Subscription model brings an idea to life
When Eric Shmuely’s daughter was hospitalized in Long Island, he and his wife took books to read to her to keep her distracted. Shmuely, the owner of a wholesale book business, was surprised to find that his daughter wasn’t the only restless child tired of watching TV. Other children wanted to listen to the stories too. Shmuely was delighted that so many kids were touched by the books, and he and his wife were glad to be a part of it.
“We had the ability to provide the best distraction as children easily fell right into the story their parents were reading to them,” Shmuely said. “That’s how Story Surprise was born.”
Having spent most of his life in the wholesale book business, first with his family and then owning his own business, Shmuely wanted to expand the idea beyond the hospital. He wanted his company to get books into the hands of many more kids inexpensively. The trendy “new” subscription model held a lot of promise for his idea.
It’s not all about the money
Profit was not Shmuely’s primary consideration in creating a subscription book service though. His focus was on improving children’s literacy while building a company that could also be profitable. Over eight months in 2015, the idea would evolve into Story Surprise which did a soft launch in December.
The books typically retail for $15 to $20 each, and include titles like “My First Colors,” “The Kissing Hand,” “The Young People’s Atlas,” and “Return to the Wild Seekers.” In addition to the books, each month’s box includes a special surprise like be a bookmark, a reading certificate or something related to reading that a child might enjoy.
Currently, the Story Surprise team selects books based on the recipient’s age:
The title to be sent each month is always a surprise, which adds to the fun of the program. And, of course, the children get to keep the books they receive.
Each month’s selection is guaranteed. If a book is too difficult or too easy to read, the book quality is poor or if the parent or child just doesn’t like the book, Story Surprise will replace with a classic book from their collection. So far, Story Surprise has only had to replace two books.
Improving children’s literacy, one book at a time
A key component of Story Surprise is the company’s mission to improve children’s literacy by getting books to kids and encouraging one-on-one reading within families. This mission is driven, in part, by research about the value of reading. For example, 34% of fourth graders in this country can’t read a simple, age-appropriate poem, and 1 in 4 children in America grow up without learning to read. Even worse, two-thirds of students who cannot read proficiently by the end of fourth grade will end up in jail or on welfare.
Shmuely wants to help change that, because reading helps children:
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Improve vocabulary
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Enhance attention spans
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Stimulate cognitive development
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Learn about the topics explored in the books
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Explore artistic media and illustration
The monthly books contribute to the company’s overarching mission, but Story Surprise goes beyond that with its philanthropic efforts to share books with kids who need them the most. One way Story Surprise does this is through its “5,000 Books” initiative. To kick off the program, in December, Story Surprise donated 450 books to the Boys and Girls Club in Suffolk County, New York, and this year they have plans to donate brand new, hardcover children’s books to 50 schools.
“Making books accessible to young readers is central to the company’s mission and is rooted in our principles and core values,” said Shmuely.
Story Surprise founder Eric Shmuely delivers books to the Boys & Girls Club in Suffolk County, New York
Why a subscription model made sense
Like many startups, Story Surprise started lean, with a small staff of four – two founders, a marketing director and a creative manager. The subscription model allowed this small company to get started at a lower entry point than even an online store would have allowed. The founders felt like they could start small, with the primary expense being a 60,000-square-foot warehouse filled with books. The recurring revenue, of course, was a big attraction, but so was being able to provide a good value to their customers while working toward an important goal of improving children’s literacy.
Target audience
To fulfill that mission, Story Surprise began its subscription book service by targeting pregnant moms, new moms and work-at-home moms because the Story Surprise team anticipated that the subscription book service would appeal to the two youngest age groups: infant to age 2 and ages 3 to 5. What they’ve found has been quite different though. They have an equal spread of subscribers across all five age groups.
“We were very surprised by that,” said marketing manager Donna Bliss. “We thought those kids would be on their Kindles. It was refreshing.”
For now, the company is targeting mom bloggers and subscription sites like My Subscription Addiction to help them share the news of the new subscription service, and their strategy has been very effective. In December, during its soft launch, Story Surprise only had a dozen subscribers. After working with mom bloggers in February, their subscribers skyrocketed to over 5,000!
