31 May Secrets to a Successful Auto-Ship Program
When Amazon first announced its Dash auto-replenishment program in 2014, some critics believed it was an April Fools’ joke. However, its success in the subsequent years indicates a shifting trend in ecommerce toward a consumer-driven supply chain.
Subscription-based services and auto-shipping are not new practices, but they have become easier and more convenient to implement, even for smaller retailers in the spa industry. Learn the secret to how you can turn your hot tub chemicals and accessories into consistent cash flow throughout the year.
Learning From Online Conglomerates
For most independent spa dealers, online retailers like Amazon and Walmart are among the goliaths that hurt small business. However, there are lessons to be learned from these giants, especially when it comes to providing convenient shopping experiences to a wide consumer base.
For example, Amazon’s Dash program allows consumers to push a button to automatically replenish certain household goods, such as laundry detergent, pet food, and paper towels. The items are instantly charged to your Amazon account and shipped to your door. Consumers no longer have to search for the products they regularly use; rather, they simply reorder as needed.
The most revealing aspect of Amazon's success is how it has tapped into consumer behavior. Whereas before, most shoppers would seek the lowest prices, they now seek convenience.
Most independent retailers do not have the resources to replicate such a technologically involved program; however, you don’t need kitschy Wi-Fi enabled buttons to implement a profitable auto-ship program. The most revealing aspect of Amazon’s success is how it has tapped into consumer behavior. Whereas before, most shoppers would seek the lowest prices, they now seek convenience.
The first step toward a successful auto-ship program is getting your customers on board. At first, many won’t think to ask. However, once you explain the convenience and cost benefits of having necessary items shipped directly to their homes, perspectives shift. Every hot tub owner requires a certain amount of product every year for maintenance and upkeep. Auto-shipment programs ensure they purchase these items from you.
Accessories and chemicals provide enough of a profit margin for independent retailers that they have the potential to play a large role in sustaining and growing your business. When you have the option to repeatedly sell these items to customers, you can maximize your revenue stream. In other words, the convenience of auto-shipping is two-fold. On the one hand, your customers do not have to worry about ordering the products they need; on the other, your business generates more recurring transactions to help with cash flow.
When you have the option to repeatedly sell chemicals and maintenance products to customers, you can maximize your revenue stream.
Be aware that with added convenience comes decreased foot traffic. Some retailers experience lower in-store sales as a result of auto-shipping programs. While much of these lost sales can be made up through auto-shipment purchases, they do reduce the potential for impulse buys. However, the auto-ship program serves as a key relationship builder with owners of hot tubs that may be older or need replacement at some time in the future, putting your business front-and-center on the customer’s radar when it comes time to buy.
Obviously, not all products you sell qualify for auto-shipping. As much as you would like, consumers are not going to replace their hot tubs every year. However, they do need to change filters and chemicals every few months. When deciding which products to include in your auto-ship plan, ask yourself, “Which items do all customers need to purchase again?” Typically, these will be the chemicals and accessories you sell every day, including:
- Chlorinating shock
- Test strips
- Spa cover cleaner
- Fragrance crystals
Multi-item kits or packs that combine products around a single purpose or goal may be a more efficient way to turn auto-ship inventory. These options could include start-up water care kits, sanitizer packs, clarifier packs, and balancing packs.
While you can just offer ala carte ordering, retailers may prefer to offer a tiered auto-ship system, where each tier provides different products, benefits, and shipment frequency at different price points. Depending on your customer’s budget and needs, they can opt into the program that fits best.
It’s worth noting here that this kind of in-house order processing and shipping requires manpower. For many retailers, this means pulling a salesperson from the showroom floor or bringing on new help. Though logistically the auto-ship has the potential to increase operating and labor costs, when effectively implemented, the increased sales should offset the higher expenses.
Promoting Your Auto-Ship Program
Success of any auto-ship program depends on the level of commitment applied to ongoing promotion of its value to prospective customers. A great time to introduce your auto-ship program to customers is right after the completion of a hot tub sale. At this point, you can offer your program as a package incentive or add-on. Remind customers they will need to purchase certain items every few months as a part of regular maintenance.
The timing is advantageous because you’ve already established a business relationship with these consumers, making them more likely to purchase supplies and accessories from your store rather than seek them out from competitors or other vendors.
Success of any auto-ship program depends on the level of commitment applied to ongoing promotion of its value to prospective customers.
Aside from the spa sale itself, you can promote your program by reaching out to previous customers on your mailing list. Their demand for hot tub supplies hasn’t dwindled while their demand for convenience, along with the rest of civilization, has increased.
Information about your auto-ship program is ideal content to include in your lead nurturing efforts, whether it be through emails, newsletters, blogs, social media, and/or your website. In-store, promotional signage about the program should be displayed and sales staff should be trained to introduce the option to walk-in traffic who bee-line to the chemicals shelves (and perhaps even mentioning it in their hello when answering the phone). And don’t forget to include a printed flyer in your closing packet!
Any communication should provide a list of program options while speaking to their convenience in ongoing spa maintenance. Here’s an example:
Thank you for your recent purchase. We are dedicated to making your spa ownership the very best experience possible, and to that end, would like to tell you about our new Auto-Ship Program. With Auto-Ship, you’ll be able to save time and spend less on your hot tub products and accessories. Our program is designed to automatically ship your maintenance items when it’s time to replace them, saving you the time and hassle of having to come into the store to replace them yourself. You’ll also be able to save money thanks to our free shipping offer and automatic prepaid discounts when you sign up for the Auto-Ship service.
Price incentives are one of the most effective ways to push auto-shipping programs and subscription-based transactions. Consumers are more likely to sign up if they know they’re receiving a discount or freebie. For instance, some auto-ship programs include a 5-10% discount off of the individual retail price. Others include product incentives, such as free test strips with your order. While some smaller retailers are hesitant to lower prices, if it increases the number of guaranteed sales each year, then it’s worth it.
Implementing a successful auto-ship program presents a lot of potential for small and medium-sized spa companies struggling to compete against the online behemoths. While the programs come with their drawbacks, as all sales incentives do, the increase in confirmed sales outweighs many of the risks. With auto-shipping, you can reach prospective hot tub customers while offering a convenient service to delight those who have already purchased a spa from you.