We have arrived at episode #10 of the eCommerce Growth Show. This is so exciting because the best is yet to come!
Our latest guest was Jesse Horwitz, Co-Founder & CEO at Hubble Contacts, an eCommerce contact lens company, one of America’s fastest-growing direct-to-consumer eCommerce companies. This session is dedicated to all entrepreneurs who are facing head-on the current COVID pandemic times and are on the lookout for the best ways to run their D2C business from the comfort of their homes (we’re all aware of social distancing, right?).
Who is Jesse Horwitz?
Apart from being the co-founder and co-CEO at Hubble Contacts, Jessie is also a serial entrepreneur and author. His recently published book, “Selling Naked”, is a guide to help entrepreneurs start and integrate a successful D2C (direct-to-consumer) business by using paid marketing social media channels.
Jesse Horwitz and co-founder Ben Cogan earned spots on Forbes’ “30 Under 30” list in 2017, and over the past two years have extended Hubble’s footprint around the world.
Key takeaways from this episode
How to use customer experience tracking metrics: NPS (Net Promoter Score) and CLV (Customer Lifetime Value)
The thing I see most advertisers doing, when you’re not talking about subscription where you can look at churn, and when you’re talking about repurchase on a single order product is – generally the conservative thing to do – to budget for first-order profitability and then maybe you get very high conviction over time that you can bid up higher than that. But that’s when you’ve been around a few years and you actually have good robust data on repurchase rate.
The other thing is it helps – whether you’re subscription or single order – to have enough old cohorts throwing off profit dollars with minimal marketing investment so that you can bid higher. So, if you’re in the repurchase business – let’s say you’re in a business driven by repurchase – and you think “I get one order upfront but I’m going to get two or three orders lifetime.” If you wait a couple of years for those repurchase orders to come back in for the value of those older cohorts to flow through, that’s giving you an extra budget of margin dollars to bid with if you do want to bid up on the acquisition side.
An eCommerce healthy business model during pandemic times
Think about fundraising as it’s not just like a discrete process you get through, but as a part of your ongoing responsibilities. To the extent that you think your business is going to require capital, you should be meeting with investors on an ongoing basis, trying to establish three or four new investor relationships every week honestly, for a few reasons:
- Talking to more folks means you’re getting more feedback which means you’re identifying with weak or strong about your business model.
- Investors are often a good source of ideas or referrals to other sources of capital that might be appropriate.
- There’s some flukiness and there’s some randomness and maybe if you meet with 10 guys, 9 of them won’t like you and the tenth will go crazy for you. What happens more is investors of a certain type will generally look at a situation similarly, but that the community of investors is more heterogeneous than you realize. Depending on the quirks of your business, maybe you don’t resonate with consumer investors but you resonate with some sort of industry specialist about life sciences or something like that. Or maybe there’re just capital types that you haven’t considered and you learn about those and build those relationships through more traditional investors.
“The chance to place the next order” pattern: after the 3rd order, the chances to place the 4th order are skyrocketing
I see it with a couple that businesses that I advise where they’ve done a really good job at increasing customer value over time and getting more value out of their acquired customers. There are two things that I’ve seen that drive:
- Robust e-mail marketing campaigns
Those are the customers you’ve already paid for so why not be hitting them again? Why not be reaching back out to them?
- Expanding product catalog
Expanding product catalog is great because you think about, “OK, I can put more money into just paid acquisition.” But that’s pushing on a string at some point and people complain, “Oh, the CPAs are rising!” It’s not that the CPAs are rising, it’s that you’re trying to shove more money in there than you can profitably deploy and that looks like your CPAs are spiking when you’re just pushing for volume that isn’t there.
If you take the dollars and you put them to more inventory and deeper product catalog, that’s both going to increase conversion rate on first sessions, so it’s going to make your paid marketing program more efficient, but it’s also going to allow you to increase value on all your existing customers.
Just remarketing them can drive some value, but especially if you’re coming back to them and you’re saying, “Look at this new collection! Look at what we have to offer you now! Look at these new accessories!”, they’re already your customer and they already like you. Now they have a compelling reason to come back to the site and buy again.
Our next episode is going to be a great meeting with André Morys, CEO & Founder at konversionsKRAFT, who will share 5 quick wins to find out what blocks your customers from buying.
Tune in for the first episode of July on Tuesday, July 2nd at 3 PM UK / 10 AM EDT.
