How Grüns Builds And Measures Gift-With-Purchase Funnels transcript

Grünts is the most impressive brand in the e-commerce D2C space of any brand that you have you or I have seen at all. You know that and I know that because they just sold for a billion dollars. So, why not go investigate what they are doing and how they're building funnels and that's exactly what we're doing on this episode with senior manager at Grünts, Michael D'elia, who's going to talk to us about their their landing page, offer, gift with purchase strategy, really how they've thought about that across a bunch of different customers and a bunch of different products.

Uh Michael's going to dig into the whole strategy in a way that I think is going to be extremely helpful to you. This has been a theme recently on the In Over My Dead Body podcast talking about landing pages and offers and so we're going to get into it with somebody who's doing this at some of the most scale of anyone imaginable across a bunch of channels. Let's get into it with Michael D'elia breaking down Grünts actual funnels in the details of what has actually worked for them right now. >> [music] >> What's happening, Mike?

How you doing? >> What's up, Andrew? Thanks for having me. >> Yes, my pleasure. Big big shout out to our friends mutual friends at Intellifluence for setting up setting up a a conversation and intro. I had been wanting to dig in a little bit more to Grünts, but the problem is you guys are so monstrous in what you've accomplished that it's very hard to know like where to start in what you're doing. But it's funny that this intro happened because right before you and I started talking uh or or before we got introduced, I should say, you and I uh I I had just been hearing about and seeing and thinking about some of the specifically the sort of like funnel building mechanics of Grünts and I've been thinking like I really want to understand a little more deeply sort of how you guys have done this.

And so I I want to get kind of right into that um with you guys. Tell tell people a little bit about sort of the core funnels that you guys have run and seen success with. I think specifically you mentioned to me the idea of gift with purchase funnels, but can you just break down what you're talking about there and then we can just dig into sort of how these actually work in the actual customer acquisition flow of Grünts. >> Totally.

Yeah. Um I guess like I know the audience is like heavy into e-com here, so the word funnel probably doesn't need any definition, but I'm just going to start with one anyway to kind of like define what we're talking about here. So, what is like a funnel in this context? Funnel is add to landing page to offer, and defining like synergy between all three of those touch points. Like is the does the ad have content that's reflected on the landing page, and then in the same content is that reflected in the offer?

You know, is the gift with you're advertising the same gift with purchase someone's going to get in their cart? That's like basics 101 for like how to build a gift with purchase funnel, but it's very important because you you need that like reliability uh especially like at scale. Um, and then also just like for the consumer to ultimately finish their purchase. So, that's like the definition I'm going to continue to use. >> Great. >> Uh Taking a step back from that, I think like what makes Grüns like unique in the space is that we are a comprehensive nutritional supplement.

Like we are uh we're for everyone. We make health and wellness accessible, and therefore our TAM is like super large. So, like how do we go about like defining that and going after different use cases like for our product? Um, so we have these we have these like different sort of persona that we target, whether it be uh you know, 65 and up, those the better poops crowd, those on a GLP-1 journey, etc. And we have that content, you know, in our ads.

We then have that content in our landing pages, and then there is a dedicated sort of gift with purchase offer once you get to that landing page that is um complimentary of the of the persona that we're going after for that person. So, there's a lot of like tailoring and I would say personalization done uh to hit those persona. Um and we manage it all, you know, separately. >> So, what do you when you Let's Let's actually try to understand that a little bit more.

Um when you when you say there's tailoring to hit each persona, what Talk to me about where that process starts. >> I would say it's a a big team effort. We have a extremely talented like creative strategy team, um you know, that does a lot of like market research as well as also creative studies and testing on who's taking our product as well as like how to best communicate uh the use case of the product and where to sort of start exploring next.

So, while like I'm definitely more on the technical sort of execution side of it, I think that exploration starts at the creative level. Um you know, and then we kind of build a funnel around that once we're able to sort of see how it scales, whether it be um you know, we're able we're able to drive a lot of traffic from it and it gets a lot of like uh incremental uh you know, new visits or or or or whatnot from that new creative and and that kind of like gives us the permission to then go build around that.

