177: Year-End Review of My Subscription Box Business

Wanna take a little behind-the-curtain walk with me through the year with my subscription box business? Well, you're in luck today because I'm bearing it all for you. What worked, what didn't, from my wins to what the heck happened. Come join me for a look at the year in my subscription box business now.

Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. And now here's your host, Sarah Williams.

Welcome back to the Launch Your Box podcast. I've got a special episode for you today. I had fun looking back at the year and analyzing kind of the complete picture of my business. And I'm here today to tell you the good, the bad, and I'm not going to say ugly, but what I learned from this year. And as I go through this podcast episode and you're listening, I really want to challenge you to do the same in your own business. I want you to look at the things from a whole year's perspective, the way that I'm doing on this podcast. You're going to hear it. I don't want to like overshare at the beginning, but you're going to see the emotions that I went through over the year. You're going to see the ups and downs in the business. I just want you to be able to analyze your own business in this way as well. I was listening to this podcast, a friend of mine had shared this podcast with me. It's the Ed Mylett Show, and he was talking about making a million dollars. And in that, he really broke down that generating 7 figures in your business is a really big deal. To do that consistently for the last 5 years is incredible, especially with all of the economic changes that we have, we have been through. He said, and I want you to think about this too, he said that only 5% of the population actually makes $290,000 or higher in a year. I want you to let that sink in for a minute, okay? I listened to this whole episode and I kept thinking that, wow, not only have I generated 7 figures in my business, I have consistently done that for the last 5 years. And to think that I am in that 1 percentile doesn't feel real to me. And what I really get from listening to this podcast is how being an entrepreneur really allows you to be the creator of your own destiny. And it's not without its ups and downs and highs and lows, but if you don't take the risk, there is no reward. It's not all glamorous like the internet makes it seem. You know, I don't know how many times you've seen me up against a Lamborghini or coming out of a private jet. Never. That's what people like to make it look like. They like to make it look like it's all about these things that you acquire over time, but they don't really show you all the hard work that goes into our businesses, all the blood, sweat, and tears that happens for years before you're even successful. Those years that nobody sees, those years that you wonder if all these hours you're putting in are actually worth it. All those years of, am I crazy for doing it, for being an entrepreneur? I could just so easily go get a 9-to-5 job, collect a paycheck, and be done. But if this is the dream that you've had, if this is the life that you want, there's no better time than now to do it. We, we can continue to put this off for whatever reason, whatever reason you put in your head, like the economy's bad, I shouldn't do this right now, I don't have extra funds, I don't have extra time. If you're giving yourself those excuses, it's never gonna happen for you. The time is now. Now is when we need to make progress. Now is when we need to start building momentum. Because when you look back in a year from now, or when you look back in 6 years from now, your life can be completely different if you start now. In this podcast, you're gonna hear all the challenges that I have been through this year, the struggle, the doubt, and also you're gonna hear the wins. And I hope it encourages you not to feel alone in this entrepreneurial journey because sometimes it really is a lonely feeling. And that's what I love most about this incredible community that we have inside Launch Your Box because I never feel alone. I never feel alone in those wins because sometimes when you have wins, people don't celebrate with you. I never feel alone when I have the struggles because there's somebody out there struggling too. And so I want you to just listen to all the things that have happened this year for me with my e-commerce business. I don't want you to feel alone. I want you to understand what a business like this takes and what you're going to go through on an everyday basis. Okay, so let's get into it. Now, what business I'm talking about today is Framed. It's my e-commerce business, and I have the Monogram Box, the T-Shirt Club, and Tees for Teachers. Those are my 3 subscriptions, and they are all monthly. Now, these subscriptions account for 75% of my monthly revenue. Revenue that is recurring, revenue that I can count on every single month. And we know in product-based businesses that it's either feast or famine. Like, there's not a lot of counting on money just to hit your bank account unless you're showing up and selling all the time. So this recurring revenue is super, super important, okay? Now let's go back to the beginning of this year. The year started off really slow for me. And when I look back at January, I can see what happened. I took my eye off the numbers and it cost me for the rest of the year. Okay, looking at it now, after I'm not in the middle of it, but looking on the outside, looking back in, it makes me realize that I have to plan for January before I end the holiday season, or I'm gonna be right back where I was last year. I was tired. I was exhausted from Q4. I was working on Launch Your Box things and it showed, my sales showed. My January one-off sales were down 39% over last year and my new subscriptions were down 6%. The thing that's saving me was my retention rate was at a 94% on my subscriptions. And so my sales were just dramatically down, And what happened is I let that go a little too long. Okay. I started the year off with an intro offer. What I call an intro offer is an introductory offer to my subscription box. Some people do like a $10 off your first box. Some people do like half off your first box, but I like to do products. I don't like to discount my subscriptions. And so I was giving away a free sweater. Sweatshirt, and I just knew this