Spencer Forrest uses online subscription campaign for hair-raising results

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Spencer Forrest, a provider of hair-loss treatments, wanted to keep customers happy, and encourage them to become repeat buyers. Shoppers who sign up for regular deliveries of the company's hair-thickening Toppik products, or its baldness-concealing Couvre line, spent an average of $802 on Spencer Forrest products over the past three years. Regular customers who were not members of any program spent only $302, said the company. Consumers who signed up for the company's program continued ordering for an average of 28 months, compared to an average of 14 months for non-subscribers.

Yet despite the clear advantages of converting customers to a formal continuity plan, Spencer Forrest had yet to unroll an online subscription initiative by the end of last year.

“There was a lot of money being spent on getting traffic, but little for lifetime value and keeping customers coming back,” said Mark Kress, CEO of Spencer Forrest.

Challenge: The hair-loss treatment retailer sought to move its continuity program online.

Strategy: After a few unsuccessful attempts to get an online continuity campaign up and running, Spencer Forrest reached out to online marketing company OrderGroove at the beginning of this year. The two sides moved quickly, and within 30 days, Spencer Forrest was promoting special subscription offers to every person who placed an order through its website.

Once the initial subscription promotion launched, OrderGroove worked with Spencer Forrest to refine the offer, testing whether a 10% discount or free shipping generated more conversions. The company also compared the effectiveness of placing the promotion after an order compared to just before, as well as whether a red or blue arrow in a particular pop-up ad had greater impact.

“We were testing a sign up of ‘30 days,' versus ‘one month,' versus ‘four weeks,'” said Greg Alvo, founder and CEO of OrderGroove. The technology vendor sent these metrics back to Spencer Forrest to help the company make quick decisions about how to market the continuity program in ways they couldn't when only offering it by phone or mail.

Results: Spencer Forrest and OrderGroove continue to measure and adjust online subscription marketing, but results are already substantial. Conversion rates through mail order and by phone were historically less than 1%, but the company recently achieved an 11% conversion rate for online customers. In the nine months that Spencer Forrest has worked with OrderGroove, the number of continuity program members has increased by nearly 50%.

Kress plans to expand special offers for continuity members, thanks in large part to the extra business subscribers bring in. He will also use the online data to refine his subscription marketing.

“We've never really been a discounter, but continuity has allowed us to discount without discounting,” said Kress. “This has just been a real change in so many respects to my business.”

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