Scaling Subscription Models

I've been quiet about this for months, but it's time to share. After 8 years running pure ecommerce brands, we've completely pivoted our business model: every product we launch now has subscription component. Not because subscriptions are trendy. But because economics are undeniable. Here's what happened when we added a $27/month subscription option to a beauty brand selling a one-time $59 product (with proper funnel in place too): -Customer Acquisition Cost remained identical -Average first-order value increased by 14% -Customer Lifetime Value jumped by 40% -Retention rate at 49% after 6 months The difference between struggling and thriving in ecommerce often comes down to unit economics. When your LTV is 1.5X your CAC, you're barely surviving. When your LTV is 4X your CPA, you can outspend any competitor. Subscriptions change the entire psychology of your marketing. When you sell one-time product or have sh*t funnel with sh*t upsells you need to convince customers to buy again and again. When you sell subscriptions you only need to convince them once. Then inertia works in your favor. Most brands approach subscriptions completely wrong. They treat them as a minor addition to their business, not a fundamental shift in their model. Our approach: We design products specifically to create ongoing value. Every new product must answer: "Why would someone continue using this month after month?" The first 14 days are also critical. We've built a 9-touch onboarding process that drives initial product usage and builds habit formation. We've built systems that track customer usage patterns and send timely reminders when they should be seeing results or need to reorder. Each subscriber receives exclusive content tied to subscription journey - improving results and creating deeper brand connection. Before each renewal, customers receive a preview of what's coming next and how it builds on their current results. Results: Our retention rates are now 2.7X industry average, and our CAC payback period decreased from 62 days to 32 days. Successful DTC brands of the next decade won't be selling products. They'll be selling ongoing transformations, delivered through physical products. If you're still focused solely on one-time purchases, you're building a business model that's increasingly difficult to sustain. The shift isn't easy. But it's necessary. And not making shift is harder in the long run.

Subscription commerce failed in India for a decade. Now it's working. Why? I remember 2016. Every other pitch deck had "subscription box" on it. Fab Bag, beauty boxes, meal kits - everyone wanted to build India’s Dollar Shave Club. By 2020, most were gone. My Ayurveda brand tried too, even with 6–9 month purchase cycles, it didn’t work. Cut to today, a very different picture.I recently spoke to 3 founders running subscription businesses. All launched post-2022. All profitable. One doing ₹50-1000 Cr+ ARR with 65% retention at month 6. That got my attention. So I spent the last few days digging into why it's suddenly working. Why did FAB BAG, Doctalk, Doodhwala, Otipy fail but today's winners are killing it? The answer came down to two words: UPI AutoPay. The successes: → Kuku FM: >12 M+ paying subscribers for regional audio-video content (our first investment at @V3 Ventures India) → Country Delight: Daily milk delivery via subscription, does ₹600+ Cr in revenue → Wholsum Foods (Slurrp Farm and Mille): Kids nutrition products on weekly/bi-weekly subscription. Parents don't want surprises, they want the same healthy millet cookies delivered automatically. Aisha is a big customer → Licious: Meat subscription component growing fast. You pick your cuts, they deliver weekly What changed? 1. UPI solved the payment problem: 131 billion UPI transactions in 2023. Auto-debit on UPI is now seamless. It had a lot of friction in the past. This has led to what one founder told me: "COD customers churn at 40%. UPI auto-debit customers churn at 12%. Payment method is the business model." 2. Q-Com also proved daily delivery is possible: When Zepto can deliver groceries in 10 minutes, milk every morning doesn’t sound crazy anymore. Cold chain, reliability, last-mile ops - all the boring things finally clicked. 3. Model Shift: Replenishment > Discovery, Subscription in India isn't about trying new things. It's about auto-delivering stuff you already buy by removing friction & making customers loyal. Indians now buy the same atta, same milk brand, same baby food every week. Subscriptions just automate what we'd do anyway - with a small discount as incentive. So, what works is obvious now Category: Consumables (milk, eggs, baby food, meat)  Frequency: Weekly/bi-weekly (monthly too long)  Discount: 5-15% ( like Country Delight’s early-bird plans)  Flexibility: Easy skip/cancel (trust builder)  Payment: UPI auto-debit (not COD) After a decade of failed experiments, subscription commerce has finally found its moment in India and it looks nothing like the US playbook. The brands that understand this will build annuity businesses in categories everyone else is fighting for one transaction at a time. The question: there’s been talk of consumers forgetting their upi auto pay subscriptions. Will this be regulated/some friction be added?

