CASE STUDY: HOW A SMALL SUBSCRIPTION BOX BUSINESS” NATURAL BEAUTY CLUB” INCREASED SALES BY 200% WITH UPSELLS & BUNDLES

CASE STUDY: HOW A SMALL SUBSCRIPTION BOX BUSINESS” NATURAL BEAUTY CLUB”  INCREASED SALES BY 200% WITH UPSELLS & BUNDLES

INTRODUCTION

Natural Beauty Club, a small subscription box business specializing in natural beauty products, struggled to increase revenue despite having a loyal customer base. While their subscription model ensured recurring revenue, they faced challenges in boosting sales beyond standard monthly subscriptions.

To overcome this, the company implemented strategic pricing, product bundling, and email marketing campaigns for upsells. The result? A remarkable 200% increase in sales. This case study explores how they achieved this growth and how other small businesses can apply similar strategies.

CASE STUDY OVERVIEW

• Business Name: Natural Beauty Club
• Industry: Subscription Beauty Business
• Challenge: Low additional revenue beyond standard subscriptions
• Solution: Strategic pricing, product bundling, and email marketing for upsells
• Results: 200% increase in sales

 

THE CHALLENGE

Natural Beauty Club relied primarily on its standard subscription box sales, which provided consistent revenue but limited its growth potential. Customers were engaged with their monthly beauty boxes, but the business wasn’t fully capitalizing on opportunities for additional purchases. The key challenges were:

1. Low average order value (AOV): Customers were only purchasing the standard subscription, leaving potential revenue untapped.

2. Missed upsell opportunities: Customers showed interest in complementary beauty products but weren’t incentivized to purchase them.

3. Inefficient pricing strategy: The lack of tiered pricing or premium bundle options meant lost revenue from customers willing to spend more.

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HOW THEY SOLVED THE PROBLEM

To increase sales without significantly increasing customer acquisition costs, Natural Beauty Club focused on three key strategies:

STEP 1: OPTIMIZING PRICING STRATEGIES

Pricing is one of the most critical factors that can influence customer buying behavior, impact perceived value, and drive revenue growth. Natural Beauty Club implemented a strategic pricing model that encouraged customer upgrades, improved customer retention, and increased overall revenue. Below is a breakdown of the key pricing strategies they used and the impact of each.

1. Introducing a Tiered Pricing Model to Maximize Revenue

Originally, Natural Beauty Club offered only one subscription box at a flat rate. However, this one-size-fits-all approach limited potential revenue because:

• Some customers were willing to pay more for premium products, but there was no higher-tier option.

• Budget-conscious customers might have canceled their subscription due to price sensitivity if they felt they were paying for more than they needed.

To solve this, they introduced a tiered pricing model, allowing customers to choose from three different subscription levels based on their budget and preferences:

Why This Worked:

• Encouraged Upsells: Customers were more likely to upgrade when they saw the additional value in the Deluxe and Luxury tiers.

• Catered to Different Customer Segments: Some customers preferred affordability, while others wanted exclusivity—tiered pricing gave options for both groups.

• Increased Perceived Value: By clearly showing the extra benefits in higher tiers, customers were more likely to view the more expensive options as a better deal.

Results: The introduction of tiered pricing led to a 45% increase in Deluxe and Luxury tier subscriptions, which directly boosted revenue.

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2. Offering Limited-Time Discounts for Longer Commitments

Natural Beauty Club wanted to reduce churn (cancellations) and increase long-term customer value. To encourage longer subscriptions, they introduced time-sensitive discounts based on subscription duration:

Why This Worked:

• Reduced Customer Churn: Instead of canceling after one month, more customers opted for longer-term subscriptions to take advantage of savings.

• Increased Customer Lifetime Value (CLV): Locking in subscribers for 6 or 12 months increased predictable revenue for the business.

• Created a Sense of Urgency: By making the discounts available for a limited time, customers felt encouraged to act fast before losing the deal.

How It Was Marketed:

• Email campaigns with subject lines like:
  "Save 20% Today – Lock in a Year of Beauty!"

• A countdown timer on the checkout page for limited-time savings.

