Unlock an Extra $58,000/wk with Post-Purchase!

Unlock an Extra $58,000/wk with Post-Purchase! Speaker 1: Last week alone we did $58,000 in after-sale revenue and that split us like $27,000 in post-purchase and now like our cart upsells. Speaker 2: If you're able to offer something post-purchase, meaning they've already entered their credit card details, they've already completed their order, and then showing them an offer that is yes or no, I want it or not, being able to automatically add that to their order without re-entering their credit card details or anything like that, that becomes a no-brainer for brands to run. Unknown Speaker: Welcome back to another episode of Chew on This. Today's series is brought to you by AfterSell, and we'll be breaking down exactly what Brez is doing to not only get their AOV up, but some of those cool hacks that Nick's been working on with his team. And mentioning Nick, Nick, first of all, thank you so much for taking the time out to come out here all the way from California. Speaker 1: Yeah, short flight. Just so that you can help our audiences learn a little bit more about some of the things you guys have been working on, which has been really special. Speaker 2: You guys have been building in public. Speaker 1: For the maybe two or three people who don't know about you, can you give them a little bit about your background and why you're here and what you're working on today? Absolutely. So, obviously thankful for being here. It is not a short flight, but for good people, good conversation and incredible audience, people that actually want to learn and implement, this was worth the time and effort. So, my name is Nick Shackelford. You can call me Shaq. And I've been in the game for 11, almost 12 years now. I was always on the performance media side. It was structured. And then most recently, which is like what we spend a lot of our time today, is I'm a partner at Brez and I'm in charge of retention, subscription, customer experience. So I spend a lot of time thinking through How to make sure that the customer doesn't feel like they're getting upsold too aggressively or like giving the paid media team enough margin for them to kind of spend into to see like what I can do from the subscription side. So I'm all things e-com, probably more than most people on all sides, but I think that's a cool part. We care. And I'll say this, like this group of people probably care about this space more than most people care about their jobs. And so I think it's cool to continue to talk about it. Unknown Speaker: It's a great point. I think you can look at our community and look at the universe that we all sit in and I totally agree with you. There are people who truly, truly care to share, learn, exchange ideas and it's incredible. Speaker 1: Yeah, especially if you're open to doing it because the worst is like you give recommendations and nothing gaps from it. So hopefully today I'll be as tactical as possible. There's some like thought work in theory that you and I will probably go back on but I'll definitely keep it tight. Unknown Speaker: Before we get started, here's a quick thank you to today's sponsor, Aftersell. At Obvi, we recently broke $100 million in sales and I'm going to share one of the mindset shifts that helped us get there. We call it focusing on the transaction moment. It's that point when your customer has their wallet and is ready to buy. Most brands stop right there, but that's actually where the real opportunity begins. We learned this lesson with AfterSell. Since adding their app to our site, we've transformed our checkout experience into a true revenue engine. All while giving customers a more personalized experience they actually appreciate. If you're feeling the squeeze of rising ad costs and customer price sensitivity, AfterSell is the only answer. Now, let's get back to the episode. Speaker 2: So Brez, for the few people that haven't even, you know, have not heard about the brand, and if you haven't, you've been living under a rock, talk us through the brand, what it is, and maybe some of the challenges that come with it, running a brand like this on DTC. Speaker 1: So this is, so thankfully I'm a partner in this, so I'm able to like be on my core area, which is the retention side. Aaron Nospish, which is our overall founder, and he is more like the paid media acquisition We are a non-alcoholic beverage and we have THC or infused ready-to-drink beverages or cans, right? So we are shipping heavy cans to your door in 6-packs and 12-packs and 18-packs and now we have like a A liqueur, a spirit that we call it. And it's just, it's just heavy, right? Like it's one of the most expensive products in the space for a reason, which I'm sure we're going to get into. But it's, it's been something that we are DTC first people, but this year we'll now have to expand into, into retail. Like we're, we're on a path to this year. It should be about 40, 50 million. That's where we should land about 40, 50 million this year. And if we do something incredibly, if we do everything right, if we do something incredible, We could be probably around 75, but a lot of that, look, a lot of that's going to come from retail expansion that DTC has allowed us to get. And that's, I think you have to start realizing if you were spending to buy market share and with a product like ours, like similar to like your guys's, if they love it, if it's a good enough product, they're going to stick with you. Speaker 2: No, I love it. So let's dive in. You guys launch. Beverage is very difficult to get into. One of the main reasons is the shipping cost alone can basically wipe away your margin. Also, AOV is such a crucial metric for any DTC brand because customer acquisition costs are going to continue to rise and you have to be able to play within a certain threshold. Now, you guys are Bootstrap, right? Speaker 1: Yeah, no cash, just ours. Speaker 2: So, for a brand that, one, is Bootstrap, two, is going into beverage, It almost is an uphill battle that you guys are or