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The competition in ecommerce? Fierce.
Ad budgets? Tight.
Recurring revenue? Priceless.
But to get there, you need a cost-effective strategy to fuel remarkable growth without increasing your expenses.
Enter: a Shopify app for monthly subscriptions.
When you shift your focus away from paid customer acquisition and focus on increasing retention and referrals with your current customer base, you’ll end up with an uptick in growth and sustainable savings on ads.
Below, you’ll find five proven strategies for reducing your ad spend with a subscription app and a case study to show you it’s possible to skip paid ads and still see an increase in revenue.
Let’s get started!
Ready to recharge your subscription app on Shopify? Here's how you can use subscription apps to slash acquisition costs while increasing your retention rates, referrals, and revenue.
The era of generalized ad campaigns is over.
Welcome to the new world order of using audience segmentation to create highly targeted campaigns that get results.
Say goodbye to throwing money at ads and seeing little to no results, and hello to putting your customer data to work.
This is where a Shopify subscription app can help.
It’s constantly incentivizing and gathering an extensive pool of zero-party data about your best customers. It knows their preferences, behaviors, and purchase history.
And the best part?
You can export this customer data (in conjunction with other data points in your CRM) to create look-a-like audiences and ensure your ad spend is used on people who are most likely to convert.
Let’s look at an example.
You notice that your dog treats subscription box has the highest conversion and retention rates. It’s especially popular with women aged between 25 to 30 years old from California, and these leads mainly come through Instagram. You also notice the add-on for next-day delivery is selected more often than not.
Using this information, you can craft a tailored Instagram ad campaign to appeal to this dog-owner demographic and highlight your next-day delivery feature in your ad copy.
The result?
You’re targeting the right audience on the right platform and highlighting the right features. This leads to you only spending money on people genuinely interested in your services, higher click-through rates, conversion rates, and, ultimately, a healthier return on investment.
All thanks to adding a Shopify monthly subscription app to your tech stack.
Traditional advertising methods aren’t cheap.
But selling to your current customers? It can cost 5 to 7x less than acquiring a new one.
Subscription models are a compelling alternative that nurtures your existing customer relationships, drives loyalty, and reduces the need for resource-intensive acquisition campaigns.
…But how can you drive retention with a Shopify subscription app?
It starts with incentivizing subscriptions with meaningful rewards. It’s a cost-effective way to drive growth, save money on ad spend, and unlock the full potential of your e-commerce venture.
What do value-driven rewards look like?
By switching to rewards that hold tangible value for the customer, you can increase subscription lengths by 62%.
TOKI also allows you to reward subscribers for the behaviors you want. Consistently.
Instead of a singular sign-up bonus and a once-off birthday discount, you can create different incentive touchpoints throughout the customer journey to encourage retention even more.
A customer-centric approach outshines the outdated “points for likes” strategy because you’re motivating subscribers with real-world benefits.
You’re creating a symbiotic partnership for everyone, which amplifies customer engagement and brand affinity, resulting in a higher customer lifetime value (CLV).
By shifting your focus from high-cost acquisition strategies to nurturing existing relationships, your businesses can reduce ad spend while building an army of superfans.
Churn.
It’s unavoidable.
…Or is it?
Subscription apps hold the key because of one underlying principle: Convert one-time buyers into devoted, long-term subscribers who are less likely to churn.
But to get there, you need a modern playbook loyalty strategy that activates your audience in a meaningful way throughout the customer journey.
Why?
Activation isn't a one-time fling. It's a long-term commitment. Each touchpoint is a chance to woo your customers, reinforce brand loyalty, and solidify the connection that you’re a match made in heaven.
It boosts the emotional bond - the very essence of customer loyalty and the ultimate shield against churn’s relentless advances.
The customer journey is also a * journey *. Along the way, there will be highs (receiving an order) and lows (waning interest).
That roadblock is easily conquered with multiple tailored touchpoint incentives. Your days always feel valued, which keeps the spark alive, helping you avoid the dreaded “unsubscribe” button.
And the proof is in the pudding.
TOKI users see an 88% reduction in churn by simply incentivizing subscriptions and rewarding retention.
