See all Blogs
June 18, 2024
by
Harsheen Sahni

Why is Loop Becoming the Top Choice for Pet Brands?

About the brands

HelloBello

HelloBello delivers freshly prepared, human-grade cooked and cooled meals for dogs, tailored to meet each pet's specific nutritional needs. The brand has earned acclaim for its commitment to quality, being named the 2023 Product of the Year by Futtertester.de, with a rating of 9.5 out of 10 from 100 evaluators. 

Mammaly 

mammaly is the brainchild of Alexander Thelen and Stanislav Nazarenus. Her vision from the start was to fundamentally change the way we feed our pets - with supplements for dogs and cats. Founded in 2020, mammaly is now one of the leading digital pet health start-ups in Europe. 

NutriPaw

NutriPaw is simplifying dog health offering 100% natural pet supplements made into tasty treats. Made with only the highest quality ingredients, NutriPaw helps pet parents take the complexity out of keeping their dogs healthy.

Doggy Do Good

Doggy Do Good brings you pet supplies with purpose. With their home-compostable pet waste bags, they are working towards making pet's environmental paw-print a little smaller. By shopping with the mission-driven team at Doggy Do Good, you are giving back to organizations that love animals and the planet as much as they do.

Common Challenges

We have observed pet brands face these challenges time and again.

Low average order value 

Unlike the beauty industry, where premium branding and better quality can lead to high-value carts, pet brands face their own set of rules. DTC pet essentials tend to be more reasonably priced and up for frequent replenishment. Naturally, the average order value per cart tends to be lower. 

Why does this matter? A lower average order value can:

  • Limit a brand's revenue growth,
  • Directly squeeze profit margins,
  • Make it hard to justify the cost of customer acquisition (CAC).

Given these factors, it’s clear why increasing the basket size is a major concern for pet store merchants.

Diminishing profit margins

Generally, pet brands running on a subscription model tend to create profit after the third repeat order. But a high churn rate, where customers unsubscribe early or fail to make repeat purchases, poses a challenge for merchants to maintain a healthy profit margin. 

Combine this with a low average order value, and the customer lifetime value (LTV) goes down. A low LTV will not justify the cost of acquiring new customers, further impacting the overall profitability of the subscription business. 

This sets off a vicious cycle, something merchants work to fend off at all costs. Businesses find themselves in a situation where they must continuously invest in acquiring new customers, even as their existing customer base dwindles. In other words, the business becomes hard to scale when the CAC is close to the AOV. 

Fortunately, our hands-on experience with hundreds of brands has enabled us to develop smart cancellation flows. In the next section, we will break down our churn reduction strategy. 

High churn rate due to shifting needs of growing pets

When it comes to churn rate, pet brands face a unique challenge that stems from the natural progression of pets' lives. As pets grow, their dietary needs evolve, prompting pet parents to seek out products that better align with these changing requirements.

This leads to subscription cancellations, posing a challenge for merchants aiming to maintain customer loyalty.

To thrive in the DTC pets industry, subscription brands must cater to every life stage of the pet. This involves expanding product offerings and personalizing subscriptions to meet the dynamic needs of growing pets.

Loop’s Solution

In the table below, we have broadly mapped out how specific features of Loop address various challenges.  

Bundle and box subscriptions

Offering bundles have emerged as the ultimate solution for brands trying to increase their AOV. Be it range or fixed bundles, they result in higher value added for the subscriber and larger cart value. 

Loop bundles are easy to set up, and work well with a variety of subscription models. Not to mention our customer portal’s upselling section is designed to introduce and upsell bundles to existing subscribers.

Next, box subscriptions (personalized bundles) are another great way to boost AOV, encouraging customers to ‘add more and save more’. Loop’s box subscriptions come with a progress bar to incentivise them to complete the action. We have intentionally kept the UI simple so the customer does not get distracted. 

Our pet brands bet big on bundles too. See how they have incorporated bundles in their subscription setup.

Want to learn more? Check out bundles on Loop today. 

Smart cancellation flows 

Loop’s powerful cancellation analytics have been very successful in tackling churn. No fluff, just plain good strategy. Our approach to slashing churn is three-fold.

  • Figure out why subscribers are canceling,
  • Segment customers based on these reasons,
  • Take action.

When it comes to taking action, there are some levers that have shown great results:

  • A personalized message from the founder 
  • Displaying a gif 
  • Discount or deal 
  • Lifetime price lock-in 
  • Option to swap product 
  • Option to pause/skip a subscription
  • Option to change delivery frequency 

In the case of Doggy Do Good, four features within Loop’s cancellation flows came together to effectively tackle churn.

1. Customisable exit survey
Before Loop, Doggy Do Good struggled to understand why subscribers were canceling. When they switched over to Loop’s customer portal, they configured an exit survey which would pop up when a subscriber attempted to cancel. They customized the exit survey reasons: 

  • “I have too much product right now”
  • “I want a different product”
  • “My pet passed away”

2. Personalized messages to subscribers 

Over time, using Loop’s churn analytics,  Doggy Do Good started seeing the reasons behind cancellations. Most of the cancellations happened because subscribers had too much of the product on them.

And reducing cancellations is easy when you have deep insights into customer activity. Based on these reasons, you can display messages to subscribers, which is the right time to remind them of product USPs.

In case of Doggy Do Good, they wanted to 

  1. Acknowledge the contribution of the subscriber to their business
  2. Last minute reminder about the benefits that they were about to lose.
  3. Giving them the opportunity to take advantage of an alternative action: Pause or change the product in their subscription.
customized cancellation flow inside Loop portal for Doggy Do Good

3. Creating personalized offers for different subscriber segments

In case messages do not work, brands can also offer one-time discounts to subscriber segments who may be price sensitive or who may have too much product at hand. 

4. Offering swap functionality to mitigate cancellations

By letting subscribers easily swap products, brands can ensure their service remains relevant and valuable to pet owners throughout their pets’ various life stages.

Loop Subscriptions seamlessly integrates churn analytics with cancellation workflows, so merchants spend less time understanding cancellations and more time scaling their business. Merchants can supercharge their retention strategies with customer insights.

Gamification with Loop flows 

Loop flows are the most LTV-boosting addition to the subscriber experience. You can automate personalized offers for different subscriber segments, and reward them to keep them engaged. Focusing on improving the customer experience to encourage repeat purchases can actually offset the effects of low AOV. 

We worked with our pet brands to solve for customer engagement. One of them set up a reward banner that would be shown  after a subscriber completes 2 orders. Others added a motivation message to be displayed on the customer portal before the customer had shown signs of churn. You can also experiment with different messaging on the subscriptions widget on the customer portal. 

Results 

Here’s the complete rundown: 

  • Doggy Do Good reduced their churn rate from 10% to 1% in a single quarter.
  • Mammaly saved 3% subscriptions revenue simply from executing cancellation flows. 
  • NutriPaw average order before cancellations went up by 10% in 30 days. Plus, their bundle sales reached 350 bundles/month with their bundle AOV 2.5x than the regular AOV. 

Testimonials 

All said and done, here’s what our brands had to say about Loop. 

400+ BRANDS SEAMLESSLY MIGRATED
Switch to Loop for advanced subscription management.
Experience Seamless Migration (Zero Data Loss) with Dedicated 1-to-1 Support via Slack.
Book a Demo Now