was going to be successful. Okay, so I was running ads for my subscription box with a free monogram sweatshirt in their first box. Y'all, I sold 16. I sold 16. I spent a lot of ad dollars, and I finally gave up on this promotion at the end of February. It was failure. It did not work. I spent a lot of money to give away 16 free sweatshirts to acquire some new subscribers. And then sales continued to be slower over the next few months. And I was so focused on all the things I had going on for Launch Your Box, and I really let this fly under the radar for me, and I didn't take action on it because I really didn't— I didn't understand the magnitude of it because I kept— I got my eyes off those numbers. I cannot get so busy from month to month that I lose sight of those numbers again. That was a detriment to me, and I drug it through the entire year, this deficit that I made in this first quarter. I knew I needed to launch. In April, we put together a launch plan that had 2 free bonuses, okay? One for our t-shirt club subscribers and one for our box subscribers. And these bonuses were inexpensive. I think the t-shirt cost me around $5, and the cute little zipper pouch that I put in the box cost me maybe $3. This was a small investment into my business that was about to give me a big return. It gave me something exciting to talk about. It gave them a reason to subscribe, and it was fresh and fun, and that's what I needed, like an infusion into my business. I needed something fresh and fun and exciting to get people's attention and to get my numbers back up. And it did. We added over 400 new subscribers in a few days doing my launch-style promotion that I teach you inside Launch Your Box. It was fabulous and I was so excited. I was like, okay, this was the lift that we need. But I often get asked if I have a lot of cancellations when I give a free gift like that. And I didn't. My retention rate stayed at 94%. For the next several months. It only dipped to 93% over the summer, but it worked, and I got some great new subscribers from this spring launch. Now the goal was to maintain the growth. I just had to have a plan to refill the bucket as I had people cancel, because 6% churn on thousands of subscribers is still a lot of cancellations every month that I needed to plan to fill. This new wave of subscribers was also helping my one-time sales. After being down for 3 months consistently, I was finally meeting those sales goals from the previous year, and I was making up some of that deficit that I had incurred in that first quarter by not paying attention, basically. I decided to use some of that excess subscription inventory from the first quarter and put together some SLO offers. I talk about SLOs frequently, so if you haven't heard me talk about them, an SLO is a self-liquidating offer. And that means that the money that I spend or the profit that I make, the money I make goes back into ad spend. So this ad is just self-liquidating, okay? The goal here was to target cold audiences, make this feel like one of my subscription boxes. So these SLOs were little bundles. They had like 3 items in it. Okay. And so I wanted to make it feel like one of my subscription boxes so that I would target and really get interest of someone that would want to be a future subscriber and then keep liquidating my profits back into ad spend. And the goal was to get rid of the extra product that I had from my subscriptions being down, get my cost back on that product. And find some brand new customers that I could potentially turn into subscribers. And that's where we have to align these SLO offers because we could put an offer out there that doesn't match our subscription boxes, it doesn't match what we're known for, and it's really not going to align with getting someone to be a subscriber. So these little bundles would be maybe a piece from the January box and 2 pieces from the March box, and I bundled them together. and I put a, you know, $39 price point on it, and I was targeting cold audiences. Okay, so that's really what was happening, and I sold hundreds of SLO bundles. And when I would sell out of one product bundle, or if it was like a sweatshirt or a long sleeve and the season changed to summer, I would just introduce another bundle. Okay, and I would target those cold audience, and I was just amazed and excited about how many first-time purchasers I was actually getting to my shop. And that really helped me. It helped me because while I'm really big on list building and I list build 365 days a year, these are actually people buying from me. They were going to buy a physical product from me that was very similar to my subscription boxes. They were going to have an opportunity to get it quickly, and hopefully they loved the quality of their product, of the products that they bought. So that was really the main goal and it was working all year long. It's still working right now as I'm speaking. Okay. So over the summer months, I was kind of up and down subscribers. I'd be up 50, I'd be down 50, I'd be up 50, I'd be down 50. So I was up and down about 50 subscribers all summer, but was maintaining for the most part. And that felt really good because summer seems hard sometimes, but I really wanted some growth this year. So I put a few strategies in place. I really wanted to try that intro offer again because some of my mastermind students had set up intro offers and they've been having a lot of success with theirs. And so I really wanted to try it again with a different offer. Maybe they didn't love my first offer. So I wanted to try again with something else. And I think that's something that great entrepreneurs are good at. I would say would do, are good at. But when something doesn't work, it's not that that strategy is bad. It could be the offer, it could be the product, it could be the messaging. So it's great to try things again. And I was going to try this again in hopes that it worked. But if it didn't work, then okay, I learned. I won't do that anymore. I'll put my focus somewhere else. So I tried it again with a free Tumblr this time. Now remember I told you that I was giving away a free sweatshirt in the first intro offer. It was going well. It was actually going so much better than the one that I had tried in February, and I was seeing like 3 to 5 new subscribers a day from these ads, and it was just compounding, and