E-commerce
September 17, 2026
Are you wondering how subscriptions helped Disco overcome the advertising challenges related to iOS 14.5 and Amazon?
The answer lies in one word: recurring. By focusing on a strong subscription model, Disco managed to stabilize its revenue and reduce its dependence on advertising channels that had become expensive and unpredictable.
This strategy is not without its obstacles. It requires a deep understanding of customer lifetime value, rigorous management of acquisition costs, and a flawless purchasing experience to transform an initial purchase into a lasting relationship.
So, how did subscriptions save Disco from advertising challenges? On the agenda:
Why did Disco have to face a 300% increase in its acquisition costs?
What was the impact of selling on Amazon on the brand's strategy?
How did the subscription model transform Disco's financial health?
What lessons can e-commerce merchants learn from this experience?
How can Qstomy help manage customer questions about subscriptions?
Let's get started.
Summary
Why did Disco see its acquisition costs skyrocket with iOS 14.5?
In April 2021, the iOS 14.5 update disrupted ad tracking on platforms like Facebook and Google. For Disco, a direct-to-consumer men's skincare brand, the impact was immediate: the customer acquisition cost spiked by 300% in a single month.
This sudden increase made advertising campaigns significantly less profitable. The brand, which relied heavily on these channels to attract new customers, found itself hitting a wall. Visibility into ad performance deteriorated, making campaign optimization more complex and more expensive.
This situation illustrates a major challenge for many e-commerce brands: the reliance on advertising platforms whose rules change without notice. For Disco, it became vital to find alternatives to stabilize its revenue and reduce its vulnerability. The urgency was even greater as the brand could not afford to watch its acquisition costs skyrocket without reacting quickly.
Convert over 2,000 customers on average per month with Qstomy.
The world’s 1st Shopify AI dedicated to customer conversion
Empowering 200+ e-commerce merchants
What was the impact of selling on Amazon for Disco?
In May 2021, Disco began selling its flagship product on Amazon. Very quickly, a problem arose: Amazon started bidding on the same Google keywords that Disco was using to drive traffic to its site. This direct competition drove up advertising costs and cannibalized the brand's online sales.
Faced with this untenable situation, Ben Smith, the founder, made a radical decision: to shut down Disco's presence on Amazon. The results were immediate and spectacular. The conversion rate on the site doubled, and acquisition costs on Facebook dropped significantly.
This experience shows the importance of controlling one's sales channels and not depending on platforms that can become competitors. For Disco, focusing on its site and its subscription model was far more profitable. This decision also strengthened brand consistency and the direct relationship with customers.
How did the subscription model stabilize Disco's revenue?
The subscription model has become the pillar of Disco's strategy. More than half of new customers opt for a subscription right from their first purchase. This preference for recurring transactions has a direct impact on revenue predictability and customer lifetime value.
Even though the conversion rate for subscriptions is about 8% lower than that for one-time purchases, the long-term value is significantly higher. This approach allows Disco to accept losing money on the first purchase, as profitability comes from renewals.
In times of advertising turbulence, this strategy serves as a shield. It reduces the pressure on new customer acquisition and creates a recurring revenue base that secures the company's cash flow. Furthermore, it offers better visibility for planning future investments.
What is Disco's customer loyalty strategy?
Customer loyalty at Disco is based on several pillars. The first is product quality. Ben Smith insists: the best retention strategy is to have a product that actually works. Without this, no loyalty program can be effective.
Next, the brand focuses on education and added value. New subscribers receive a 30-page booklet, a kind of "skin care bible", which guides them in their routine. This content strengthens engagement and the perception of the brand as an expert.
Finally, automated email campaigns are deployed to maintain contact and encourage renewals. This combined approach aims to maximize customer lifetime value and increase overall value. Each interaction is designed to strengthen the connection with the brand.
How does Disco measure the effectiveness of its advertising campaigns?
To navigate a complex advertising environment, Disco developed a financial model based on the marketing efficiency ratio (MER). This ratio, which divides total revenue by advertising spend, provides a clear view of overall performance.
The model, built in a spreadsheet, integrates the daily spend of each channel and splits it between subscriptions and one-time purchases. This granularity makes it possible to understand the impact of each decision on incremental revenue.
This tool is essential for allocating budgets optimally and for identifying the most profitable channels. It helps Disco make informed decisions, even when advertising data is less reliable than before. It is a definite competitive advantage in a constantly changing landscape.
What launch mistakes did Disco make?
Ben Smith recognizes two major mistakes made during the launch of Disco. The first was not hiring a marketing growth expert right from the beginning. Understanding customer acquisition, landing pages, and conversion is crucial for a startup.
