Implementing Cigar Subscriptions to Increase Your Revenue
Cigar subscriptions are a popular trend among cigar enthusiasts. Members of cigar clubs or month clubs receive a selection of cigars, from original premium cigars to southern cigars, etc., more regularly, often a monthly subscription at a discounted price.
Subscription services can increase retention and revenue and strengthen customer loyalty. However, it’s important to ensure that it is well-managed and offers compelling value to customers for long-term success. Slow and steady wins the race…
Did you know? 🤔
The global luxury cigar market is expected to grow at a compound annual growth rate of 7.2% from 2021 to 2028, reaching USD 20.25 billion by 2028. – Grand View Research
Are Cigar Subscriptions Worth It?
Cigar subscriptions can be worth it for aficionados who want to discover different blends, expand their knowledge about the industry, and enjoy the convenience of delivery directly to their door. Prices range depending on the subscription service and the quantity included. Some services offer high-quality, premium cigars, while others provide lower-priced cigars.
Overall, various blends, brands, and sizes can be a great way for your customers to indulge in the total “cigar experience” and expand their palate. For the tobacco industry, subscriptions can maximize store visits and customer lifetime value in various ways. Read on for more…
Cigar Subscription Trade Tips
1. Offer annual or term-based memberships
Offering annual or term-based memberships to month clubs, luxury cigar clubs, premium cigar clubs, rare cigar clubs, or monthly cigar clubs (to name a few) can provide customers exclusive access to certain benefits and create a sense of community—not just as a hobby, but as a lifestyle.
Recurring revenue from committed customers provides a steady income stream, thus allowing you to plan your inventory and resources more effectively. In addition, memberships can grant access to exclusive events, personalized recommendations, and other perks that non-members don’t have access to.
Multiple tiers with different benefits and price points provide an opportunity to appeal to a broader range of customers and upsell to higher tiers, which can increase the value of each sale. When offering a subscription box, it’s essential to consider its contents and delivery frequency. The subscription box must include a selection of quality products that are likely to be enjoyed by your subscribers. Communicate the benefits, including the quality and variety of products and any additional rewards such as early access or discounts. Finally, manage inventory carefully to have enough products to fulfill subscriptions without overselling.
Buy an SKU and get access to certain benefits.
Increase brand awareness, sales, and loyalty, and move inventory by incentivizing customers to purchase an SKU (stock-keeping unit). SKU-based benefits, such as a cigar lounge, discounts, or early access to new products that are unique and valuable, can differentiate your business from competitors and create a unique selling proposition.
When offering access to a cigar lounge, it’s important to consider factors such as location, amenities, and atmosphere. Ensure the lounge is easily accessible and offers comfortable seating, good lighting, and other amenities that make customers want to spend their time there. Consider offering exclusive events or promotions for lounge members to incentivize purchases further.
- Unique experience: Access to a cigar lounge can provide customers with a unique experience that they may not be able to find elsewhere. This can create a sense of exclusivity and make customers feel appreciated.
- Cross-selling opportunities: Cigar lounges often offer food, drinks, accessories, and cigars, which can provide cross-selling opportunities for your business and increase the value of each sale.
When offering discounts, it’s important to consider the discount amount and the promotion terms and conditions. The discount must be significant enough to incentivize purchase but not so large that it negatively impacts your bottom line. Consider offering time-limited discounts or discounts on specific products to entice further purchases. Clearly communicate the terms and conditions of the promotion and make it effortless for customers to redeem.
- Incentivize purchase: Encourage customers to make a purchase they may not have made otherwise.
- Competitive advantage: Give your business a competitive advantage over others in the industry due to the added value of the discount.
- Clear ROI: Offering discounts as a benefit can provide a clear return on investment (ROI) for your business. By tracking sales of the SKU and the number of discounts redeemed, you can easily calculate the ROI of the promotion.
Exclusivity can give you a competitive edge. Consider offering early access to limited edition cigars or special blends unavailable elsewhere. Again, make sure to clearly communicate the terms and conditions of the promotion and make it easy for customers to access their benefit/s early. Additionally, consider offering exclusive promotions or events.
- Build anticipation: Offering early access to new products or limited edition cigars can build anticipation among your customer base. Customers will be excited to be among the first to try new products or purchase limited-edition cigars, which can create a sense of excitement and exclusivity.