But, I would say that's how it That's how that like persona mining kind of starts. >> Yeah. So, you're handed You're handed or in conversation with the persona, and then your job is to go implement within that funnel as you defined it some approach I mean, obviously not just you, but arm-in-arm with people from your team uh some approach to going and reaching those people. >> Yeah, I mean I mean, we're kind of like where we stick the landing, right?

So, it's definitely not just me. We have a extremely talented CRO team as well who's who's really kind of in the weeds of of once we have that persona, developing the content on the landing page to to best complement those ads, like writing the copy, sourcing the imagery, perhaps trying a new template, whether it be listical versus advertorial, you know, trying to see what sticks. And then I kind of come in and and archi- help architect that that offer piece, which is that, you know, final step.

Is it Is this the thing that we uh you know, that we're finally giving to our customer the the the whole package. Um and that, you know, that kind of um that kind of testing has been like pretty fruitful whether to whether whether whether to or whether not to kind of like have like a gift with purchase um available. >> Mhm. So, okay. All right, that's great. So, so somebody comes One of the things that's so interesting about this talking with you about this is that the vast majority of people listening to or watching this episode of this podcast are not going to have anywhere near the team size uh that you guys have to do this.

And so, I actually this is one of the really helpful things about talking to people who are highly specialized because as somebody who's operated and worked with a lot of brands in a very wide range, the smaller brands often like fantasize about the possibility of being able to apply a huge amounts of rigor to every single step in the funnel and see sort of how far you could push each one. But what you represent is the actual outworking of that plan over time, right?

You you can actually go and generate uh like all kinds of really specific pursuits. So, talk about sort of like uh maybe maybe one of those like I I mentioned the gift with purchase funnel as part of this on the on the front end. And I don't know if you want to start there if you have other ways you want to think about this, but um but as as you're handed that information as there's content as there's a target kind of audience that you go to implement the offer, um yeah, let give me an example of sort of how that has played out for you guys in terms of um in terms of in terms of where that lives in the in the consumer flow and uh in the consumer journey and then sort of how you're selecting and testing those offers. >> Yeah, totally.

I I I do want to touch on something you said as well with like having such a big team. Um We definitely also recognize like the diminishing returns, right? There's like there is such things like over personalization. Like are we getting too granular with our persona that we're going after the point where it doesn't really scale or uh you know it's costing so much to drive sessions here that like the margins on gift with purchase are going to work.

Yeah, totally like that that that happens. Um and you know we no longer invest there. So having that like ability to have such a large team and like go af- actually like try to take a swing at everything allows us to you know I would say like I guess find out what doesn't work a little bit faster and turn over those stones. Yeah. >> Yeah. >> Um whereas like if we're a smaller team you're you're going after the 80/20.

Um and not necessarily turning over every stone. And it's not to say you don't you should do either or. I think there's just like two two ways of of doing it and uh I think it at Grains we just we benefit from from our scale. >> And maybe just business stage too. I'm glad you clarified that cuz I actually wondered I was I was I wondered about this if you guys have gotten to a point with at sometimes where you start building these super hyper-personalized funnels that you're describing and you're just like oh that performs about the same as if we'd have been a little bit more general, you know.

Um you always kind of wonder if you don't have that kind of scale like what does this look like at the largest possible maybe not the largest possible scale but a very very large scale like you guys have experienced. Um so okay so come back around then to to that actual funnel itself. Can you talk about maybe even show I don't know if you're able to show sort of how some of that you know the offers have played out and and then I would love to break down sort of how you arrived at the offers that you arrived at. >> Yeah.

Um I mean I'm happy to pull up a landing page example but uh as far as like performance-wise gift with purchase has a lot to like a lot that it entails with. And like why do we even I think start there? I I think a lot of brands in our space are trying to wean their customers off like the the first order discount on a >> giant subscription discount >> the giant subscription discount on a monetary a monetary is wrong on on an order value basis.