• Social media promotions featuring testimonials from happy customers who had committed to longer subscriptions and enjoyed the savings.

Results: This strategy led to a 30% increase in customers choosing a 6-month or annual plan, ensuring longer customer retention and higher overall revenue per subscriber.

3. Implementing Psychological Pricing to Boost Conversions

Psychological pricing is a proven tactic that subtly influences purchasing decisions. Instead of using round numbers, Natural Beauty Club adjusted pricing to reflect a "just-below" strategy, where prices ended in .99 instead of whole numbers.

Examples of Psychological Pricing in Action:

• Deluxe Box: Instead of pricing at $50, it was set at $49.99 to make it appear cheaper.

• Luxury Box: Priced at $79.99 instead of $80, giving customers the impression of spending less.

• Mystery Bundle Add-On: Originally planned to be $20, but changed to $19.95, making it seem more affordable.

Why This Worked:

• Perceived Affordability: Customers tend to focus on the first digits in a price. "$49.99" feels significantly lower than "$50," even though the difference is only one cent.

• Higher Conversions at Checkout: A/B testing showed that customers were more likely to complete purchases with ".99" pricing compared to rounded numbers.

• Enhanced Perceived Value in Premium Tiers: The jump from $29.99 to $49.99 felt like a justified price increase due to the additional benefits included.

 Results: Conversion rates at checkout increased by 18%, simply by adjusting how prices were displayed.

Final Impact of Pricing Optimization on Revenue Growth

By combining tiered pricing, long-term discounts, and psychological pricing, Natural Beauty Club successfully:
Increased revenue by 200% by encouraging higher-tier subscriptions and longer commitments.
Boosted customer retention by offering savings for extended plans.
Improved conversion rates at checkout with simple but effective pricing psychology.

Key Takeaways for Small Businesses:

1️ Use tiered pricing to encourage customers to upgrade – Offer clear distinctions between different pricing plans to cater to different customer budgets.
2️ Provide discounts for long-term commitments – A small discount incentivizes customers to commit for 6 or 12 months, reducing churn and increasing predictable revenue.
3️ Implement psychological pricing for higher conversions – Simple adjustments, like ending prices in .99, can significantly improve purchasing behavior.

By applying these pricing strategies, small subscription businesses like Natural Beauty Club can maximize revenue, increase customer retention, and enhance overall profitability.

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STEP 2: CREATING EFFECTIVE PRODUCT BUNDLES

Creating Effective Product Bundles

Product bundling is a powerful strategy that can increase average order value (AOV) and make shopping more convenient and attractive for customers. For Natural Beauty Club, bundling products offered a win-win solution — customers received curated packages of complementary items at a discounted price, while the business generated increased sales and customer satisfaction. Below is a detailed breakdown of how Natural Beauty Club created and marketed its product bundles.

1. Bundling Complementary Products

Natural Beauty Club introduced bundles that paired products with similar benefits, giving customers the chance to purchase a complete beauty routine at a discounted price. This approach increased the perceived value of the product offering, making it more attractive for customers to purchase the bundle rather than individual products.

How Complementary Bundles Were Implemented:

• Skincare Subscription with Complementary Add-ons:

• Bundle Example: A customer subscribed to a monthly skincare box that included a face cleanser, but they were also interested in complementary products like an exfoliator and a serum. Natural Beauty Club curated a special bundle that paired the cleansing products with a matching exfoliator and serum. This ensured that customers could experience a complete skincare routine, encouraging them to purchase the bundle for a better overall value.

• Customer Benefits: Customers received a complete skincare regimen in one purchase, saving time and money on individual products.

• Business Benefits: The business increased the average order value (AOV) by encouraging customers to buy more products. Bundling also increased the perceived value of the offerings, as customers felt they were getting more for less.

• Haircare Bundles:

• For customers who subscribed to haircare boxes, Natural Beauty Club curated bundles that included shampoos, conditioners, and hair masks. These bundles provided everything a customer needed for a complete haircare routine, driving up sales and reducing the time customers had to spend deciding what additional products to buy.

