Subscribe & Save Coupon Effectiveness: Case Study

Executive Summary

This case study analyzes the effectiveness of Subscribe & Save (S&S) coupons for product ASIN B08XPRM9LT (WellWell Vitamins Women's Health Supplement). The analysis focuses on relative metrics including subscription rate changes and incremental cost per subscriber across five different coupon campaigns. (Note: Brand name and ASIN have been anonymized for privacy purposes.)

• The most efficient coupon generated a 50.36% subscription rate increase at a cost of just $7.72 per new subscriber, 53%+ cheaper than a higher discount coupon.
• 12-month LTV for coupon subscribers is 124.21% higher than non-subscribers
• ROI on coupon investments ranged from 483% to 1,161% over a 12-month period
• Optimal coupon discount of $2.75 paired with the standard $2.59 S&S discount
• Achieved $84,981 in annual cost savings compared to higher discount coupons

Impact on Subscription Rates

The S&S coupon campaigns demonstrated significant positive impacts on subscription rates across all tested discount levels:

Key Insight: The coupon with the highest efficiency (subscription rate change per dollar spent) was coupon 77e18048, which increased subscription rates by 50.36% at a cost of only $7.72 per new subscriber, yielding an efficiency score of 6.52.

Subscription Rate Efficiency Analysis

To further understand the relationship between coupon discount and subscription rate change, we calculated a "subscription rate efficiency" metric that measures subscription rate change per dollar of coupon discount:

Subscription Rate Efficiency calculation: Subscription Rate Change % ÷ Coupon Discount $

Key Insight: The $2.75 coupon discount shows the highest efficiency at 18.31 percentage points of subscription rate increase per dollar spent on the coupon discount. This is more than double the efficiency of the $5.22 coupon discount, demonstrating diminishing returns at higher discount levels.

Customer Behavior Analysis

Additional metrics provide insights into customer behavior differences:

Key Insight: While coupon subscribers purchase somewhat less frequently than regular subscribers, both subscriber types show significantly higher purchase frequency and order size compared to non-subscribers.

LTV Comparison: Subscribers vs. Non-Subscribers

Lifetime Value (LTV) analysis shows significant advantages for subscribers over non-subscribers:

Return on Investment Analysis

When comparing the long-term ROI across different coupon discounts:

ROI Calculation: (LTV - Cost per Sub) ÷ Cost per Sub × 100%

Key Insight: The $2.75 coupon discount not only delivers the highest 12-month ROI at 1,161%, but the advantage persists and grows over an extended 24-month timeframe.

Annualized Impact

The most efficient coupon (77e18048) with a $2.75 coupon discount delivered the highest ROI (1,161%) and projected the highest annualized net revenue at over $1.1 million while keeping the acquisition cost low at $97,042.

Cost-Benefit Analysis of Coupon Discount Levels

Comparing the recommended $2.75 coupon discount against the higher $5.22 discount reveals significant financial advantages:

Key Insight: By implementing the recommended $2.75 coupon discount rather than the higher $5.22 discount, the company would realize a total annual financial benefit of $331,905($84,981 in direct cost savings plus $246,924 in additional revenue). This represents a significant efficiency improvement while also delivering superior subscription growth.

Data Sources & Methodology

This case study was created using ExpandFi's advanced analytics platform and the following reports:

Recommendations

Based on the analysis, we recommend:

• Optimal coupon discount: Maintain the standard $2.59 S&S discount and offer an additional $2.75 coupon discount for optimal efficiency.
• Campaign duration testing: Implement A/B testing to compare the effectiveness of different campaign durations (shorter vs. longer) to determine the optimal timeframe for maximum subscription conversion.
• Cost management: Aim for acquisition costs under $8 per new subscriber, which has proven achievable while maintaining high subscription rate increases.
• Long-term focus: While the immediate cost of coupons impacts short-term margins, the significant 12-month LTV advantage (over 124% higher than non-subscribers) justifies the investment.
• Discount strategy refinement: Avoid higher coupon discounts (>$3.00) as they significantly increase cost per subscriber without proportional subscription rate improvements.
• Discount type comparison: Test fixed dollar amount coupons against percentage-based discount coupons to determine which format drives higher subscription rates and better ROI for this product category.
• Subscription rate monitoring: Track the subscription rate change percentage as the primary KPI for coupon effectiveness, with a target of at least 40% increase over baseline rates.
• Continuous testing: Implement an ongoing testing program as coupon effectiveness can shift over time due to market conditions, competitive factors, and changing customer behaviors.
• Expansion strategy: Apply this same coupon strategy to similar products, as the data clearly demonstrates substantial ROI and positive impact on customer retention.

Conclusion

Subscribe & Save coupons for ASIN B08XPRM9LT have proven to be highly effective at driving subscription adoption with exceptional ROI. The optimal approach pairs the standard $2.59 S&S discount with an additional $2.75 coupon discount, delivering a 50.36% subscription rate increase at an incremental cost of $7.72 per new subscriber.

This strategy generates a 12-month ROI of 1,161% and transforms one-time purchasers into high-value subscribers with more than double the LTV of non-subscribers. When annualized, the most efficient coupon campaign would generate approximately $1.13 million in net revenue from an investment of just $97,042.

The analysis reveals clear patterns in coupon efficiency that can be applied to optimize subscription programs across multiple products and categories.