15 Mistakes to Avoid When Launching a Subscription Business

While certain pitfalls are par for the course no matter if you are launching a business, course or membership site, there are few you can easily skip with a few key strategies.

15 Mistakes to Avoid When Launching a Subscription Business


The boom in subscription businesses could make anyone believe they can launch with success from day 1.

Whether it’s a software as a service (SAAS) business or an online course you can definitely cash in big if you get your subscription launch right.

But there are pitfalls of subscription businesses. We’ll show you how to steer clear of many of them with these 15 mistakes you should avoid during your subscription launch.

1. Not Doing Your Homework

Failing to dedicate the time and effort to do your research can be fatal to subscription businesses.

Getting familiar with subscription tech terms is a good start in preparing for your subscription launch.

You should also do the following to ensure your subscription launch gets off to the right start:

2. Not Having a Unique Selling Proposition (USP)

If you have competition for your subscription business, you must have something unique to offer your subscribers.

Have some points of difference from your competitors to stand out from the crowd. Because subscription businesses are increasing in number, a cookie cutter approach won’t attract and retain customers. 

Your USP should be displayed loud and clear to give customers a reason to choose your business over your competition.

3. Pricing Based Only on Your Costs

You shouldn't just look at your cost when pricing your subscription businesses.

Cost-based pricing is normally reserved for more traditional businesses. However, for subscription businesses, costs can be quite low. So, basing your pricing on cost alone could mean that you end up losing out.

Planning to launch a subscription box business? If so, pricing your subscription box to get the best revenue should be at the top of your priority list.

4. Not Taking Time to Know Your Potential Customer

If you've identified a problem that needs to be solved and have done research into your competitors, it's time to delve into one of the most important aspects of your subscription business — your customer.

You should have a crystal clear idea of your buyer persona. This should be the kind of person you’re marketing to.

You need to know details about your potential customer, such as:

The more in-depth you go into the needs of your audience, the better you can tweak your products or services to attract them and also prevent churn.

5. Providing a ‘Freemium’ Model Without Proper Direction to Convert to Paid Users

The freemium model is one of the most effective models used by subscription businesses to attract new customers.

It’s designed to get customers to try out the product or service for free then, hopefully, transition them to paid users.

You need a clear plan as to how you move your freemium customers to paid members. This process should be designed before you launch for a seamless experience for your customer. This should be part of the onboarding process which, if done correctly, will help with customer retention.

6. Setting Your Prices Too Low

You must be sure about your pricing way before you launch especially if your subscription business ties in customers for a specific amount of time.

For example, with year-long subscriptions, if you’ve priced your product or service too low, this means you’re losing out for a whole year. It's also harder to raise prices without risking customer churn.

So, it's best to do your market research and set your prices at the right level in the first place. If you’re an online course provider, these three tips will help you to nail your pricing.

7. Failing to Provide Good Customer Service

As a founder of a subscription business, you’ve got a lot to juggle.

And something that can fall by the wayside is not having customer service and support in place from the day you launch. It's a well-known fact that it’s much harder and more expensive to get new customers than to keep existing ones.

So, you should do everything you can to build a positive customer experience from day one.

A great customer experience will help your subscription business to:

8. Inflexible With Pricing Options

You should provide pricing options to your customers.

Customers want as much flexibility as possible when paying for subscriptions. You should give your subscribers the freedom to upgrade or downgrade their subscription.

You can even give them the choice to put it on hold. This option will mean that the subscription will be paused for a certain amount of time (instead of the customer churning).

The more freedom you give your customers in pricing, the better your growth. Price your subscription offering correctly to increase customer retention.

9. Failing to Plan for Failed Payments

During your research, you would have come across the fact that failed payments are an inevitable aspect of subscription businesses.

How you plan to deal with failed payments at your launch could make the difference between the survival and the death of not just your product, but your business overall.

The conventional information out there is to use automated software, like Dunning. This means that, when a payment fails, emails are sent automatically to your subscriber. No matter how effective dunning software is, it cannot beat the human touch.

