Subscription-based business models have become a central pillar of the modern eCommerce landscape, driven by changing consumer behaviors and the increasing desire for convenience. Whether it’s curated product boxes, media streaming, or recurring deliveries of everyday essentials, subscriptions offer several distinct benefits to businesses. For instance, they create predictable revenue streams, build customer loyalty, and generate valuable data about customer preferences. These advantages have led more and more Shopify store owners to explore integrating subscription capabilities into their eCommerce operations.
However, despite the popularity of subscription-based services, many off-the-shelf subscription apps available on Shopify are not fully equipped to handle the diverse needs of most businesses. These apps typically offer limited features, rigid billing cycles, and lack the sophisticated capabilities required by growing brands. For instance, businesses often face issues with billing cycles, customer segmentation, failed payment handling, and marketing flexibility.
In this article, we will explore the journey of creating a custom Shopify subscription app for an eCommerce store, EcoBox, which sells eco-friendly, sustainable household products. We’ll discuss the challenges faced by EcoBox with their off-the-shelf solution, the development process of the custom app, and the results after its implementation. By diving deep into this case, we aim to showcase why investing in a custom Shopify app can be a game-changing decision for serious eCommerce brands looking to scale their subscription models.
The Client’s Challenge
EcoBox is an eCommerce business that specializes in eco-friendly and sustainable products delivered to customers via subscription. Their product range includes reusable bags, organic cleaners, and a variety of other eco-conscious household items. EcoBox’s mission is to promote sustainability through recurring deliveries, and it seeks to provide an easy and convenient experience for their customers.
Initially, EcoBox relied on a generic subscription app from the Shopify App Store. While the app was quick to install and relatively affordable, it became apparent that it couldn’t meet the store’s evolving needs as it grew. The off-the-shelf solution had several critical limitations that hampered EcoBox’s ability to deliver a truly personalized and customer-centric subscription experience.
Key Challenges Faced by EcoBox:
- Inflexible Billing Cycles:
The biggest challenge for EcoBox was the rigid billing options provided by the generic subscription app. EcoBox wanted to offer customers the flexibility to choose from different billing cycles monthly, quarterly, or semi-annual subscriptions. However, the app only supported a fixed, monthly billing cycle, which didn’t align with customer preferences. EcoBox’s target market, consisting of environmentally conscious consumers, preferred the ability to select delivery intervals based on their needs. For example, some customers preferred receiving their products monthly, while others preferred a quarterly or semi-annual delivery schedule. This lack of flexibility was a major hurdle.
- Limited Customer Segmentation:
EcoBox’s marketing team wanted to run targeted promotions for specific customer segments. For instance, they aimed to offer a 10% discount to customers who committed to a six-month subscription or reward loyal customers with special offers. Unfortunately, the existing subscription app lacked any meaningful customer segmentation features. This meant EcoBox couldn’t personalize their offerings or tailor their promotions to customers based on their subscription behavior. They needed a solution that would allow them to segment customers by various factors such as subscription length, order frequency, or loyalty.
- Ineffective Payment Recovery for Failed Transactions:
Like many subscription-based businesses, EcoBox encountered an ongoing problem with failed payments. Many customers’ payment methods failed due to expired credit cards or insufficient funds. In such cases, EcoBox wasn’t equipped with an automated system to handle failed payments effectively. Customers were not notified about failed transactions, and the business struggled to recover revenue that was lost due to failed payments. This resulted in significant churn and revenue loss, which was exacerbated by the inability to address these issues promptly.
- Inflexibility for Marketing Campaigns and Experimentation:
EcoBox’s marketing team wanted to experiment with different pricing strategies, run A/B tests, and launch tailored promotional campaigns based on customer responses. However, the off-the-shelf subscription apps didn’t provide the level of flexibility needed to run these types of marketing experiments. Without the ability to easily test various subscription offers or promotional campaigns, EcoBox’s marketing efforts were constrained. They needed a platform that could help them quickly adjust their pricing or offers based on real-time customer data.
Given these pain points, EcoBox decided that a custom subscription app was the only viable solution. A tailored app would allow them to address their unique challenges, provide a better customer experience, and scale their subscription model efficiently.
Planning the Custom App
With the challenges clearly defined, EcoBox’s team began working with our development team to create a custom subscription app that would address their specific needs. The next step in the process was planning and gathering requirements, which involved close collaboration between EcoBox’s business team and our development team to outline the features and functionality that would be needed for the app.
Key Features and Requirements for the Custom Subscription App:
- Flexible Billing Options:
The custom app needed to support multiple billing cycles, including monthly, quarterly, and semi-annual plans. Customers needed to have the ability to choose their preferred billing frequency, ensuring that EcoBox could accommodate different customer preferences.
- Advanced Retry Logic for Failed Payments:
To reduce churn, the app needed to include advanced retry logic for failed payments. This logic would automatically retry payments at specified intervals, such as 24 hours, 72 hours, and one week. Additionally, automated email notifications would be sent to customers to remind them to update their payment details in case of failed transactions.
