When we look at SmartyPant's active churn, there are so many reasons why a customer may cancel. Delinquent (or involuntary) churn, which are customers who's credit card or payment has failed, which sadly is one of the largest single buckets of where you're losing money.Expansion revenue, which are your existing customers that buy more product.Active churn, which are customers who are actively choosing to cancel your product.To highlight the importance here, let's look through SmartyPant's retention strategy and break down what they're doing well, and not so well, so you can learn for your own DTC business. Those subscription ecommerce companies using the tactics we're going to talk about have 2x the customer lifetime value (LTV), 2x the average order value, and 3x higher growth rates, because they're not worried about plugging a leaky retention bucket. If they're upset or not seeing the value, they'll cancel quickly. If that customer is happy, they'll keep buying from you in the long term. The beauty of the subscription model is that the relationship with the customer is baked directly into how you make money. Well, because you spend half your budget and time acquiring customers, but to be successful, you need to keep them. Most brands don't focus on this aspect of their business enough. Their retention needs a good amount of work- retention is key. Though there is a lot to learn from SmartyPants, not everything's amazing about its retention strategy. The commitment to quality and moms certainly has given them a good chunk of the $31 billion vitamin industry, leading to parents and kids raving about them in thousands of happy customer reviews. With a wide variety to choose from, parents can love these healthy treats just as much as their kids. SmartyPants cracked the code to pack their vitamins with flavor and nutrients. They’re the Christopher Nolan movie of vitamins. Mom friendly and quality doesn’t mean these nutrients are boring though. Moms are a tough consumer though, so SmartyPants focused on this profile to make sure their messaging, product, and everything involved in their experience was geared toward choosy moms. The moms hold the keys to the castle when it comes to what their kids get, and frankly what gets bought for the whole family. This commitment to quality also leads to the second factor-winning over moms. They’re broad nutrient base means it’s convenient to just take a low dose, which also saves you money. They also focused on quality density, meaning with their vitamins you don’t need a bunch of pills. The Goulds saw this and understood consumers were more quality conscious than ever, so they leaned into supplying vitamins that were non-GMO, third-party lab tested and free of synthetic everything-no fake colors, artificial flavors, or sweeteners. There are a lot of, let’s just say “not reputable” supplement manufacturers. SmartyPants success in this intensely saturated market stems from two big themes:įirst, SmartyPants committed to quality. Oh, and the fact that it’s also a $31 billion market is pretty cool, too. In 2011 she and her husband Gourdon Gould started SmartyPants Vitamins to develop a vitamins solution initially for children and then expanded to the whole family to get people on the right nutritious path. This complexity in the vitamin market attracted Courtney Nichols Goul to leave the world of biometric anti-terrorism technology-another complicated industry to say the least-to the world of health and wellness. Luckily, we’re all becoming more aware of the importance of nutrients, vitamins, and minerals, which is good, but also bad, because if you’ve ever been down a vitamin aisle at a store you know it’s incredibly overwhelming and you don’t know who to trust. Yet, guess what obesity, tooth decay, type-2 diabetes, high blood pressure, and basically all the health plights of modern society, have in common? Yea… poor nutrition. Did you know that to become a doctor you only have to take one class in nutrition.
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