7 Lessons from Innovative and Creative Subscription Companies

Subscription and membership-based companies are springing up everywhere – some will succeed while some will fail. Dana Neuts takes a look at three companies

Subscription and membership-based companies are springing up everywhere, offering us everything from web TV and software-as-a-service to productivity tools and beauty-in-a-box. Some companies will succeed, but many will fail. To be successful in the subscription economy, companies must be innovative and creative. Here are three companies taking a fresh look at subscriptions: MathCrunch, CubeForme, and Heyday.

MathCrunch: Mobile Tutoring for High School and College Students

MathCrunchIf you’ve ever fumbled your way through an algebra, geometry, or calculus problem, you’ll appreciate the genius behind MathCrunch, an on-demand mobile tutoring app that pairs high school and college students with qualified tutors.

After students sign up, they take a photo of the problem they’re having, and submit it through the mobile app. They are then paired with a tutor who sets up a mobile chat session to help the student through the problem. The tutors don’t give students the answers to the problems, but they help the students figure out the answers.

Students can pay as they go at a rate of $0.49 a minute, or they can purchase 60, 120 or 240-minute plans, at discounted rates, ranging in price from $23.99 to $79.99 per month. Note: These are back-to-school prices, and may change after this article is published.

Students can purchase minutes, but they can also earn additional minutes for free by referring friends or sharing the app the friends via social media.  MathCrunch vets the tutors ahead of time, and tutors who make the grade are paid by the minute for helping students.

According to a May 2015 article on TechCrunch (no relation to MathCrunch), at that time, MathCrunch had held 100,000+ tutoring sessions, and had raised $3.5 million in funding.

CubeForme: 3D Printing in a Box

cubeforme3D printing seems like an unusual choice for a subscription product, but that’s not stopping Kyle Pham and Nick Nguyen who created CubeForme, a Kickstarter-funded project that offers a monthly box of fun and functional 3D printed items to subscribers, reports 3Dprint.com.

On Kickstarter, the founders describe their product as a monthly subscription service for 3D printing enthusiasts, novices and everyone in between. If fully funded, the company will offer a hands-on 3D printing experience to subscribers each month, as well as providing entertainment, insight, and the opportunity for immersion into the 3D printing ecosystem.

“With boxes that are filled with the innovative work of a particular 3D designer, CubeForme emphasizes unique and meaningful experientialism. Every order supports 3D designers, and ultimately the 3D printing culture as a whole. We keep the exact content of each month’s box a mystery until the end of the month, but you always have the caveat of knowing the designer beforehand,” say the founders on Kickstarter.

Here’s how CubeForme will work:

  1. Each month one or more 3D designers will be featured, and potential subscribers will learn about each designer’s story and style.
  2. If a potential subscriber wants to support a particular designer, they select that designer and subscribe to that month’s subscription box for $9.99, plus shipping and handling. 10% of the subscription cost will be paid to the featured designer as commission.
  3. At the end of the month, the subscriber will receive a box of 3D printed materials, ranging from fun to functional, created by that designer.

CubeForme has a detailed, well thought out plan with a specific timeline and deliverables, including a tiered rewards diagram for supporters. As of October 4, 2015, the project had 61 backers who have pledged $2,035 of $5,000, with 25 days to go.

While we applaud the ingenuity of CubeForme, we have two primary concerns: 1) What happens if the project isn’t fully funded? Will the developers abandon the project or seek out other funding sources? We hope not. Pham and Nguyen may be onto something, and they’ve clearly spent a lot of time mapping out their plan. 2) The 3D printing market is a nascent market, and it is hard to determine what demand will be.

Heyday: Membership Replaces Loyalty Program

HeydayCompanies like Birchbox and Sephora have jumped on the beauty box bandwagon, but smart spas and salons refuse to be left behind. They, too, are shifting away from loyalty programs to try subscription models, says Skin Inc.

Heyday, a New York City-based skincare salon, has found a way to help its clients make skin care easy and also priority by adding facials to their regular beauty regimen.

To make this dream a reality, Heyday has created a three-tiered membership:

  1. The Alternating Monthly: For $74 a month, members get alternating monthly treatments, a 50-minute facial one month, and a 30-minute facial the next. Annual savings: $42
  2. The Monthly 50 Minute: For $89 a month, members get a 50-minute facial every month to reset and refresh they skin. Annual savings: $72
  3. The Double Monthly: For $139 a month, members get a comprehensive, 50-minute facial each month, as well as a 30-minute refreshing facial per month. Annual savings: $192

All three membership tiers include enhancements at $5 each, and 10% off products and additional treatments. The only thing we don’t like about this program is that you can’t join online. While there is a Join button on the website, it doesn’t work. Users are instructed to leave their email address instead. This will reduce the conversion rate. We recommend they fix this right away!

Insider Insight:

We love the creativity and innovation of all these ideas, ranging from the shoestring start-up to the million-dollar-funded firm. These companies have found unfulfilled niches, and we can learn from their experiences, both good and bad. Here are 7 lessons we can learn from these subscription and membership-based companies.

  1. MathCrunch: Find a need and fill it with an affordable, easy-to-use product or service.
  2. MathCrunch: Put your product or service on a platform users are comfortable with, and fuel your growth by rewarding users for sharing your subscription product or service via social media.
  3. CubeForme: Be a visionary. Take something new and exciting, and deliver it to those who are curious and want to support the art of 3D printing.
  4. CubeForme: Be transparent about how you plan to fund your project and fulfill your promises to backers. Include a detailed timeline, budget, and specific deliverables, so backers have a good idea what to expect and when.
  5. CubeForme: Don’t be afraid to test unknown markets on a smaller scale to see what demand will be for your subscription product or service, no matter how “out of the box” your idea is.
  6. Heyday: Create value for your customers by rewarding them for consistent use of your product or service.
  7. Heyday: Don’t take the chance of losing an interested customer. Make it easy to sign up for your service online or on the go. 

Dana Neuts is a Contributor to Subscription Insider. 

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