How US Subscription Retailers Use Brand-to-Brand Partnerships to Drive Record Performance

Since 2020, U.S. households have been battling high inflation and navigating increased costs for groceries, gas and housing. As a direct consequence of this inflationary environment, consumers have had to make difficult spending decisions. Despite these challenges, the retail industry has remained nimble, adapting with new ways for consumers to purchase goods and services with more financial predictability.

Subscription services are now one way consumers can access products and services for a fixed sum, paid at regular intervals — typically monthly or annually. According to the Zuora Subscription Economy Index (SEI), businesses operating on a subscription model have grown an astonishing 3.7 times faster than the S&P 500 Index. Furthermore, UBS forecasts that the subscription economy will grow to $1.5 trillion by 2025, more than doubling its value in just three years.

This growth has been driven by unwavering demand, with no signs of decline. Research reveals that the average U.S. consumer spends over $1,000 annually on subscriptions, with more than 62 percent of American households utilizing at least one retail subscription service. While food and streaming services continue to dominate the subscription landscape, other sectors are gaining traction, offering subscriptions for items ranging from shaving products to pet supplies.

However, despite the high-growth potential, subscription-based retailers are not immune to challenges. In response to the hundreds or thousands of dollars U.S. consumers spend on monthly subscriptions, banks have made it possible for customers to easily cancel auto-renew payments for subscription services. While this provides consumers with control over their subscription management and consumption, it leads to customer churn. This dynamic has made it necessary for subscription services to constantly find new customers. As a result, retailers are seeking innovative ways to sustain their growth and attract new customers. It's within this context that affiliate marketing emerges as a clear solution.

Brand-to-Brand Partnerships Lead Customer Acquisition Strategy

Subscription-based companies are in urgent need of effective strategies to mitigate customer loss and simultaneously fuel their customer base. Affiliate offers a dynamic space where brand-to-brand partnerships thrive, offering a novel route for customer acquisition. It not only paves the way for subscription services to combat the challenges of customer churn but also provides a platform for these companies to strategically align with relevant partners.

Brands can, therefore, leverage each other's customer bases, introducing their offerings to a new, yet familiar audience. This mutually beneficial approach allows companies to tap into pools of potential customers likely to be interested in their services given the complementary nature of the partnering brands. By harnessing the synergy of brand-to-brand partnerships, subscription services can extend their reach, enhance customer experiences and, ultimately, achieve sustainable growth despite the hurdles of the modern economic landscape.

An example of such a partnership is the successful collaboration facilitated by the global affiliate marketing platform Awin between Myprotein and SimplyCook. Customers that purchased products from Myprotein would receive instructions on how to claim a free SimplyCook trial upon checkout . As a result of this partnership, Myprotein referred over 55,000 customers to SimplyCook and more than a quarter became subscribers.

This partnership wasn’t just a win for SimplyCook; Myprotein was also able to generate nearly $200,000 in incremental revenue in the form of commission payments through this campaign.

Building Complementary Success

Conversion rates of subscribers tend to be significantly higher with well-aligned partnerships compared with other acquisition channels. In 2023, Awin enabled multiple subscription brands to achieve impressive results through these complementary brand partnerships:

• 19 percent year-over-year increase in acquisition performance for subscription advertisers;
• 20 percent average increase in conversion rates when a subscription is offered as a free gift; and
• 48 percent average conversion into full paid subscribers following a free trial.

Identifying the right partner with a similar or complementary customer base and no competition between companies and products is critical.

Successful partnerships can significantly impact brand perception. Choose wisely.

Stephanie Appel is the customer success lead at Awin, a global affiliate marketing platform.