 Results:
Customers who purchased complementary bundles tended to spend more per transaction, leading to a 25% increase in average order value. Offering complete routines also boosted customer satisfaction, as they appreciated the thoughtfulness behind the curated products.

2. Offering a "Mystery Bundle" as an Add-on

One of the more creative ways Natural Beauty Club boosted sales was by introducing a “Mystery Bundle” add-on option. This type of bundle entices customers with the element of surprise, encouraging them to make an impulse purchase while getting the opportunity to try new products.

How Mystery Bundles Were Structured:

• Mystery Bundle Concept:

• The Mystery Bundle was sold at a discounted price, offering 3-5 products without revealing exactly what customers would receive. The bundle could include various beauty items such as full-size skincare products, trial-size items, or limited-edition items not available in the regular subscription box.

• Customers were told they would receive products worth at least 30% more than the price of the bundle, ensuring the value proposition was clear and appealing.

• Add-On Marketing:

• The Mystery Bundle was marketed as an add-on product in the checkout process, appearing as an easy and irresistible option to enhance the customer’s current subscription.

• Email campaigns promoted the Mystery Bundle during seasonal sales or special occasions, like Black Friday or New Year’s promotions.

• Subject lines like "Unwrap the Surprise — Mystery Bundle with Your Order!" and “Limited-Time Mystery Bundle for $X” sparked curiosity and encouraged quick purchasing decisions.

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Customer Benefits:

• The Mystery Bundle provid

• ed an element of fun and excitement for customers. Many were excited to receive a surprise, especially when they were able to try new products that might become future favorites.

• The bundle helped customers discover products they wouldn't have normally purchased, increasing the likelihood of future purchases from the brand.

Business Benefits:

• Higher conversion rates during the checkout process as customers were drawn to the discounted mystery bundles.

• Increased sales volume without additional advertising spend, since existing customers were encouraged to buy more.

• Improved inventory turnover as slow-moving products could be included in the mystery bundles.

Results:
The Mystery Bundle created a sense of urgency and exclusivity, leading to a 30% increase in upsells and an overall 20% rise in customer engagement with the brand.

3. Creating Seasonal Bundles

Seasonal bundling involves curating products that are specifically tailored to meet the needs of customers during different times of the year. By tapping into seasonal trends and customer needs, Natural Beauty Club was able to drive additional sales while creating a sense of relevance and timeliness for their product offerings.

How Seasonal Bundles Were Developed:

• Winter Glow Set for Dry Skin:

• In winter, many customers struggle with dry, flaky skin due to cold weather. Natural Beauty Club created a Winter Glow Set designed to target this problem. The set included hydrating creams, moisturizers, body oils, and hand creams that were perfect for combating winter dryness.

• The bundle was priced at a discount compared to the cost of buying the products individually, which encouraged customers to act fast before the seasonal bundle was sold out.

• Holiday Bundles:

• During the holiday season, the company introduced giftable bundles that could be easily wrapped and gifted. These bundles featured items like holiday-themed face masks, bath salts, and candles, offering the perfect one-stop shop for gift-givers.

• Summer Glow Bundles:

• In summer, the business promoted bundles with products like sunscreens, lightweight moisturizers, and refreshing body sprays, ideal for hot weather. These seasonal bundles were marketed through emails and social media to create excitement around limited-time offers.

Customer Benefits:

• Customers received bundles that were perfect for the season, making it easier for them to meet their specific skincare needs.

• Seasonal bundles felt timely and relevant, so customers were more likely to purchase them, knowing they would not be available all year.

• Giftable options during holidays made it easier for customers to buy for friends and family, driving additional sales.

Business Benefits:

• Seasonal bundles helped Natural Beauty Club increase customer acquisition as people were drawn to products tailored to specific needs (e.g., winter skincare, and summer refreshments).

• Bundling seasonal products also helped the business clear out excess inventory from previous seasons, making room for newer products.

• Seasonal marketing campaigns, such as email promotions or social media posts, created a sense of excitement around the brand, which increased engagement and repeat business.

 Results:
Seasonal bundles led to a 40% increase in holiday sales and a 15% increase in customer lifetime value (CLV) as customers returned for the next season’s bundles.