it was getting me back where I wanted to be, but I still wanted more growth. I thought, okay, we're getting back where we need to be. Let's do a launch so I can have a big boost in numbers again like I did in the spring, and then I'll use these intro offers to kind of maintain my numbers between launches. This was my plan, okay? So I decided to use that Tumblr that I had in that intro offer as the free gift during the launch, and it was going well. The launch had fewer new subscribers this time around than I did in the spring and I think that's because I had been running ads to that intro offer for a while. But I was pleased. I had several hundred new subscribers in a few days of launching. And then it happened. I feel like we need like sound effects, like dun dun dun. And then the payments started to fail. A huge number of payments started failing. Hundreds. Mostly they were all my new subscriber payments that were failing. I had never seen anything like this before in the 8 years that I've had my subscription box. I lost just as many subscribers as I had gained, and my retention rate plummeted. I had never in 8 years had a retention rate lower than 90% for my subscription box. And I ended that month of September with a 79% retention rate. I lost just as many subscribers as I had gained. The amount of wine and chocolate I consumed over the next few weeks was massive. I could not figure out what happened. I still don't know. But one thing I do know is that when something doesn't work or something is an epic failure like this launch was, You don't give up. Just like that first intro offer, I only sold 16 of them, and I sold over 100 with the second intro offer. I did wallow in self-pity for a bit, but quickly shifted gears for Q4. I told myself, it is what it is, Sarah. Let's get going for Q4. And I think sometimes we have to give ourselves space and grace to wallow in our self-pity for a little bit, to be upset, to have emotions, to have feelings about why something is working or isn't working. But we can't stay there, because if I would have stayed there, I would have let Q4 go by and kind of given up. And I knew I didn't, I didn't have time for that. Let's get going for Q4. Kept telling myself, it is what it is. I don't know why it happened. I still don't know why it happened. But it is what it is, and I can't just chalk the rest of the year up because I'm upset now. I came into Q4 down 18% year-to-date in one-time sales and down 4% in subscriptions. So here I am walking into October with a deficit, and I was like, okay, I want to meet last year. And I want to beat last year so that I can make a little bit of a dent in this 18% year to date and see if I can get my subscriptions going before the end of the year. And I knew subscriptions would be harder because people don't typically subscribe while they're buying Christmas presents. So I really focused on those one-time sales. And this was the time to pull out all the stops and see if I could make a dent in those numbers. So I planned early. I sat down and I planned earlier than I've ever planned before. I've been pretty much a fly by the seat of my pants entrepreneur. For a long time, but I knew to make things super successful, I needed to have things planned out so I could have marketing assets built, so I had everything scheduled and I wouldn't be a hot mess this Q4. And so I planned early. I got my promotions up. I planned 7 promotions between October and Christmas. October came and my sales were up 6%. And November came and my sales were up 8%. And through this time period, my subscriptions are holding strong. I was filling back everything I was losing, so that felt good, especially after that September launch mess. Now, here's one thing I want you to understand. I won't end this year positive over last year, and that hurts a lot because it's the first year since I've started my business that I won't have a gain in Framed. That's been a hard pill to swallow for me and honestly made me feel some type of way for the last few months. Um, almost like a mini depression, I want to call it. You know, I've been up every year since I started this business, and this was going to be the first year that I'm not up. But I don't want to focus on the gap. I choose to focus on the gain. There's a book called The Gap and the Gain. It's by Dan Sullivan and Benjamin Hardy. And as entrepreneurs, we focus on the gap way too much. That gap is that place where we are and where we want to be, and that's the gap, okay? Versus the gain, which is where we were and where we are now. If we go back to 2017, when I started my subscription box. That year I made $72,000 in revenue. More money than any salary I'd ever have working a 9 to 5, okay? And today, over $10 million. Over $10 million. So I'm gonna choose to focus on the gain. How many people do I know that have made over $10 million? It's pretty incredible, and it's changed my life in every way, and it's changed my business in every way. So on those days where everything I do feels like a failure, I have to remind myself of the game. I wouldn't be here if I gave up when things got hard. I wouldn't be here if every failure made me quit. And now I get to reset and start the new year off with a clean slate. Keep focused on the numbers and be strategic and intentional in everything that we do. This entrepreneur life is something I never want to give up, and if you're listening to this and you made it through the whole episode, I really hope it's something that you're fighting for too. We're going to have ups and downs. Highs and lows, but I want you to live in the gain and not the gap. If you've had a harder year, I hope this inspires you to keep going. If you've had an incredible year, I hope you know that you're looking at years and years and years of making a difference in people's lives and your own life. $72,000 to $10 million. I did that one box at a time. I did that. Thanks for listening. I hope it's inspired you today, and I'll be back next week with another great episode. Thanks for joining us on the Launch Your Box podcast. If you're looking to grow your audience, head over to launchyourbox.com and grab the 10 steps to help you start building your audience guide. It's packed with practical tips to help you connect with your future subscribers. Until next time, keep launching and growing on your subscription box journey.