How to Build Recurring Revenue That Sticks

Secrets to a successful subscription product.

Author

Pietro Saccomani
November 13, 2025

Every brand wants recurring revenue. It’s the holy grail in ecommerce — especially with how tough acquisition has become lately.

That’s why “subscribe & save” has exploded. Nearly every brand has either tried to launch a subscription or wondered how to make their product fit one.

Subscriptions aren’t a trend — they’re how profitable ecommerce brands are built today.

But it’s not as simple as adding a “Subscribe & Save” button and watching the money roll in.

It takes a smart acquisition strategy, an offer that keeps people from churning, and a product that fits (though many that don’t seem to actually can).

We just had a great conversation on the pod with Andriy Rudnyk, who helps brands build subscription products that generate predictable recurring revenue.

It hit close to home — every company I’ve built (including MobiLoud) runs on recurring revenue.

If you’re exploring a new growth lever for 2026 — or your first subscription attempt didn’t quite stick — here’s what separates high-performing subscription products from the rest.

8 Things You Need to Know About Building a Successful Subscription Product

1. Profit on Day 1 is a myth. Focus on payback period, not ROAS.

You can’t expect to make strong first-order profits and build recurring revenue. Upfront, you’ll likely lose money. And that’s okay.

The goal:

  • Achieve CAC payback within 60-90 days

  • Ensure your LTV comfortably exceeds CAC

Once you’re breaking even fast, everything after that is profit; $0 CAC sales.

2. Great onboarding beats great acquisition.

Most churn happens before the second order, usually because customers don’t understand how to use the product or what to expect.

Your job:

  • Teach usage

  • Set timelines

  • Prevent common mistakes

  • Build habits fast

A great onboarding experience saves more subscribers than any “retention hack.”

Your goal should be to get to the point where the customer would get FOMO if the second order didn’t come.

3. Clear expectations kill churn.

Customers churn when expectations don’t match reality.

Make the first order a “win” by clearly explaining:

  • When results should happen

  • How much to use

  • What to expect along the way

And don’t embellish the benefits just to get people in the door. You’ll just end up losing money when customers get the real experience, and they churn (taking their first-order discount with them).

4. Cadence matters more than you think.

“Too much product” is the #1 reason people cancel their subscription.

It’s usually not dissatisfaction. It’s a frequency mismatch.

They’re getting more than they need. They’ve got boxes and boxes of toothpaste stacking up at home.

If you can get the cadence perfect, where new items show up right on time, great.

Otherwise, offer flexible cycles (6, 8, 10, 12 weeks). And let customers easily pause, skip, or delay without friction.

Don’t think of a pause or skip as a lost sale. Think of it as preserving the subscription. A skipped order is better than a cancellation.

5. Your first-order experience decides your LTV.

If a customer rates their first order highly, they’re very likely to stick.

If not, your subscription math collapses.

Everything, from flavor to packaging to usability, shapes that first impression. Nail it, and you’ve bought yourself time to hit CAC payback.

6. Getting your offer design right

Every subscription needs a reason to commit to recurring billing.

Your offer design makes or breaks the economics. The wrong approach can mean minimal gains, even if subscription retention is high.

Avoid:

  • Permanent 20-25% discounts (unsustainable and attracts low-quality subs)

Do this instead:

  • Strong incentive on order #1

  • Modest perk (5-10%) on recurring orders

  • Optional free gift for subscribing

This structure attracts better customers and improves LTV.

7. Communication reduces churn — silence increases it.

Many brands under-communicate out of fear of “reminding customers to cancel.”

I’ve seen this happen a lot in SaaS too, agencies, basically any industry with automatic repeat billing.

But silence doesn’t preserve subscriptions. It kills them.

And if customers only stay because they forget to cancel, you’ve got a weak offer.

Use email, SMS, and push to reinforce value and connection. Don’t think of it as “reminding them to cancel” — think of it as reminding them why they subscribed.

8. Success = more orders, not more tricks.

One of the biggest traps with subscriptions is trying to come up with all kinds of tricks and hacks to reduce churn.

Churn matters, but it’s not the primary goal.

The formula for success relatively straightforward:

  1. How many subscribers you acquire

    (What % of first-time customers choose subscription?)

  2. How big each order is

    (AOV for subscriptions vs one-time)

  3. How many orders the average subscriber places in 12 months

    (This is the clearest churn proxy.)

Multiply them:

Subscribers x AOV x Orders per subscriber = total subscription revenue.

That’s the whole engine. Everything else fuels one of those three levers.

Is My Product a Good Fit for a Subscriptions?

“Subscriptions are great for coffee, supplements, and dog food. But my product isn’t something people use up. Does a subscription even make sense for us?”