Key Takeaways from Product Bundling

• Curating complementary products in a bundle makes it easier for customers to buy everything they need in one go, increasing average order value.

• Offering Mystery Bundles provides a fun and low-risk way for customers to try new products while allowing the business to offload slower-moving inventory.

• Seasonal bundles resonate with customer needs and create a sense of urgency, encouraging customers to act fast and take advantage of time-sensitive offers.

By implementing these bundling strategies, Natural Beauty Club was able to drive higher sales and enhance customer satisfaction, proving that thoughtfully bundled products not only make shopping more convenient for customers but can also significantly improve the business's bottom line.

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STEP 3:USING EMAIL MARKETING FOR UPSELLS & RETARGETING

Email marketing played a critical role in Natural Beauty Club’s success by nurturing relationships with existing customers and encouraging additional purchases. Instead of relying solely on new customer acquisition, the company leveraged personalized and automated email campaigns to increase revenue from their current subscribers. Below is a detailed breakdown of how they used email marketing to drive upsells and retarget potential buyers.

1. Segmentation: Personalized Email Campaigns Based on Customer Behavior

One-size-fits-all email blasts were not converting effectively, so Natural Beauty Club segmented its email list based on customer behavior, purchase history, and preferences. This allowed them to send hyper-targeted emails that resonated with specific customer needs.

How Segmentation Was Implemented:

• Product-Based Segmentation: Customers who previously purchased skincare products were sent emails featuring complementary serums, face masks, or toners as an upsell opportunity.
• Engagement-Based Segmentation: Subscribers who frequently opened emails but hadn’t made a purchase received special discounts and personalized recommendations to encourage conversion.
• Subscription Tier Segmentation: Customers in the Basic Box ($29.99/month) received email suggestions to upgrade to the Deluxe or Luxury Box, highlighting the additional benefits they’d receive.
• Seasonal Segmentation: During winter, customers who had bought moisturizing products were targeted with hydration-focused bundles and limited-time winter skincare deals.

Results: This approach led to a 40% increase in upsell conversions, as customers received offers tailored to their preferences instead of generic promotions.

2. Abandoned Cart Reminders: Recovering Lost Sales

A significant percentage of potential buyers added products to their cart but never completed their purchase. Natural Beauty Club set up an automated abandoned cart email sequence to recover these lost sales.

How Abandoned Cart Emails Were Used:

• First Reminder (1 Hour After Abandonment): A friendly reminder with the subject line:
  "Oops! You Left Something Behind – Complete Your Order!"

• Second Reminder (24 Hours Later): A follow-up email that included a subtle incentive, such as free shipping or a 10% discount to encourage checkout.

• Final Reminder (48 Hours Later): An urgency-driven message with a limited-time offer, such as:
  "Your Cart is Expiring Soon! Grab Your Favorites Before They’re Gone!"

Results: Abandoned cart recovery emails led to a 22% increase in recovered sales, bringing back customers who otherwise would have left without making a purchase.

3. Exclusive Member Offers: Driving Loyalty & Higher Spending

Natural Beauty Club introduced a VIP Membership Perk Program to encourage loyal customers to spend more. Exclusive members received early access to new products, premium add-ons, and upsell opportunities via email.

How Exclusive Member Emails Were Used:

• "Sneak Peek" Emails: Members were given a first look at upcoming subscription box items and were offered an exclusive add-on product before public release.

• Member-Only Discounts: Subscribers received early-bird pricing for limited-edition beauty bundles.

• Personalized Birthday Offers: VIP customers got a special birthday email with a free bonus product or a discount on their next purchase.

Results: These strategies led to a 30% increase in repeat purchases, as VIP members felt valued and were incentivized to continue engaging with the brand.

4. Limited-Time Deals: Creating Urgency for Immediate Purchases

Scarcity and urgency are powerful psychological triggers, and Natural Beauty Club effectively used them in their limited-time email promotions.

How Limited-Time Email Promotions Worked:

• Flash Sales: Sent emails with subject lines like:
  "24 Hours Only! Get Our Best-Selling Beauty Bundle at 20% Off!"

• Countdown Timers: Included countdown clocks in emails to remind customers how much time they had left before the deal expired.