This engagement throughout the customer journey, from onboarding to post-purchase interactions, plays an important role in cementing your relationship with subscribers for the long haul.
As a result, you don’t need to fork out as much money on ad spend every month, giving you wiggle room in your budget to invest those funds elsewhere in your business and enjoy a healthier bottom line.
Referral programs.
Your secret ingredient to turn subscribers into superfans and transform word-of-mouth into a marketing powerhouse.
But if you want to create an engaging referral program to reduce your ad spend, you must go beyond the run-of-the-mill CTA post-purchase.
The solution?
Branded Google and Apple referral passes.
Here’s why it works:
Think about it.
What’s more impactful: A paid ad or a personalized message delivered to your mobile?
Referral passes are the art of strategic nudging. It goes beyond a casual recommendation and becomes a compelling invitation.
It gets your brand out of the bottomless ad spend pit and deals you a strategic trump card that amplifies your reach and empowers your customers to become loyal brand advocates.
Need more convincing?
Meet Dr. Jen's Toothpaste.
The brand was attending a conference and needed to capitalize on the opportunity to convert more dentists into fans and incentivize their loyalty.
Using a branded Apple wallet and QR codes placed at the booth, the brand was easily able to incentivize attendees to scan the code and sign up for the loyalty program.
And the incentive? Cash.
As a result, Dr. Jen saw hundreds of sign-ups and downloads during the conference.
While the brand did have to pay for the cash rewards, it’s still cheaper than running paid ads.
Rekindling your lost connections (abandoned carts, inactive subscribers) is a cost-effective alternative to conventional ad spend.
Using the data from your Shopify subscription app, you can create personalized messages and exclusive offers to win back customers and increase engagement with your brand.
Here’s a scenario:
It’s a far more strategic approach than throwing money at Facebook Ads and hoping for a sale.
It’s also cheaper.
All that’s left to do is nudge the customer towards the checkout screen.
Your customer gets a strong incentive to complete the purchase, and you gain a valuable relationship without the hefty price tag of new customer acquisition.
It’s a win-win.
Meet Gardencup.
A salad subscription that offers meal delivery and fresh salads every week. With no ad spend, the brand relies solely on organic social media and word-of-mouth marketing.
It’s a convenient product that’s easy to integrate into your daily routine and the perfect candidate for a loyalty program.
…But there was a big hiccup.
Their loyalty program wasn’t doing anything.
Activation rates were low. The activities were boring. The rewards weren’t integrated into their Shopify app for monthly subscriptions.
The whole experience was…weak sauce.
Until their loyalty program had a make-over.
Teaming up TOKI and Recharge (a subscription app for Shopify), Gardencup was able to start rewarding new subscribers for joining and offering cashback, store credit, and free gifts as perks for retention.
Their new subscription tier looks like this:
Next, Gardencup launched two challenges:
And the results are in!
Gardencup started bringing in 10% of their topline revenue from referrals!
There you go.
It is possible to increase referrals and retention without paid ads using a Shopify subscription app for monthly subscriptions.
Okay, hopefully, if you’re this far, you’re on board the Shopify subscription train.
Great!
There’s only one hurdle that you need to overcome: choosing the best Shopify subscription app for your business.
In order to kick your ad spend costs to the curb, you need a solution that offers a Shopify app subscription API, a customer portal for managing subscriptions, a comprehensive analytics dashboard, and flexible subscription options.
To help you nip decision fatigue in the bud, here are the top Shopify subscriptions we recommend:
Remember, the key to choosing the best Shopify subscription app depends on your business and what you want to achieve.
If personalization is an integral part of your strategy, and you have a higher budget, Stay AI is a fantastic choice. But if you’re looking for an affordable all-rounder, the Recharge Shopify subscription app is your best bet.
When it comes to cost-effective growth, subscription apps are a no-brainer.
It gives you the ability to nurture your relationships with existing customers, focus on retention, and cut costs (sorry, not sorry, ad spend) while boosting retention.
Simultaneously.
It’s the ultimate one-two punch your ecommerce business needs.
Ready to start saving cash while boosting your profitability?
Install TOKI’s integration with your favorite Shopify subscription app and usher in the new era of long-term customer loyalty.
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