There’s certainly a limit to how far you can push it.

Selling coffins? Probably not a great idea to offer a subscription.

But there are a lot of categories where brands are having success with subscriptions, that you might not think would be a natural fit.

  • Furniture rental: Fernish (formerly Feather) - rent, rent-to-own, or buy furniture

  • Designer clothing rental: Rent the Runway ($306M revenue) - rotating closet subscription

  • Sports niche: PenaltyBox Sports ($4.8M/year) - hockey equipment subscription

  • Pet products: BarkBox ($365M revenue) - themed dog toy and treat boxes

  • Plants: The Sill - monthly plant and planter delivery

  • Cannabis accessories: Cannabox ($4.2M/year)

  • Baseball gear: Plate Crate ($3.9M/year)

It’s not just about whether people use up your product — it’s about how often they come back.

If you’ve got repeat customers, you’ve got subscription potential.

If you don’t, consider a membership model instead — something that trades recurring value for recurring revenue.

  • VIP perks

  • exclusive product drops

  • members-only discounts

  • early access

  • free shipping

  • limited editions

  • special bundles

  • store credit

  • community perks

Think:

  • Costco

  • Sephora Beauty Insider

  • Amazon Prime

  • Lululemon membership

It’s essentially the same thing as a subscription.

Subscription or membership, it’s about giving recurring value to the customer. They give recurring revenue in exchange.

TL;DR:

Building a winning subscription product isn’t about slapping “Subscribe & Save” on your PDP. It’s about:

  • Short CAC payback

  • Strong onboarding

  • Smart offer design

  • Clear expectations

  • Regular communication

Do those right, and you’ll turn one-time buyers into predictable monthly revenue.

On the Pod

If you want to dive deeper into building a successful subscription product, check out the podcast we did with Andriy.

It’s packed full of value — covering a lot of what we discussed here, plus more.

Check out the YouTube below (or Spotify, if that’s easier).

The perfect channel for recurring revenue

Whether you’re running a subscription product, a Costco/Prime-style membership, or just a trying to turn more one-purchase customers into regulars, a mobile app is the perfect channel.

It puts your brand on your customer’s home screen, and gives you push notifications that land right on the lock screen (not the promotions tab in Gmail).

It’s a direct connection to your best customer, and the ideal way to get more repeat sales.

MobiLoud turns your existing site into an app, with no rebuilding, nearly no work to maintain, and full feature parity with your website.

Quick Hits

Shopify’s Push into Agentic AI

Shopify’s latest earnings call show the platform is planning to continue its push into AI & agentic commerce.

President Harley Finkelstein says, “AI is able to fundamentally change how we shop, moving from search to conversation.”

After integrating with OpenAI, as well as launching several agentic features for brands, expect this focus to continue in 2026.

Ecommerce’s Next Act

Still on the subject of Agentic Commerce, I thought this was a great piece. It presents some good ideas for where ecommerce & agentic AI might be heading in the near-term (without jumping right to agents doing all your shopping for you).

“Companies like Phia (which just came out of stealth mode) let you set price alerts and automatically buy items when they hit your target. It's like having a really patient friend who actually remembers to check if that thing you wanted ever goes on sale.”

Amazon Says Rufus on Pace to Add $10B Incremental Sales

Amazon CEO Andy Jassy gave a staggering quote regarding their AI shopping assistant, Rufus.

He said he expects over $10B in incremental sales generated thanks to Rufus. Launched in Beta in February 2024, the chatbot has been used by 250 million this year, with monthly active users growing 140% YoY and interactions up 210%.

How to Build a Marketing Budget for DTC Brands

Sometimes I wonder how YouTube is free.

Example: this excellent presentation from DTC heavyweights on structuring your marketing budget for next year. Well worth finding ~40 minutes to review this.

Prices Rising Across Amazon, Target, Walmart

Tariffs have had a clear impact on prices this year — and the data shows it.

The impact on average prices at major retailers is notable, with Amazon leading the way at an average 12.8% increase this year to date.

Jassy — “AI Will Accelerate the End of Brick-and-Mortar”

Are physical stores on their way out?

The rise of ecommerce over the last ~20 years changed the retail game, and put a lot of physical stores out of business. But is AI about to put the last nail in the coffin?

That’s all for now.

I’ll be back in touch next week, with more on how successful brands are doing CX and retention right.

If there’s any topic you’d like to see us dive into, for either the newsletter or the podcast, just shoot me a message here.

Until next time,

Pietro and The Retention Edge Team

PS: want to boost retention, revenue and profitability? If so, launching your own app could be the best move you make this year.

See how: go to our website to get a preview of your app for free, or shoot me a DM on LinkedIn to talk about it.