“It completely exceeded our expectations,” Bliss said. “But we have a great team and we try to anticipate what can go wrong as we go.”
As a result of these relationships, the company is evolving each month, learning from its successes and its mistakes. The bloggers have been a big part of that education and evolution.
“When you’re reaching out and offering subscriptions, you form a relationship and you’re helping each other,” Bliss said. “Everyone is positive and supporting each other. It’s what makes me get up in the morning.”
Marketing tactics
Establishing relationships with mom bloggers like Suburban Mom and subscription sites like My Subscription Addiction has been very successful for Story Surprise. With established reader and social media bases, the bloggers have built-in, targeted audiences. Story Surprise allowed the site owners to sample their products in exchange for candid reviews. Once the sites posted their reviews of the Story Surprise subscription book service, customer traffic exploded.
“We would get hundreds of orders overnight,” Bliss said. “The influence they have blew my mind!”
Story Surprise hopes to ride that wave into March by participating in National Reading Month and particularly “Read Across America” Day which is March 1.
Another fun way Story Surprise is marketing itself, while also fulfilling its mission, is through its YouTube Channel where it posts fun videos of cool activities related to the books, like creating a clay octopus to illustrate Ringo Star’s “Octopus’s Garden” and reading books like “Mickey Mouse – A Magical Story” to kids. These help engage subscribers as well as non-subscribers, because the online videos are free to watch. In addition to these tactics, Story Surprise has also grown by word of mouth and referrals. It has not had success, however, with paid search or Google Ad Words because the search terms for “children’s books” were generic and encompass a lot of different businesses. It’s all about figuring out what works and doing more of that, while ditching tactics that aren’t effective. Story Surprise seems to be finding its way.
Pricing strategy
The company’s pricing strategy was a critical component to utilizing the subscription model. They wanted to go out with their lowest possible price, so that more families could afford subscriptions. They also wanted to provide a good value, so they included shipping with the monthly cost of the subscription. They felt like $7 a month was a good, low price point with a discount for subscribers who pay annually rather than monthly.
“We went out with an honest, fair and affordable price,” Bliss said.
What they’ve discovered from their subscribers is that people are willing to pay more to get more. When speaking to the mom bloggers, for example, 60% told Story Surprise they could raise their price, add more to the box or add a second type of box.
“We knew that, but we didn’t think we could do that quite so soon,” Bliss said.
What’s next for Story Surprise
In 2016, Story Surprise hopes to grow even further and it plans to continue to tweak its subscription offerings. One goal is to put more focus on curation which, right now, is unisex and based on age. Bliss said they hope to be able to be more gender-specific and offer books based on reading level and specific interests. Story Surprise will also continue outreach to potential audiences and continue its goodwill through its “5,000 Books” program.
Success secrets
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Start out simply with a core product with basic features. Master those before adding new features.
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Curation is really important. Some people are willing to pay more to get more, but ultimately, you have to make the right choice for your company based on your goals.
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Be responsive. It isn’t always possible to respond immediately, but try to whenever possible. Customers are often impressed when you reply after hours. It is a great way to develop one-on-one relationships with customers.
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Expect candid feedback when you ask for it and be prepared to listen. The subscription “junkies” have been working with the sites for years, and they know what core functions, bells and whistles a subscription should have. “Put your armor on, and find out what the customers truly expect,” Bliss said.
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Put limits on promotional offers. Some customers will take advantage, using different email addresses or mailing addresses to get more than one offer. These customers will likely cancel at the end of the promotional period, so prepare yourself by putting limitations on the promotional offer.
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You don’t have to start with a perfect product, but you must be nimble. You have to be able to fix problems quickly. For example, Story Surprised learned that a glitch in their system would allow a subscriber to exit without selecting an age range for their subscription. They fixed that problem as soon as they discovered it.
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It doesn’t matter if your customer is paying $7 or $77, you have to establish a relationship and make sure the customer is satisfied. Treat your customers as if they are spending a lot of money, even when they’re not.
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Realize that starting a subscription company isn’t as easy as you might think. “It’s just not that easy,” Bliss said. “This has to be your passion, and you have to be immersed in it if you’re going to be successful.”