Let me explain. You can have up to I'm not going to name the brand, but we there's an internal like joke. We found that there's a brand doing like up to 92% off. >> [laughter] >> Which is insanity. But they're using what they're doing is they're using the compare at prices from all the gifts. >> Yeah. >> To have that like huge number. >> Somebody DM'd me the other day, seven-figure e-commerce store owner getting towards eight figures and said, "Hey, I'm adding team members and wanted my input on who to add." And my input was, "Well, whoever you add, you must go collect resumes from good talented people in the Philippines with my friends at More Staffing." And that is because the value proposition is so straightforward here.

There are really, really talented people who grew up their whole lives speaking English. They're native English speakers. And who who can come and who have deep e-commerce resumes and be part of your team across every facet of the business, whether it's operations or design or marketing or whatever, who you can attract to your team by paying good rates in the Philippines that will still be dramatically lower than paying for equivalent talent in the US.

That is the promise of working with great people in the Philippines. Many people with deep e-commerce resumes. I know this because I am constantly hiring more people from the Philippines for my team and it has been transformative for my businesses. And so I just can't recommend it enough. At any part of your business where you're adding team members, you should at least and this is the thing, it's pretty low commitment, [music] go put together job description, collect resumes from the Philippines, take some interviews, and see what you come up with.

I bet you there's more talent available there than you think. You should go check it out. Take that step. Go get on a call with More Staffing by going to morestaffing.co/af and start collecting resumes and see what you can get back. Whether that's coordinator, manager, director level talent at any part of your business, go do it. More Staffing was built on the back of US-based e-commerce businesses. They understand specifically the e-commerce world.

They understand the roles you're looking for. They can help you find the right talent. Go check it out today. >> And and and it is so fun I mean this is the natural end point of what so many tactics actually tell you to do, right? Is like at some point if you follow these all the way there you end up saying telling people you're giving them 92% off, which is just like ridiculous. It's it's Yeah, it Yeah. >> But but what giveaway purchase is so Totally.

But like what giveaway purchase allows you to do though is increase your your I your percentage off your discount without really editing your your total discount rate on your hero product. Um so your first order um your first order margins if your giveaway purchases are are purchased correctly, uh you know, will stay about the same and while you're offering what appears to be like a a a much more value on first purchase for your customers, >> Mhm. >> what doesn't necessarily change and I think is like so key and the secret sauce of giveaway purchase is your first order to recurring order delta doesn't change all that much.

So it's like you might have a small first order discount and then your recurring price it might be the or some brands don't at all. Might be the exact same. So when that renewal comes around there's not like a sticker shock versus over indexing on a really big first order discount and then having a renewal that causes a sticker shock. So giveaway purchase allows us to pad that. It's like okay, we can discount our main product less, but say we're discounting more cuz we're giving you away free we're giving away free thing. >> okay, this is so interesting.

I have a I have a lot of sort of theories about what most brands ought to be doing at the level of discounting and subscription and some of that. One of my sneaky theories is that actually a lot of subscription brands in fact over rely on subscriptions and I don't so much mean like subscribers are definitely worth more than non-subscribers, but basically for the reason that you just said, which is that which is that like you end up not getting quite as good of retention as you think in part because the tactics that leads you to to you start implementing when you when you highly value subscribers end up hurting the value of those subscribers.

So, you end up paying a bunch of money in the form of discounts and sometimes in the form of CAC that then gets you worse customers than what you were forecasting because of that. Um so, I I don't know if that makes sense and that may or may not I'm implying nothing about the experience of Gurneys. I'm sure you guys have measured this carefully and and you may or may not even disagree with that statement and that's fine.

You're welcome to say whatever about that. But, um but I'm I'm actually really curious to hear if you guys if you are sort of privy to internal testing you guys have done or anything like that about sort of that dynamic before we get into that gift with purchase offer. Um you know, is there uh is there were you seeing data coming back that was saying, "Hey, when we gave too big of a subscription on first purchase or um or something like that when that reorder was supposed to hit, we saw a really big sticker or we saw a you know, much more churn or something like that?" >> Yeah, I mean I won't share like numbers of >> Yeah, of course of course. >> But, we're definitely paying attention to the cohorts, right?