This is where Gravy comes in. Gravy has a proven way of reaching out with empathy to your subscribers whose payments have failed. This protects your brand. We provide a full-time focus and use proven scripts to ensure that failed payments are reinstated as soon as possible.

Try our failed payment calculator to uncover how much revenue you could be losing based on your forecasted number of customers.

10.  A Delay in Charging for Your Products or Services

Waiting too long to charge for your products or services could mean that people on a free trial will be accustomed to using your service for free and may feel reluctant to pay for it.

Also, the longer you take to charge for your product or services, the less time you have to make a profit. Most subscription businesses offer a two-week trial, which appears to be the sweet spot of giving the potential customer enough time to try out the product or service.

11. Aiming for Perfection

As much as it's recommended that you carry out tons of research, over-researching can result in information overload and could lead to inaction.

It's tempting to get everything exactly right before your subscription launch. Although it's important to pay attention to details, focusing on small things that have to be perfect will cause setbacks in your launch.

Remember, the more delays in your subscription launch, the less time you have to get your service or product out there and make a profit. Sometimes, good enough will be fine to launch a subscription business and you can fine-tune as you go.

Not having everything perfect at your subscription launch is useful because you can test while your customers are using your product or service. You could spend time making everything perfect and realize you need to make changes when your subscribers start using your service or product.

Always leave room for improvement. Realize that when it comes to customers, nothing is ever perfect. So, have an attitude of continuous testing, analyzing and improving your product.

Bottom line: Done beats perfect, every time.

12. Not Having Different Versions

Your research should have shown that there will be different segments of customers.

It can be difficult to offer a one-size-fits-all package to all your customers, so you should aim to have different packages for various segments. For example, if you have a subscription box business, offer bundles at different price points for customers to choose from. You can also have core or basic packaging.

13. Being a 'Yes' Person

It can be tempting to want to please everyone when launching a subscription business.

However, to preserve your business and stop yourself being worn out, you need to develop the ability to say “no.”

Sometimes, it's good to get feedback from your customers about what features would enhance your subscription business. But if you say “yes” to every suggested feature, you’ll be eating into your revenue and possibly decreasing your profits.

What you should take into account is how many people are asking for a certain feature. If it's a very small percentage, you may be able to find a cheaper workaround.

Saying yes to every additional feature will make your product or service more complex. This could lead to giving customers having too much choice, which could end up making them feel overwhelmed and result in churn.

Make sure you concentrate on improving the quality of your existing product or service before adding new features. Think about the following before adding features that are suggested by customers:

14. Being Unnecessarily Complicated

This leads on from the mistake above.

Normally, it’s best to keep things as simple as possible when launching a subscription business. The more choice you give a customer, the more overwhelmed they can become.

For example, if you have a subscription box business, try not to give too many shipping options to confuse the customer. Providing too many options could frustrate you because you’ll have to use more resources.

Keep things clear and simple, so your customers know exactly what they're getting and you’ll know exactly how much you'll be spending on each part of your business.

15. Not Paying Enough Attention to Marketing

Part of your research should be about how you will brand and market your subscription business.

Launching a subscription business without a clear brand could make it difficult to acquire new customers because they won’t be able to differentiate you from your competitors.

Part of building your brand involves:

Customers need to be able to trust and identify with your brand even before starting a new trial.

Branding and marketing should be a top priority, which needs a dedicated amount of time, resources and budget.

Customer Retention and Your Subscription Launch 

Avoiding the mistakes above will ensure a more effective subscription launch.

After you spend all your time, energy and resources launching your subscription business, you have to ensure the highest customer retention. This means being proactive when it comes to tackling failed payments.

Think about aligning yourself with a customer retention expert from day one. Actually, even before day one, before you open your subscription business' doors, partner up with Gravy who will keep an eagle eye on failed payments and step into action immediately.

Click here to book your free call today to find out how we can help strengthen your subscription business and grow your revenue by returning failed payments along with your paying customers for months to come.

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