- Sales growth: Customers who want early access will be motivated to purchase, which can drive sales of that product, increasing revenue for your business.
Cigar locker subscriptions
Let guests store their goods in a convenient, secure cigar locker for an auto-billed monthly fee.
This encourages store visitation as they are vested in accessing their cigars. Cigar locker subscriptions provide a reliable and consistent source of income. Cigar locker subscriptions also provide opportunities for upselling customers who are already interested in your products and may be receptive to purchasing additional items.
Consider the size and location of your lockers. Lockers must be large enough to accommodate customers’ collections and located in a convenient and secure area of your store. Appeal to a range of customers by offering different pricing tiers based on locker size or location. Be candid about the benefits of the cigar locker subscription to potential subscribers, including convenience, security, and exclusive access to products. Finally, manage inventory carefully to have enough cigars to fulfill subscriptions without overselling.
3. Customized subscriptions
Investing in a robust online membership management system that can handle complex subscription plans and customer data is essential when offering customized subscriptions. Partner with a third-party provider like bLoyal if you don’t have the resources to build your own system. Communicate the benefits, including personalized customer service and tailored product offerings. Finally, regularly review and update your subscription plans based on customer feedback and changing market trends.
a) Online membership management.
Online membership management keeps track of each customer’s preferences and subscription plan. The right system will allow you to easily manage and update each customer’s subscription as their preferences change.
- Customer preferences: Collect information about each customer’s preferences, such as their favorite brands, flavor profiles, and preferred cigar sizes.
- Stay connected: Regularly communicate and encourage customers to provide feedback to determine customer satisfaction levels and improve product development, marketing, and more.
- Customized subscription plans: Based on your collected information, create customized plans that cater to their preferences. You can offer different subscription tiers based on cigar brands, flavor profiles, or size preferences.
- Flexibility: Offer flexible subscription options that allow customers to pause, cancel, or adjust their subscription anytime. This will increase customer satisfaction and reduce the risk of customer churn.
b) Let members choose what they want, how much, and when.
Giving subscribers or month club members the freedom of choice can provide a personalized experience that meets their unique needs and preferences. This approach can help increase customer satisfaction and retention while providing a valuable source of recurring revenue for your business.
- Flexible subscription options: Provide a range of subscription options that allow members to choose how much they want to spend and what products they wish to receive. For example, you could offer a subscription enabling members to select a set number of cigars each month or a subscription letting them choose from various cigar brands and sizes.
- Customizable online platform: Use a customizable online platform that allows members to easily choose and manage their subscription options, such as an online portal where members can select their products, adjust their subscription frequency, and manage their billing information.
- Communicate clearly with members: Provide clear pricing information and details about the products available through each subscription option.
- Feedback: Regularly seek input and suggestions from members on new products or subscription options.
Additional benefits: Consider offering other benefits to members who customize their subscription options. This could include exclusive discounts, early access to new products, or special events and promotions.
4. Have you thought about compliance?
Compliance ensures that your cigar subscription service operates within the bounds of the law and avoids any legal issues or penalties. This can help protect your business and reputation while providing your customers with a safe and enjoyable experience.
- Verify customer age: Verify the age of each customer subscribing to your subscription service by requiring them to provide a valid ID or by using a third-party age verification service.
- Tobacco sales regulations: Prioritize compliance with all relevant tobacco sales regulations, including age verification, sales taxes, and shipping restrictions.
- Terms and conditions: Disclose the terms and conditions, including any restrictions on shipping or product availability.
- Compliance: Regularly monitor compliance with all applicable laws and regulations. This can include monitoring customer age verification, ensuring proper record-keeping, and complying with local and state sales tax requirements.
- Legal experts: Consider partnering with legal experts specializing in tobacco sales regulations so your subscription service complies with all relevant laws and regulations.
bLoyal integrates compliance services to guarantee you collect the correct tax amounts.
Integrating compliance services such as tax calculation and reporting can help ensure your subscription service fully complies with relevant regulations and tax laws. By partnering with a service like bLoyal, you can streamline your compliance efforts and reduce the risk of errors or penalties.
Moreover, an integrated compliance solution can help you stay up-to-date with changes in tax laws or regulations, which can vary depending on your location and the products you sell. This can be especially important for businesses operating in multiple states or countries.