Like, what offer did you come in on and then making sure we're looking at like your LTR and LTV accordingly to the offer that that got you to purchase. Um and I think that's what all subscription brands should be doing because like then you can really measure both LTR and LTV based on that on that offer. >> you mean by I think people know LT LTV. Can you um can you define LTR? >> revenue, which is the top line figure.

So, you're not factoring in like your marketing costs or even really using uh time as much. Uh it's just you have a predictable LTR based on the value of your subscription. >> Yeah. Yeah. So, okay. So, you guys are seeing that. So, gift with purchase in the midst of that analysis has been attractive to you guys, it sounds like is what you're saying by getting away from the raw discount, getting away from the sticker shock problem.

The gift with purchase allows you to give people a bunch of additional value up front and at the same time you you get away from the sticker shock problem that you're describing. >> In part, [clears throat] yeah. I mean, we've we've definitely we've definitely continued to scale it. So, the results we're seeing are are are positive. I think we have a lot of a lot to learn from gift with purchase, but to give a little bit more insight there, we're really thinking critically about the the gifts as being highly correlative um and I we want the gifts to be correlative to subscription longevity.

So, we're thinking critically about what we're offering in the welcome pack to be either um to be items that make you want to try more Grooons or continue your subscription or that are to be used with Grooons. To either, you know, educate you more about our product and and or or get you further into the habit as opposed to like gifts that might feel really appealing to that, you know, dopamine hit of of the purchase, but not necessarily are are conducive to forming the habit.

And not saying we've cracked it. I'm also not saying we haven't cracked it. We're just looking at We're really thinking about what we're offering there and uh it's been a really really fun building the you know, building the funnel. >> Yeah. Well, so what kinds of gifts uh have you guys given to customers then as part of the GWP? Cuz I do think, by the way, this is different. Like this does fly in the face of what a lot of subscription brands do.

They the the the things I see people do is bundling or discounting, but not necessarily I mean, some some some gift with purchase, but but not necessarily as much of that as a tactic here. >> Yeah, one of my like favorite gifts with purchase that we have right now is our our U Snacks sampler. Um and it does a lot of things like really well. So, it is a a sachet that is matched the sugar level of your purchase of um Immune, Nutrops, and Juiced uh which are are are the other brands in the portfolio.

Nu- Nutrops is functional nootropics uh for brain health and contains active ingredients like chaga and reishi. Juiced is our pre-workout gummy that has, um, you know, that gives you energy, kind of like your do-anything gummy. Um, and then immune is our immune a daily immunity gummy. Um, and then it comes with a a little insert, uh, that goes into detail about the active ingredients for each product, as well as like a QR code to go, you know, sign up and and buy that product and subscribe to that product, as well as like, you know, more details about each brand.

Uh, and then it comes with a little travel pouch, as well. So, like when you're on the go, you can put your your greens to go. Um, and you know, that's been like a stalwart in the gift with purchase experience thus far. Um, and I mean that's just like a really exciting thing to to give to customers, like people who might not even know that we have other brands in the portfolio. Um, and we can show off like how delicious these products are, as well as like how good they are for you, and how they work like complimentary to your groUns subscription, and as well as like your your health journey and goals. >> That's so smart.

I I love that. Um, and uh, and then let's talk about the actual funnel itself. So, so you start, uh, running that offer, uh, whether it was that one or different ones that you guys have run. You're running these separately as stand-alone funnels from the website, right? So, I'm not going to click click to groUns.co and then go get this particular gift with purchase. I'm assuming that's going to be more for reordering that kind of thing.