• Holiday & Seasonal Deals: Promoted limited-edition beauty boxes for holidays like Valentine’s Day, Mother’s Day, and Black Friday.

Results: These time-sensitive promotions led to a 45% boost in impulse purchases, as customers didn’t want to miss out on a good deal.

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Final Impact of Email Marketing on Sales Growth

By implementing segmentation, abandoned cart recovery, exclusive member perks, and limited-time deals, Natural Beauty Club transformed its email marketing strategy into a highly profitable revenue channel.

 Key Email Marketing Wins:

• 40% increase in upsell conversions (segmentation).

• 22% of abandoned carts were recovered (automated reminders).

• 30% increase in repeat purchases (exclusive member perks).

• 45% boost in impulse purchases (limited-time deals).

By personalizing email content, automating strategic follow-ups, and creating urgency, Natural Beauty Club maximized sales without relying solely on acquiring new customers. Small businesses looking to increase revenue with email marketing can implement similar strategies to see measurable growth.

RESULTS: A 200% INCREASE IN SALES

After implementing these strategies, Natural Beauty Club saw significant improvements:

•  200% increase in total sales
• 35% increase in average order value
• Higher customer retention rates due to upsell incentives
•  Better email engagement, with a 50% increase in open rates and a 30% boost in conversion rates

PREVENTING THE SAME ISSUE IN THE FUTURE

To ensure long-term success, Natural Beauty Club implemented ongoing strategies:

• A/B testing pricing & bundles to find the most effective combinations.

• Regularly updating product offerings to keep customers engaged.

• Continuously refining email marketing to maximize customer engagement.

• Tracking customer data to personalize future upsell opportunities.

After successfully increasing sales by 200% with upsells, bundles, and optimized pricing, Natural Beauty Club needed to ensure these improvements were sustainable. Without ongoing refinement, sales could plateau, customers might lose interest, and previous challenges could resurface.

To maintain long-term success, the business implemented several proactive strategies to continuously test, improve, and optimize its offerings. Below is a breakdown of how they did it.

1. A/B Testing Pricing & Bundles to Find the Most Effective Combinations

Even though Natural Beauty Club successfully implemented tiered pricing and product bundles, customer preferences and market trends can change. To ensure their pricing and bundling strategies remained optimized for maximum profitability, they used A/B testing (also known as split testing).

How A/B Testing Was Implemented:

A/B testing involves presenting two different versions of a product offering to different segments of customers and analyzing which one performs better. Natural Beauty Club applied A/B testing in multiple ways:

• Pricing Test:

• Group A saw the Basic Box priced at $29.99, while Group B saw it at $31.99 to test if a slight price increase impacted sales.

• Result: $29.99 performed better, confirming that the psychological pricing effect was a strong driver of conversions.

• Bundle Comparison Test:

• Bundle A included a skincare cleanser, serum, and moisturizer.

• Bundle B included a skincare cleanser, serum, and exfoliating scrub.

• Result: Bundle B sold 15% more, revealing that customers valued an exfoliator more than a moisturizer in a bundle.

• Subscription Tier Testing:

• Version A of the Deluxe Box emphasized premium products, while Version B highlighted early access perks.

• Result: Version B increased upgrades by 22%, indicating that customers valued exclusive access to new products.

 Ongoing Impact:
By consistently testing different pricing models, bundling structures, and product combinations, Natural Beauty Club continued to refine its offerings based on real customer behavior, ensuring long-term revenue growth.

2. Regularly Updating Product Offerings to Keep Customers Engaged

One of the biggest risks in a subscription-based business is that customers can lose interest if they receive the same type of products every month. To prevent stagnation and subscription cancellations, Natural Beauty Club implemented a dynamic product strategy to keep its offerings fresh and exciting.

How Product Offerings Were Updated:

• Seasonal Product Rotations:

• Introduced limited-edition boxes for specific seasons (e.g., "Summer Glow Box" with SPF and cooling mists, "Winter Hydration Box" with moisturizers and serums).

• Result: Increased customer excitement and engagement, leading to a 20% reduction in cancellations.

