Explore the pros and cons of PsiBufet's subscription-only model and alternative hybrid models combining subscriptions with one-off sales. Learn how to determine the best approach for your business.

1. SUBSCRIPTION-ONLY
vs HYBRID - the best
ecommerce model
for today

2. Maciej Baranowski
Chief Experience Officer at
PsiBufet
Piotr Futymski
Chief Strategy Officer at
Sublime

3. 1. Subscription-only vs Hybrid
2. PsiBufet case study
3. Key Takeaways
4. Q&A
Session agenda >>

4. Sublime {measures} DTC
growth
>> ABOUT SUBLIME

5. >> SUBSCRIPTION-ONLY vs HYBRID: explanation
≫ Each order is subscription
≫ Payments are automated
≫ Subscription and one-time orders
≫ Sub payments (usually) automated
≫ One-time payments manual
≫ Offering:
○ One-time products vs subscription
products or deals
○ Each product can be purchased as
subscription or one-time
Subscription-only Hybrid

6. >> SUBSCRIPTION-ONLY vs HYBRID: numbers
Subscription-only Hybrid
20% < 80%
≫ DTC share:
≫ Share of
subscription
revenue:
100% > 4-65%
Source: Sublime

7. >> RETENTION
Why DTCs bother with subscriptions
≫ Retention rates for subscription:
○ At 2nd order: 3-5 times higher
○ At 3rd order: 5-11 times higher
○ At 4th order: 7-20 times higher
○ At 5th order: 10-30 times higher
Source: Sublime

8. >> PREDICTABILITY
Why DTCs bother with subscriptions
≫ Return rates for subscription:
○ Avg return rate 5-6 times higher
○ Sub return orders concentrated
around renewal periods, one-time
much less predictable
Source: Sublime

9. >> VALUE
Why DTCs bother with subscriptions
≫ CLV for subscription:
○ After 3 months: 1.6-1.9 higher
○ After 6 months: 2.1 - 2.3 higher
○ After 12 months: 2.4 - 2.7 higher
○ After 18 months: 2.5 - 3.6 higher
Source: Sublime

10. >> SUBSCRIPTION-ONLY vs HYBRID
But it’s not all rainbows and
unicorns…

11. >> PROFITABILITY
Subscribers are easier to retain but
harder to acquire
Sub-only Hybrid
CVR: 2-3 times lower
Sub-only Hybrid
CAC: 1-3 times higher
Sub-only Hybrid
LTV: 1.5-3.5 times higher
Source: Sublime

12. >> DECIDING ON THE RIGHT MODEL
Getting subscription right
offers tremendous
advantages for a DTC brand

13. Getting subscriptions right:
step 1 - find the value for customer
>> DECIDING ON THE RIGHT MODEL
Curation: repetitive, personalized experience (55%)
Replenishment: automated purchase of commodity items (32%)
Access: member-only perks, limited editions (13%)
Source: McKinsey

14. Getting subscriptions right:
step 2 - confirm with data
>> DECIDING ON THE RIGHT MODEL
≫ Analyze purchasing patterns to confirm subscription value
○ Time distribution between orders
○ Most popular carts
○ Product transitions between orders
○ Retention rates by first ordered product
○ Retention rates by first order payment method

15. Getting subscriptions right:
step 3 - decide on the model and optimize
≫ If you see a lot of value in subscription and purchasing patterns confirm
that, go with subscription-only
○ Brace for battle for effective customer acquisition
≫ If no clear subscription value or purchasing patterns do not confirm, start
with hybrid
○ Brace for battle to convince customers to subscribe rather than buy
one-time
>> DECIDING ON THE RIGHT MODEL

16. Case Study: PsiBufet

17. >> ABOUT PSIBUFET
We revolutionize the pet
food industry by providing
healthy, home-cooked
meals for dogs, tailored to
their individual needs.

18. Curation
≫ It is not recommended to change the dog food more often than
every 6 weeks
≫ Dogs fed with PsiBufet over a longer period of time experience positive
changes such as: better digestion, shinier coat, healthier skin
Replenishment
≫ Cyclic deliveries of daily consumable goods straight to customer’s door
>> ABOUT PSIBUFET
Why PsiBufet is a long-term product

19. >> ABOUT PSIBUFET
Dog food is a natural use
case for a subscription
model.

20. ≫ Creating subscription for each new customer
≫ Customers could pay for subscription with one-time payment methods
(P24, BLIK)
≫ Customers would be reminded to pay for the box 3 days before the
shipping date
≫ Lower retention rates, customers forgetting to pay
≫ At the same time, fabulous retention curves and LTV values for card
customers
≫ But 9/10 customers would pick a one-time payment method…
>> ABOUT PSIBUFET
PsiBufet 2 years ago

21. >> ABOUT PSIBUFET
Paying hurts.

22. >> ABOUT PSIBUFET
So in June 2021,
we decided to get rid of it…

23. >> ABOUT PSIBUFET
… And we immediately
faced acquisition issues
caused by 3 barriers:

24. Customer expect more
payment methods
>> ACQUISITION BARRIERS
Solutions
1. Make it easy to pay with card
2. Explain why

25. Customers are afraid to pay
with card
>> ACQUISITION BARRIERS
Solutions
1. Focus on security
2. Build trust
3. Educate

26. Customers fail to complete
3D Secure
>> ACQUISITION BARRIERS
Solutions
1. Stellar tech setup
2. Reach out and help

27. ≫ Retention improved by 80%
≫ After optimisations we managed to achieve similar CAC and conversion
rate levels as with one-time payments
≫ Since June 2021, PsiBufet has grown 9 times and continues to grow as the
biggest fresh brand in Poland
>> RESULTS
It was worth it.

28. >> SUMMARY
≫ Subscription can bring a lot of value for the business as long as it brings
value for customers
≫ Get an understanding of purchasing patterns of your customers to
confirm the value
≫ Make a decision on the model and stick with it - half measures don’t work
≫ In any case (sub-only or hybrid) be prepared to tackle many customer
barriers to make the model work
Key Conclusions

29. THANK
YOU
>>

30. Customers don’t
understand they activated a
subscription
>> Challenge #4
Solutions
1. Be open & honest
2. Use touchpoints to build expectations and remind
Source: Statista

31. Customers want more
control
>> Challenge #5
Solutions
1. Give as much flexibility as you can
2. Make a great product customers want to subscribe
Source: Statista

32. Getting subscriptions right:
step 4 - decide on incentives (hybrid)
>> SUBSCRIPTION-ONLY vs HYBRID
Source: Sublime
≫ Usually there is a huge gap in LTV between
subscribers and non-subscribers
≫ This gap can be used to incentivise
customers to subscribe (discount and/or
free gift) to increase CVR/decrease CAC
≫ Run tests to find the right incentive that
optimizes for conv. rate and ultimately
LTV:CAC

33. Getting subscriptions right:
step 5 - decide on the timing (hybrid)
>> SUBSCRIPTION-ONLY vs HYBRID
Source: Sublime
≫ Check your sales data to see if
users subscribe at first or later
order
≫ Based on that decide on the
default model: sub vs one-time
≫ For customers that did not
subscribe at first order, try to
move them to sub at later stage