Uh, is that right? These are going to be sort of isolated funnels? >> That's our, like, we're thinking about it in in in that context. I think we've we've also experimented with, you know, is this also a lever that we can pull for like seasonal sales? Um, like do we turn it on for Memorial Day, for example, and just kind of open up our our larger paid funnel offer to the site? Obviously with some changes, right? Some stylistic changes, maybe some context, perhaps a different, you know, special order gift with purchase that's topical to the season.

Um, but we're we're thinking we're really thinking about like the divergent the divergent strategy, you know, having a uh a main kind of core site that's a little bit more brand forward and and pulls you in and and gets you to purchase for different reasons than it is like, you know, something that's a little bit more DR coming from paid social. >> Take your CRO testing way beyond the basics with the tool that most of my clients this point are using as part of their operations, as part of their optimization of their websites, and that is Intellijem, we shouted out a couple times on this episode.

That's because it is a fantastic tool used by the likes of No Less Than Groans to measure their tests. You should be using it, too. It is easy and quick to set up, and critically, it measures the impact of all of your on-site testing down to the things that matter. That means profit per visit, not just conversion rate, not just AOV, because it ties into your COGS data, so you can know exactly how your tests are actually impacting the profit output of everything that you're doing, everything that you're testing.

And of course, if you're running subscription brands like we're talking about today, Intellijem can tell you the subscription rate on different offers as well, which is of course critical to this. Also has now built-in post-purchase upsell, in checkout, in cart upsell. It's becoming a more robust app all the time that can do more for you all the time. The thing to do here is to head over to Intellijem's audit tool, which is at intellijem.io/audit, and get a free audit of the things you should be testing on your website.

Just go to intellijem.io/audit, fill in a little bit information, and and ask Intellijem what you should be testing on your website, what will really move the needle. It'll give you really cool results. It's an awesome tool. Go check it out. And and once you get past that stage and you're ready to sign up for Intellijem, which you should do, you can use the use the code Farris 20, farris20, to get 20% off your first 3 months.

Go check it out right now at the audit tool. The link for that is in the show notes. It's a great tool. When you have uh run tests to sort of discover some of these things, would you say like I do you have a percentage of what kind of tests like win? And and and even a step back from that, like uh I'm interested in in the question of sort of like uh how many offers you're testing at once and sort of even structurally anything you'd say about sort of how you're how you're deploying these kinds of tests.

Like you find this gift with purchase with this one you really like, right? With this sort of one the sugar levels matched that you mentioned earlier, right? That gift with purchase. Like how many tests did it take you to get to there? And uh and then how are you actually going about mechanically deploying those tests? >> Well, the mechanics section we can we can shout out our mutual friend IntelliGem's. Um we'll definitely >> Sure. >> rock you by IntelliGem's on on that front.

Um I mean on the it's a it's a pretty simple like uh section show hive like section using CSS um and and how we're kind of like deploying like a a product form that has the offer built in versus a product form that does not. And then doing like content changes on site um to make sure like, you know, the copy and the sale messaging reflect what offers in the in the product form. It's like super tactical and kind of nerdy on literally how we're setting up the test.

There's other like traffic filtering that we're doing for specific funnels that I won't necessarily get into, but there's like obviously like audience targeting is a part of that. Um You know, for for for the funnel. As far as like how did you get there? Um I we're constantly trying to like better understand our our consumer, especially like since we're growing so fast. And like as we as we scale, it's you know, we're we're trying to find new exciting things to put in our ad account.

Whether that's persona, whether that's offer. And I think one of the things that we hadn't tried in a while, at least when I joined Grooons, was like okay, like do we let's think again about our offer. Um and you know, there is I think like at a really high level like what's this what has this proven out? And I I don't want to like speak in any definite terms, but that there is place in our like AdMix for um results-driven marketing, which is like you poop better, you sleep better, feel better.

And then there is the the health-conscious consumer who is also very offer responsive. And there is a place to have like to to wrap the product in the context of an offer and your savings rather than like how much this is going to how much better this is going to make you feel. And there's also the relationship between the two, right? You see it first for one reason and then you say, "Oh, it's on sale. I get free stuff." Um and and kind of move you through the funnel. >> It's so interesting.

