September 29, 2010, 12:33 PM

Online-only retailer FiltersFast boosts customer retention by selling subscriptions

The program allows consumers to control the regularity that they receive products.

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Given that consumers are regularly in the need for water and air filters, online-only filter retailer Filters Fast LLC has long known that key to customer retention is reminding consumers that it’s time to change their filters. 

“It’s hard to remember to buy and change your filters—it’s not the first thing you think of,” says Ray Scardigno, Filters Fast president.

For four years the retailer sent e-mails to consumers who had previously made a purachse at its site to remind them that it was time to order and change their filters. But the e-mails only got a click-through rate between 1% and 2%.The reason for the lack of success was that an e-mail reminder doesn’t necessarily bring the consumer back to FiltersFast.com, says Scardigno.

That’s why  the retailer dropped the reminders in March and launched a subscription service that allows consumers to sign up for automatic delivery of filters. The option, which offers consumers a 5% discount for signing up for the service, is featured on every product page.

Since introducing the subscription service roughly 5% of the site’s consumers have opted in, says Scardigno. He believes he can increase that to 15% once the site finishes adding the option to category pages and search results pages, where some of the site’s customers add items to their cart.

The service, which was launched on customer retention vendor OrderGroove’s RetentionEngine platform, allows the consumer to change the terms of the automatic delivery, such as the frequency of deliveries, or to unsubscribe at any time without penalty. Ten days before an order goes out, FiltersFast sends the consumer a reminder so that they can choose to delay delivery.

“That’s the key. We didn’t want this to feel like Columbia House,” says Scardigno, referring to the mail-order music and movie retailer. “We wanted to give the customer power.”

OrderGroove, which announced the official launch of RetentionEngine yesterday, says it is also working with retailers such as Sally Beauty Supply and Teavana.

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