We all agree that the subscription marketing is chaotic right now.

 

Because of this, brands are looking for new ways to add, retain and maximize value from every subscriber. Current marketing and distribution platforms do a great job of providing consumer reach but come with some serious downside as well, creating a double-edged sword scenario for many brands. We have to use them to be seen, but it’s also eating away at the profits on each sale and lowering the LTV of each subscriber.

How are marketing and distribution platforms eating away profits?  

1. Algorithms: Brands spend a lot of resources to gain optimal positioning from the constantly changing algorithms. 
2. Cannibalization: They promote the competition as a replacement directly to a brands existing subscribers.. 
3. More Cannibalization: They promote lower cost options of the same service to brands' existing subscribers..
4. High fees: Whether CPC or high revenue share, fees drive up CAC and reduce profits. 
5. Lack of control: Brands have no control over the buying process and can easily lose out on new revenue streams. 

So why do we use them? Despite the negatives, they offer a huge audience and provide some decent targeting tools. 

Alternatively, many brands are learning to work together to create their own solutions that maintain the benefit of reach and targeting, while removing the downsides mentioned above.

Subscription brands have been partnering up for a while now to create their own reach, targeting and pricing optimization strategies via bundling, cross promotions, or other collaboration initiatives.After realizing the marketing, retention and profit maximization benefits of collaboration brands are now taking this a step further and becoming their own marketplace for their subscribers. Letting their subscribers purchase exclusive deals from other services directly from their own marketplace (and selling subscriptions on other brands' marketplaces) is taking bundling to the next logical level, here's why. 

Brands that collaborate via their own marketplaces can:

• Create a customized marketplace for their subscriber’s experience, promoting some brands and suppressing others.
• Offer their subscribers the ability to stack and save with discounts all tied directly to the selling brand's subscription. 
• Sell their subscriptions to highly targeted consumers at personalized price points on the marketplaces of other brands. 
• Prevent cannibalizing their own subscribers with lower prices on their own subscriptions.
• Prevent cannibalizing their subscribers with alternative,replacement services.
• Sell promotional space to monetize the marketplace even further. 
• Create contingent pricing based on how much consumers are spending elsewhere.
• Collaborate and cross promote without headaches of contracts, fixed prices.
• Sell every consumer their subscription at the maximum value point for them. 

When brands own their marketplaces, everyone wins. Brands get more subscribers, keep them longer and maximize the LTV. Consumers get to stack, save and manage all their subs right from their favorite subscription brand. Brands make more money on every sale and share some of those savings with loyal subscribers. Win-win.

Marketing and distribution platforms aren’t going away any time soon, but having another channel, owned, and controlled by your brand, is a great way to extend your marketing and retention strategy and optimize revenues on as many subscriptions as possible. 

How are brands creating their own marketplace to improve retention and distribution and profit maximization? Check out Subsuite.io and find out.