I realized a few months ago that I had been viewing growth with a narrow lens until GrowthX. Focusing solely on acquisition and revenue. But scaling a business isn’t just about getting more customers or making more money. It’s about creating a holistic growth engine. One framework that changed how I approach scaling is the AARRR model: 1. Acquisition For SaaS, customer acquisition starts with identifying the right channels: -Paid Ads -Content Marketing -Partnerships Track your CAC (Customer Acquisition Cost) by channel to identify what delivers the best ROI and double down on the channel. 2. Activation Activation, in its truest sense, happens only when your user identifies the core value prop of your offering - Time to First Value (TTFV) It's not just submitting a signup form. It's a lot more than that. - Simplify sign-up flows—reduce friction like lengthy forms. - Provide a clear "first value" moment (e.g., a campaign successfully launched, a report generated, or an integration setup). Use product tours, in-app tooltips, and email onboarding sequences to guide users. 3. Retention Retention is the lifeblood of any business. Focus on these 3: - Engagement: Use in-app notifications, usage reminders, and personalized check-ins. - Support: Provide proactive customer success—regular health checks and real-time chat support can reduce churn. - Upsells: Introduce advanced features or integrations to increase usage and stickiness. 4. Revenue Revenue in SaaS is driven by a combination of pricing strategy and upsell opportunities. - Freemium Models: Encourage free users to upgrade by highlighting premium benefits. - Upselling and Cross-Selling: Offer add-ons like analytics modules, team collaboration features, or premium support. - Annual Subscriptions: Incentivize users to commit to annual plans with discounts. Look for an optimized Customer Lifetime Value (LTV) and align pricing with the value you deliver. 5. Referrals Referrals can scale SaaS businesses exponentially. - Incentivized Programs - Built-In Virality: Features like collaborative tools or shared reports encourage users to invite others. - Social Proof Watch out for NPS, as your happy customers are your best marketers. Scaling SaaS requires analyzing each stage of the AARRR funnel and identifying where you can optimize. Which AARRR stage is your biggest focus right now?

We’re two months into 2025, and the subscription brands seeing real growth aren’t playing by 2024 rules. What’s changed? Consumer expectations. Acquisition is getting harder, retention requires more than last-minute discounts, and generic subscription models aren’t cutting it anymore. The brands thriving today are focused on value, personalization, and long-term engagement. Here’s what’s working—and what’s already outdated: 🚫 Deep discounts for acquisition → ✅ Personalized offers that attract the right customers 🚫 One-size-fits-all subscriptions → ✅ Flexible tiers and AI-driven customization 🚫 Reactive retention strategies → ✅ Proactive engagement before customers think about canceling 🚫 Manual processes & guesswork → ✅ AI and automation optimizing pricing, churn prevention, and CX Subscription growth isn’t about chasing quick wins. It’s about aligning your offer, experience, and engagement with what customers actually want. Are you adapting to the new subscription landscape, or still playing by old rules? Let’s talk in the comments. ⬇️

From 0 to $4.5M ARR in just 14 months. 👇 Our client Zumba has one of the fastest growing subscription apps in the fitness space, stacking up >30,000 active subscribers and winning RevenueCat’s Anchor’s Away award. But scaling a fitness app these days is no joke. Last year, the team and I at Perceptycs kicked off our partnership with Zumba to diagnose growth bottlenecks and help plot a path forward. The game plan? ✅ Cutting noise: scaling back Google, killing TikTok, & doubling down on Meta ✅ 10x’ing creative testing to find messaging that converts ✅ Overhauling the early user experience to drive more trials ✅ Running high velocity paywall and pricing tests to boost annual subs ✅ Shifting focus to Web2App to scale faster The result? A 52% drop in CPA in 3 weeks, $4.5M ARR in 14 months and a sustainable growth engine that’s still scaling today. I break it all down in my latest article published by RevenueCat, including: 📌 The what and why behind some of the experiments we ran 📌 What worked (and what didn’t) 📌 Key lessons for scaling subscription apps Check it out in the link below. Must say, I do love doing great work with great people!