- Customer Segmentation:
The app needed to allow EcoBox to segment customers by behavior. This would enable EcoBox to offer personalized promotions, such as discounts for long-term subscriptions or rewards for customers who referred others.
- Automated Promotions:
The app was required to support the automated application of discounts and promotions based on specific criteria, such as subscription plan type or the customer’s subscription start date. This feature would help EcoBox run promotional campaigns without manual intervention.
- Comprehensive Analytics:
A dashboard with detailed reporting capabilities was required to track key metrics like churn rate, LTV, CAC, and conversion rates. These insights would help EcoBox make data-driven decisions to optimize their subscription offerings and marketing strategies.
- Security and Compliance:
Given the sensitive nature of subscription-based transactions, the app needed to be fully compliant with security standards such as PCI DSS. All customer data, including payment information, would need to be encrypted to ensure privacy and security.
Building the App
After freezing the requirements, EcoBox and our development team started developing the custom app. The technical implementation was segmented into several phases:
1. Shopify API Integration
To manage the subscription billing, EcoBox’s custom app was connected with Shopify Billing API and Subscription API. The Subscription API enabled the app to control recurring payments: from creating, changing, and canceling subscriptions. The Billing API provided secure processing of payments and the ability to automatically process the recurring payments exactly when they needed to occur.
2. Building the UI with Shopify Polaris
Shopify Polaris, which is the design system that Shopify offers for building apps, had been selected for the user interface. Polaris ensured that the app’s UI would mimic the Shopify admin dashboard thus providing a seamless user experience.
3. Advanced Retry Logic and Payment Recovery
Our team deployed the advanced retry logic for failed payments using Shopify’s Billing API. The app automatically retried payments at 24 hours, 72 hours and a week ensuring that payment failures were handled without manual intervention. Additionally, automated email reminders were sent to customers, informing them of the failed payment and a payment details updating link.
4. Implementing Security and Compliance
Data security was high in the priority list for EcoBox. Our team made sure that the custom app that they developed was fully PCI DSS compliant with Shopify and all sensitive customer data had been encrypted including payment information. This compliance ensured that customer transactions were secure and with a minimized risk for breach.
5. Analytics and Reporting Integration
In order to enable EcoBox to have insight on customer behavior and issues related to customer subscriptions, the app came with a dashboard with advanced analytics. This feature presented comprehensive reports on churn rates, LTV, customer acquisition cost (CAC), and the effectiveness of promotions. EcoBox’s marketing team were now armed with the data that they required to improve their offering.
Results After Launch
After the custom subscription app was launched, EcoBox saw a remarkable improvement in several key business metrics. The flexibility in billing cycles, combined with advanced payment recovery features, contributed to higher customer retention, improved LTV, and reduced churn.
Key Metrics After Launch:
- 18% Increase in Customer Retention:
With the ability to offer flexible billing cycles and automatic retry logic for failed payments, EcoBox was able to retain more customers who would have otherwise canceled their subscriptions due to rigid payment schedules or missed payments.
- 25% Increase in LTV (Lifetime Value):
Personalized offers and loyalty rewards helped increase the average revenue generated per customer, resulting in a significant boost in customer lifetime value.
- 10% Reduction in Churn:
Automated payment retries and email reminders reduced the number of lost customers due to failed payments, directly contributing to a decrease in churn.
Lessons Learned from Custom App Development
Building a custom Shopify subscription app provided several key takeaways that other eCommerce businesses can learn from:
- Scalable Architecture:
As EcoBox’s business grew, it was crucial that the app could scale to handle increasing transaction volumes. Our team ensured that the app’s architecture was flexible and capable of scaling with the business.
- Customer Data Drives Success:
One of the standout features of the custom app was its ability to segment customers based on behavior and provide personalized offers. This data-driven approach helped EcoBox build stronger relationships with customers, which led to higher engagement and improved retention.
- Ongoing Testing and Iteration:
Even after the app was launched, EcoBox continued to run tests and experiment with new features, such as changing pricing plans and offering seasonal promotions. The flexibility of the app allowed EcoBox to adapt and optimize its subscription model in real-time based on customer feedback and data.
Conclusion: The Power of Custom Solutions in eCommerce
Building a custom Shopify subscription app was a transformative decision for EcoBox. Not only did the app solve the limitations of the off-the-shelf solutions they had been using, but it also opened new possibilities for growth, customer engagement, and revenue generation.
For businesses that are serious about building and scaling their subscription models, investing in a custom Shopify app can unlock significant benefits. From flexible billing and payment recovery to advanced customer segmentation and analytics, a tailored solution can provide the functionality needed to meet unique business needs and customer expectations.
If you are ready to elevate your subscription model and need a custom solution to match your business’s specific needs, We offer at Performantcode.io a free consultation to discuss how we can help you create the ultimate subscription experience for your customers. Let’s work together to turn your vision into reality.