The second mistake was launching with seven products. This approach, designed to offer a complete range, actually diluted efforts and increased costs. He recommends testing two or three products first, bundling them to increase the average order value, and then expanding the range.
These lessons show the importance of simplicity and focus in the early stages of a business. It is better to excel with a limited offering than to spread oneself too thin across a wide range. This discipline allowed Disco to focus on the essentials and build a solid foundation.
Why has customer lifetime value become so important?
In a context where acquiring new customers is becoming increasingly expensive, customer lifetime value (LTV) has become a central indicator. For Disco, the ability to retain and bring back customers is the key to profitability.
The subscription model is a powerful lever to increase LTV. By transforming a one-time buyer into a regular subscriber, the brand secures long-term revenue and offsets the initial acquisition cost.
This approach is a game-changer: it becomes acceptable to spend more to acquire a customer if their long-term value is high. It is this calculation that Disco has integrated into its strategy, allowing it to navigate through turbulent times. LTV has thus become the guiding light for all marketing decisions.
How did Disco learn to control its acquisition costs?
In the beginning, Disco did not have the means to hire a growth expert. So, Ben Smith had to train himself. He learned the basics of digital marketing: creating landing pages, copywriting, and conversion rate optimization.
This self-taught training was a turning point. Once the fundamentals were mastered, the brand began to scale. Understanding simple equations such as customer acquisition cost, customer lifetime value, and average order value allowed for more rational decisions to be made.
Today, Disco is in a position to hire a growth marketer to scale to the next level. This progression shows that it is possible to start without expertise, provided you are ready to learn and adapt. It is a mindset that has allowed the brand to remain agile.
What role does the product play in the retention strategy?
For Ben Smith, the product is the foundation of everything. A great product is the best retention strategy. If the product does not deliver results, no marketing campaign will be able to retain customers in the long run.
Disco was created to solve a personal problem: acne. This direct experience guided the development of natural and effective products. This authenticity is felt in the communication and creates a bond of trust with customers.
The quality of the product is therefore the first link in the retention chain. It justifies the subscription, encourages word-of-mouth, and reduces pressure on acquisition channels. A disappointing product means a lost subscriber and a wasted acquisition cost.
What lessons can e-commerce retailers learn from Disco's experience?
The story of Disco offers several lessons for e-merchants. The first is to not depend on a single acquisition channel. Diversification is essential to withstand external shocks such as changes in advertising rules.
The second is to build a business model based on recurrence. Subscriptions, or failing that, a solid loyalty strategy, help to stabilize revenue and reduce pressure on acquisition.
Finally, it is crucial to master key performance indicators. Understanding the acquisition cost, customer lifetime value, and average basket size is indispensable for making informed decisions and building sustainable growth. These lessons are universal and applicable to any e-commerce business.
How does Qstomy help manage customer questions about subscriptions?
Qstomy, the AI agent for Shopify, can help merchants manage frequently asked questions about subscriptions. It guides customers throughout their journey, from product discovery to order tracking, as well as managing their subscription.
Concretely, Qstomy can answer questions about free trials, renewal terms, cancellation policies, or even delivery options. It can also help manage requests in multiple languages, which is an asset for international brands.
By automating these interactions, Qstomy frees up time for the team and improves customer satisfaction. A seamless subscription experience is essential for reducing churn and maximizing customer lifetime value, a key goal for any e-commerce brand. It is an investment that pays off in the long term.
What is the checklist before launching a subscription model?
Before launching into a subscription model, here is a checklist to maximize your chances of success.
In brief
Product: ensure it is good enough to justify a recurring commitment.
Offer: propose a clear advantage (price, exclusivity, convenience) to encourage subscription.
Communication: plan welcome and reminder emails to maintain engagement.
Support: set up a responsive customer service to handle questions and modifications.
FAQ
How to manage customer questions about subscriptions with a free trial? Qstomy can automate answers regarding trial conditions, conversion to a paid subscription, and cancellation terms.
How to retain customers after their first purchase? A content strategy, personalized offers, and excellent customer service are effective levers, as shown by the Disco example.
How to increase sales for an e-commerce store? By optimizing the conversion funnel, offering bundled deals, and focusing on recurrence, you can stabilize and increase your revenue.
To go further: How to manage customer questions on member-only sales - Qstomy, Customer loyalty: how to increase loyalty and lifetime value - Qstomy, How to manage customer questions on subscriptions with a free trial - Qstomy, How to manage customer questions on taxes applied to gift cards - Qstomy, How to increase sales of an e-commerce store? - Qstomy, How to manage customer questions when mixing multiple languages in a conversation - Qstomy, How to manage customer questions about an offer seen in an offline advertisement - Qstomy.
Enzo
September 17, 2026
