Posted: George Hancock Jr. | April 30, 2015

eCommerce Software

Should you require a subscription gate before customers can shop?

I think the most powerful advantage of mandated subscription shops is the ability to differentiate yourself from the classic e-commerce model. That model requires you to price low or advertise well in order to sell, at least the first time you sell. Requiring a subscription before the customer can shop allows you to explain who you are and what advantages you provide easily, because consumers want to know before they subscribe. Not only do you get a chance to quickly transfer your image and advantages to consumers, your targeting work gets done for you. That's because anyone who doesn't want what you offer won't sign up. Think of your store as designated designer area in a department store, like a Tommy Hilfiger section. Shoppers can easily get an idea of what's going on there and choose to visit or not. For an e-commerce shop, it's the same as long as your ads, landing pages and homepage are effective.

A related advantage of subscription gates is your bargaining power when asking a customer to subscribe. Imagine that you're wandering around on Facebook when you see an ad for the coolest shoes you've ever seen. You've never seen anything like them, anywhere, but they're perfect! You click the ad and you're directed to a sign up page. Are you going to close the window or sign up? If the advertiser reads you right, he has a lot of leverage to use to coerce you to sign up. Then, of course, you're in the loop and you'll probably get emails soon.

There's also the option to differentiate yourself by offering a new kind of consumer experience, like Five Four Club did. Visit their site, tell them about your style and receive outfits each month. It's not even shopping, which is great for many of us. Obviously, Five Four Club wouldn't be possible without subscriptions. So, it doesn't really count as a mandatory subscription system. Nevertheless, it's an effective usage of subscriptions.

You don't have to remain a subscription-gated shop forever. Take Jack Threads for example. It was advertised heavily on Facebook using the "so cool and unique" tactic I explained above. Now the store is available without registering. You can modify your system as they did, based on your strategy. The key is to attack your target market first, or risk a competitor taking it over completely.

These are just a few of the advantages of subscription gating. There are, of course, disadvantages as well. What kind of model is best for you?


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Written by George Hancock Jr.

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