People I think don't think very much about like value as a thing in itself. Do you know Do you know what I mean? Like almost independent of the benefit. Like that that Obviously like the customer has to have some interest in the benefit of the product, but a lot of people will buy something just cuz it's kind of fun and try fun and try something new and they've heard about Koreans or whatever and they might be like pleasantly surprised by how good the product is or or something.

And and so uh yeah, it's just it's just offering people value works. Just goes really, really far. People like to get value uh out out of some kind of deal. And and I I just come across this again and again for very large brands. I've made this point a few times in the podcast recently, but um you know, seven of the biggest uh seven of the eight biggest companies in the world are tech companies. Uh the eighth is Walmart.

And so it's just like if you if you want to look at what customers like and care about a lot, they care about getting value. And so go make all the direct response ads, go tell people about how this is going to benefit you in X, Y, and Z tangible ways, but man, make those offer ads and tell people, you know, build and and make the offers themselves, of course, and tell people there's a place to do this, you know. >> Yeah, and I think like to double click on like value and overall offer testing, there's like the offer testing goes beyond your your product form.

Like it goes beyond what's in the buy box. And I think that's also like missed on some brands like Grünes is value in or offer and all in for lack of better words is the form factor is novel. Like gummy bears in a sachet, like that provides that's not like a it's way better than those messy powders. Like that's a value to customers. Our flavors, our our firecracker our firecracker pops at all. Like our Ollie Pop collaboration, like our flavors are a value to our customers and it you know, enjoyment.

And I think and also like what we have to offer. And I think there's like marketers, especially like myself coming from like more of that like catalog brand background is like, oh, offer is just like how much I can mark down the price. >> Yeah. >> Um whereas like there's really so much more to what makes a good offer. Um and you touched on like that word value and there's so I think looking looking at your brand is there's more than just intrinsic value.

There's there's so much there's so much else there for anyone for any marketer. >> Yeah, especially if you want the kind of scale that you guys are hitting like they just they're just going to have to do more of that I think at some point to reach the maximum number of customers that you want to reach. You just have to you just have to provide a lot of value to people. Um I I I love I love this point. Talk Talk to me about how you measure the the value creation on your offer tests.

How did you how have you guys gone about figuring out which tests are winners and which ones are not? This is not as this is not as simple I wouldn't think in your space as um as like sort of conversion rate went up so we win. >> Yeah, I mean conversion rate isn't always the right metric for a subscription brand that I've come to find coming from a catalog brand that like is crazy to me. Same with AOV, like AOV, RPV, that's not necessarily like uh nets out into a win.

Um so, I think like without like getting too much into detail, we look at percent of subscription orders. Um you know, percent of subscription orders per visitor, percent of total subscription orders in the uh in the test um in the test sample to understand like are we moving the needle here um in our in our overall LTR for the cohort or like are are we getting more people into subscription? Um and then as well as like looking at that cohort longer term, like are they sticking with the habit?

Like what is the day 20 What is their renewal uh you know, L LTR? Like are are we seeing Are we seeing people stick with the habit? Um and I just I I guess I heard uh Nate um Legos talk about this on the Tactical and Practical podcast of like >> Yeah. >> people are just kind of looking at the test and then moving on, but there is there is a a long tail when it comes to subscription brands and we look at the long tail.

It's like we're not When a test ends, like we're not done with it. We are revisiting the results >> Yeah. >> of several weeks later to actually stamp this as a winner or loser. Um and and that's how we validate. >> Oh, I mean, I've I've seen this happen over, you know, six months. Like a very long timelines of of value creation and that the tradeoffs are crazy on some of this stuff, right? Where it's like it's like uh you know, uh cat goes up on this offer, but retention rate goes up and AOV goes down, and you're playing all of these things against each other to try to figure out what's the actual impact on the margin once you net out all of those factors, and maybe that happens, but you get more volume in the process, so you get a lower percentage value on the higher number of custom, you know, whatever.

