Good postmortem of what happened at ShoeDazzle when they brought in an ecommerce vet who had no experience with subscription commerce. He failed to understand that the business was inherently different enough where he ran it into a ground:
When Bill Strauss took the reins of ShoeDazzle, he deemed its 10 million members insufficient and set about trying to bring in millions more by jettisoning membership and opening the site to anyone. What he didn’t understand was that those initial existing members loved the brand — they were not only acting as brand ambassadors to spread awareness of the site, but were also likely to continue buying over time. Compared to cultivated members, customers are less loyal, more fickle, and harder to please.
Further, the typical retail metric of cost of customer acquisition is less relevant than customer lifetime value. It may cost more to acquire a quality customer, but she will produce a greater return with higher value/more frequent purchases, longer retention, and brand advocacy. A subscription business model requires a longer-term view on metrics.