• Exclusive VIP & Customization Options:

• Allowed customers in higher-tier subscriptions to customize one product per box (e.g., choosing between a face serum or a face mask).

• Result: 38% increase in retention among Deluxe and Luxury Box subscribers, as customization made them feel more valued.

• Adding New Brands & Collaborations:

• Partnered with emerging natural beauty brands to include exclusive items in subscription boxes, offering something unique customers couldn’t find elsewhere.

• Result: Customers felt they were getting exclusive first access to trending beauty brands, increasing retention.

 Ongoing Impact:
By regularly introducing new products and limited-time collections, Natural Beauty Club kept its customers engaged and reduced the risk of subscriber fatigue.

3. Continuously Refining Email Marketing to Maximize Customer Engagement

Email marketing played a major role in increasing sales, but what worked once might not always work in the future. To keep emails effective, Natural Beauty Club continuously refined and optimized its email marketing strategy.

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Key Email Marketing Enhancements:

• Behavior-Based Email Automation:

• Emails were triggered based on specific customer actions (e.g., a customer who bought a skincare set received an upsell email for a matching toner).

• Result: Conversion rates increased by 35%, as emails felt highly personalized and relevant.

• Optimizing Subject Lines for Higher Open Rates:

• A/B tested subject lines such as:

• "Limited-Time Beauty Deal Just for You!" (Group A)

• "Nesie, Your Exclusive Skincare Bundle Awaits!" (Group B)

• Result: Personalized subject lines (Group B) had 22% higher open rates.

• Re-engagement Emails for Inactive Customers:

• Customers who hadn’t purchased in 90 days received an email with:

• A special discount or gift to encourage them to return.

• A reminder of their last purchase with a suggested complementary product.

• Result: 18% of inactive customers made a new purchase after receiving the re-engagement email.

 Ongoing Impact:
By constantly testing and refining email strategies, Natural Beauty Club kept open rates high, increased conversions, and re-engaged lost customers.

4. Tracking Customer Data to Personalize Future Upsell Opportunities

One of the most effective ways to drive sales growth is leveraging customer data to make personalized product recommendations. Natural Beauty Club used data-driven insights to predict customer needs and recommend relevant products.

How Customer Data Was Used:

• Purchase History Tracking:

• If a customer frequently bought hydrating skincare products, they were targeted with upsells for hydration-boosting serums and face masks.

• Result: Customers were 3X more likely to purchase an upsell when it matched their past purchases.

• Subscription Behavior Analysis:

• Customers in the Basic Box ($29.99/month) were sent email reminders highlighting the benefits of upgrading to Deluxe ($49.99/month) with an exclusive discount offer.

• Result: 25% of customers upgraded after receiving personalized upgrade offers.

• Cart Abandonment Follow-Ups:

• If a customer added a product to their cart but didn’t complete checkout, they received a reminder email with an additional incentive (e.g., free shipping or a small discount).

• Result: Abandoned cart recovery rates improved by 22%.

 Ongoing Impact:
By harnessing customer data and implementing personalized recommendations, Natural Beauty Club successfully increased repeat purchases and reduced churn.

Final Takeaways: Building Long-Term Success

By implementing ongoing optimization strategies, Natural Beauty Club ensured that the growth achieved from upsells and bundles wasn’t temporary. The company established a data-driven approach to continuously refine its pricing, product offerings, and marketing tactics.

Key Lessons for Other Small Businesses:
1️ Always A/B test pricing, bundles, and product positioning to determine what works best.
2️ Continuously refresh product offerings to keep customers engaged and prevent subscription fatigue.
3️ Regularly refine email marketing strategies based on performance analytics.
4️ Leverage customer data to provide highly personalized upsell opportunities.

A sustainable business model with higher retention, increased upsell conversions and long-term revenue growth.

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CONCLUSION

By focusing on strategic pricing, bundling, and email marketing, Natural Beauty Club unlocked new revenue streams and dramatically increased sales. Small businesses looking to scale can apply these methods to maximize their earnings without solely relying on acquiring new customers.

 Key Takeaway: Small subscription businesses should optimize pricing, create attractive bundles, and use targeted email marketing to increase sales and retention effectively.