I mean, I'm just like kind of making those up. It's really it's really in the weeds. I think people uh don't always realize how much how much detail that there is to to look at in a timeline over which you ought to be looking at the at those sorts of things. Some of the people who I've seen who have been best in class at this measure or measure the value of their cohorts over a very long period of time and CVR code conversion rate is just the beginning and it's just it's just one little part of a part of the whole thing.

It definitely matters, it definitely has an impact, but it's like you know uh really really challenging. Um Okay, well, um what about what about um in some of these funnels? Can we talk about a little bit about halo effect? You guys are not just single channel retail at this point or single channel D2C at this point. You guys have you know Amazon business, a retail business, all those things. How do you think about uh the how do you think about the um value of these sort of offer-driven discrete funnels in terms of their ability to drive value to your other channels? >> You know I I we hypothesize that you know your introduction to Gurneys takes place in many different forms and we know we're at many different channels and where you ultimately um is kind of on the individual might be the the wrong term, but like there are so many more places to buy Gurneys now.

Um it's the D2C channel has uh you know it's it's work cut out. So I I think when we think about you know on on the channel that I'm responsible for and part of the team on for e-commerce, how do we make the the D2C stand out from other channels like Costco or Amazon where we're not able to compete on like the the readiness or the shipping, right? So um I think while the portfolio as a business is like we want to continue finding more retail channels to expand into and and and and more customers on the e-com side, you know, we definitely we see it as um a worthy challenge and a lot of the work we've been doing thus far with these like offered with offer testing is trying to build out a best-in-class D2C experience.

Like there is an inherent value that you cannot get from Costco and Amazon and only on grüns.co and we're in that process right now of like figuring out what that's supposed to be. Whether that is um you know, obviously it's subscription. You can't subscribe anywhere else, so we have that going for us, but we also have the saving on shipping, slightly you know, slightly better rates um every month or every quarter depending on how you're subscribed.

Uh and then obviously these gifts with purchase starting to come more part of a more more part of our our larger offer strategy. Um but but yeah, like we we definitely healthy competition. I think is how e-com sees it. >> Yeah. Yeah, I um I have said this uh before as well, but uh people forget that inherent to the idea of D2C is the idea that you ship someone to something to someone's door. And it's so obvious, right?

Cuz it's like that's what D2C is, but that is either a benefit or a problem to overcome for the customer. In the case of supplements that you take daily, it is a benefit because if I'm going to subscribe to something, then probably what I want to happen is I want to have those things show up at my door exactly when I need them all the time and I know exactly the replenishment rate that I need to do that. Whereas like almost anything else you have like sort of variable amounts of usage, so it lasts different amounts of time and so subscribing often is just like a clunkier experience cuz I end up with too much or too little and it's annoying or whatever it is, right?

Like for me personally I've gotten to the point finally where my coffee subscription hits at the exact right time, but I still kind of have too much sometimes, you know? It's just really hard to get uh you know, the the subscription behavior exactly right cuz you know, sometimes I make an extra cup of coffee in the morning and so it it just doesn't fit as well. Whereas like for something like a daily supplement, it is it is the perfect way to experience the product.

And therefore, it makes sense to me that um your other channels would have some role in actually driving uh value back to the website because the website is going to be the place where you can get that best. No matter how often I go to Costco, it's definitely more convenient. Costco's a big store. It's definitely more convenient for me to have the the package show up at my door than to go to, you know, aisle Z59 at Costco or whatever, you know, and uh and go and go find and go find Groen's, you know, no matter how good your placement is there, too, by the way.

So, so I just think there's um I just think there's something to that. And it makes sense to me that uh whereas for some brands, they would look at uh at channel expansion as this opportunity to get more value out of their D2C spend, for you guys, you would almost have the reverse. Channel expansion creates a way to drive more value back to D2C because the experience is so good. Now, of course, if someone's going wants to buy it every month at Costco, that's great, too.

