rather than one-off sales, the business can offer better pricing and experience, and remain confident they’ll generate profit over many months and years.
Being direct-to-consumer, the business is also able to cut out the middlemen – vets and other traditional outlets that typically charge a fee because of the perceived price of access and trust.
Since launching and gaining trust with a large customer base with their initial product, ITCH has been able to expand product selection to cover even more replenishables for pets. Food, treats, supplements and more mean ITCH becomes the one brand pet owners rely on to deliver everything they need for a healthy pet.
Who knows what they’re going to launch next?
✅ Customer Understanding
There’s a lot of products and services you can buy for your pet, but few are as important as those which keep your furry friends healthy.
As pet health insurance and vet visits can be expensive and time consuming, a flea and worming treatments for pets subscription solves two key problems for customers. First, remembering to treat your pet and, second, easily acquiring the treatment at minimal cost. Vets have traditionally been very analogue – without easy digital reminders – and difficult to access, often requiring appointments to get products.
Additionally, because ITCH offers need-based products (rather than wants/desires) they can easily appear as a helpful service, taking care of problems for customers who in turn are happy to pay.
Having gained trust early, ITCH are now positioning themselves as ‘The Pet Wellness Experts’ aligning with the general wellness trend and desire for pet owners to do everything they can for their pets, while being able to offer any product that falls within pet wellness.
✅ Integrated Business Model
The flea and worm treatment is well aligned to a subscription model – being a product that doesn’t vary with factors such as taste, and the subscription acts as a reminder service itself for pet owners. Once the business builds that relationship with customers, they are able to upsell with other subscriptions and one-off (or “transactional”) purchases, such as treats and toothpaste.
They evidently knew how to prioritize — transactional sales simply didn’t make as much sense within the model during the launch and growth phases, and were added once they had product-market fit and as they began to scale-up and broaden the product range to a wider market.
✅ Operational Focus
This is the only area where things weren’t as focused as they perhaps could be. The core of this principle is being subscription-first by default throughout the tech, product and operations stack – ITCH is exactly that and is a model the founder/investor has built out several times.
ITCH uses a single e-commerce platform to manage their subscription and one-off orders and fulfils in the same way for a fully integrated customer experience. Similarly, all data is pooled centrally to fully understand what customers are buying and how to improve efficiencies as well optimizing their LTV:CAC across the customer base.
✅ Integrated Customer Journey
The website is clear with its title ‘Monthly flea treatment, delivered to your door’ – flea treatment is the core hook and trust builder, and upselling additional products comes later. All buttons and key product links direct to the same experience – a funnel that captures information to personalize the experience and set up the perfect subscription for each user.
As time goes on, customers can adjust their choices to suit their pet at the time – changing food as the pet grows and adding treats or other complimentary products — a quality which also nods to their operational focus (more on this later).
The flow of the customer journey is smooth at ITCH, too. They make it easy for customers, with letter-box friendly packaging and the reliability of the ongoing subscription a benefit to the type of product. The business is also able to leverage data throughout the acquisition journey and ongoing customer relationship to improve the experience and optimize both conversion and logistics by better understanding customer needs.
💪🏼 DIY: How to grow your subscription business
If you’re considering adding a subscription option to your existing business or you’re starting from scratch, here are a few things to do to help make sure it’s a success:
👉 Make sure your product is right for the subscription model. It might sound obvious but a lot of brands will try and make a product fit the subscription model when in reality people just don’t buy it like that. Make sure you do your research.
👉 Be subscription first or subscription only to begin with. Focus all your marketing budget on getting new subscribers signed up before you start selling one-off products.
👉 Be clear about the problem you’re solving so you can continue to solve it in the best way possible for a specific group of people.
👉 Figure out where you can add additional value beyond the initial product e.g. digital reminders to give your pet their medication.
👉 Understand how your customers use your product and the question they might have around it so that you can offer a great customer experience and maintain their custom.
Any questions? Drop Jonny an email: jonny@hellowildside.com
🔗 Good links
🔗 Dollar Shave Club: Making the Most of the Post-purchase Opportunity
🔗 7 Inspirational Examples Of The Subscription-First Principles In Action
🔗 How TOTM keeps subscription customers who pause their subscription
📺 Subbly Webinar: Unlock subscription growth this Christmas — 7pm Tuesday 5th December
Want to know the secret to ending the year with great results?
Join Alex Fleck (founder of Valor Vault and Keeper Box) and Stefan Pretty (CEO of Subbly) at a webinar at 2pm EST/7PM GMT on 5th December.
They’ll be diving into Subbly features and the best ways to take your subscription business to the next level.
There’s limited space but we’ve got a few spots reserved for our readers — secure yours here: https://subb.ly/afwebdec23js
💌 Tell us what you’d like help with…
We started this newsletter for entrepreneurs just like you, and we want it to be as helpful as it possibly can. So tell us what you’d like help with and we’ll dig into it.
Or if there’s a brand you’d like to know more about, let us know and we’ll reach out to them.
Until next week…
Keep being an Outlier,
J + K