And and plenty of people will do that. Plenty of people still just don't really want to buy online. Or another subset of people just tries to buy everything they possibly can on Amazon cuz it's the best shopping experience in the world. And I that that's kind of me. Like I just if I can get it on Amazon, I will. So, all of these things can work and it can expand your total reach in all these different ways. But um but it's just interesting to think through the the actual consumer experience of how I buy and receive the product makes a really big difference for the efficacy of each channel in a way that is beyond just like the convenience of having it show up at my house, you know? >> Definitely.

I mean, they say cans in hands in like the beverage industry. So, I think like gummies in hands or gummies in mouths like well, it is is the effect that we're having right now when we're when we're in like some omni-channel retail. Um but I I do think it like kind of like the a little bit more of like the opposite of what you were saying in the in the sense that I think it still presents a challenge for for the D2C >> sure.

For sure. Yeah. >> Well, yeah, I I there definitely is like a you know, we people are discovering us in store and then coming to our website to to learn more. Um you know, they might see a different price. Like, what if Target has like you have like, I don't know, use your red card at Target so you can get it cheaper. Things like that that we have to combat that aren't necessarily um like super obvious. So, I I still think we are we're in the mode of of of moat building and the the moat that we've chosen for is like a best-in-class uh subscriber experience that can only be had on on grounds.com. >> Yeah.

Yeah. Uh all right. Did we miss anything that we really needed to hit that would be helpful for people on this? Anything that you're sitting on, Mike, where you go like a bunch of D2C operators desperately need to hear this particular point because we've learned this and it will help them. Uh I If not, that's okay. Uh but just always want to leave a little space if there's anything super top of mind for you that just might help people. >> I think something I kind of wanted to get off my chest was I >> came from a brand that was all about profitability on the first order. >> Yeah. >> Which is a great problem to solve if you are like as a problem solver.

You want to figure out how to increase AOV. You want to figure out um how to increase that conversion rate. How to just And how to like convert new a higher number of of colder new new visitors um as much as you can. And like that's that was awesome experience to have. And I think coming to a brand that is a subscription brand where profitability on the first order like is important. We don't want to drive inefficient traffic, but it's not the business.

It's not the whole business. Um has been hard like frankly just hard to learn. >> Yeah. >> Um so, if anyone listening that's like trying to get into the supplement space or just trying to better under like trying to understand like a new business, it's possible. It just takes a lot of like grit and understanding. And really like you want to all the cool topics that we talked about about looking at revisiting tests weeks and months later and actually like looking at the looking at everything you possibly can and not leaving any stone uh unturned is uh is everything that makes good marketers great.

So, I just wanted to say that cuz it's been really helpful. >> and yeah, yeah. It's marketers and also operators, right? Cuz the cash management creates a whole big challenge and there's even questions about sort of what the right efficiency to run at is relative to your goals. You're making all these projections about the future. Um you know, I'll I'll just I'll continue to voice my my take on supplements right now, which is that it is getting so flooded that I think people are going to have to be careful about this because I think there's going to be a lot of competition for supplement share of wallet uh going forward and people are going to find all kinds of novel ways to offer to more more stuff to people because the space is is growing and has been such a good opportunity in D2C for so long.

So, um so I I think it's going to require a lot of sophistication and a lot of um intelligence around all the things that you're describing here if you're going to run the business the way that you're talking about, but it's probably the right call in supplements at least still for now. Uh Mike, thanks so much uh for doing for doing this. I asked Mike where you could follow up with him. He said LinkedIn, he's a little bit active there.

Uh but also just groons.com, go buy some groons. And uh and uh you know, we'll we can you can go look back at uh calculate how much you paid uh Mike if you got a couple purchases off this and we'll see what the calc on those on those those orders were, you know. Uh yeah. All right. Uh all right, man. Thanks very much. >> Thank you. >> [music] >> Big thanks to Mike for joining me on this show. Basically, anytime you can talk to somebody from Grooons and hear what they're doing and sophistication at which they're operating, it is helpful, I think.

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