we're facing. What does the marketing strategy look like from a contribution margin basis? How are you guys thinking about, well, all right, well, needs to be this, AOV needs to be this, so that we are profitable enough to start growing the brand. How do you guys, or how did you guys think about it back then? Speaker 1: We were really intentional at the beginning of this. And so if you look at any of our competitors in space, Cannes, Nowadays, Dessoir, Kin, There's a bunch that are in this like functional beverage space. They were built retail first, which means that their actual, their AOVs and their metrics, if you look and you did any research on who we're competing against, we're like two to three times more expensive than them because we're DTC first, meaning our AOV is $115, $130 because we need that to be able to afford any sort of the spend that we have on any of the channels we're spending on. Meta, Ablovi, we talked about that previously. What we realized is that I want to be aggressive on acquiring customers because it's a new space. The only way I'm going to do that is to get close to first purchase profitable or at least in my $60 payback. Period. And that's two metrics. It's like, you're going to be on a subscription, you're going to be on non-subscription, but you're repeat buying. Some people, like, subscription just is not for them. Like, you know that. They might love the product, but we got to get them back. So those two different types of customer cohorts, we're communicating them very differently. So our contribution margin, like our AMER, what we're targeting right now, is a 1.2. That's today. That's today. That's right now. Speaker 2: How has that changed since the beginning? Speaker 1: So we're coming up on our second year. April 420 will be our second birthday. So we're still under our first two years. And the first year, I would say all the way through until maybe Q... End of Q4 last year, beginning of Q4 last year, we were not spending a million plus dollars a month on ads. So we didn't exhaust our area. I think it's a nice space. I think it's a white space. I think it's kind of blue ocean area. So I do think there's a lot more customers coming into it, but we have so much education in the market. THC in a beverage? That's very new to people. They don't really know it. So we are, for better or for worse, educating the market on the space. So before, we were able to be profitable day one. We were able to be profitable first 30 days. And we conscious, Aaron, Brandon, the paid team were like, I am consciously going to acquire as many customers as possible because I know on my side, the subscription retention side, I got seven months to eight months of these people sticking with us. And they're AOV and it's funny you actually brought this up. So we used to do two things. We used to have a bi-weekly subscription. You can get it every two weeks and we learned after like looking through the metric, this was the highest churn product or this is the highest churn cadence. This was the highest fraud cadence. This was the worst customer service Cadence. We got rid of the bi-weekly and so now we're able to like kind of game the shipment system a little bit because delivering every other week like we are losing more money than we wanted to and especially at that discount they were giving because we're incentivizing them to do bi-weekly thinking we'd make money on it. Obviously you can skip it but everybody's on a four-week delivery. When we put our free shipping threshold at $120, we've tested on $120. We came back down to $100 and that is what we want on the subscription side because if we can do over $100 on subscription specifically, It only takes me 60 days to come back and get paid for. But we didn't know that at the beginning. And we also weren't spending what we were spending and having 15,000 subscribers. Speaker 2: So AOV being such a crucial point here, right? You mentioned one tactic which was setting your free shipping threshold at a certain level to get people up and to the right. Anything else that you guys were doing to kind of increase the AOV to obviously be able to afford, you know, the CAC that you guys were seeing and especially being such a restrictive product. I know we've spoken about how conversion rate for something like this is it's tough because creative has to have a certain messaging where you can't necessarily be very specific about what you're saying. So obviously you're gonna see a higher CAC. AOV has to be, you know, maximized. And what were some of the ways that you guys were able to do that? Speaker 1: Basically, we have to work twice as hard to get anybody to the site, which means I have to get twice as much money out of them. And the only way you can do it, like you can do, we have, we do have cart bumps, but a lot of the work that was done is we do, we have post-purchase upsells. Like we, we, we've been with AfterSell I think like a year or two years. And like, we've actively been running with them. And if we did not have them, I don't think I'd be able to give the team enough money. They would have to pull back spend so aggressively just to be paid back quicker. But if our AOV was where it used to be, which was $70, $80, now we're in the $100, $130 range. This is the shit that changed. We only had Once again, this is still the problem that we are trying to solve today. We had one core SKU and if someone wanted to technically buy more, they would just go from a 6-pack to a 12-pack. If they took the 6-pack, it's like a full ascension ladder. If you took my 6-pack, my goal is for you to double that 6-pack. If you took my 12-pack, my goal is for you to double the 12-pack. But why would I, if I went 18-pack, I'm not gonna get another 18-pack. Why would I, it's so much money and it's a lot of drinks. Why would I do that? And so the ability for us, in the simplest way, especially in the after sell, is basically you're gonna duplicate the funnel and all I care about is I'm trying to get them to bite on an A-B test of how many six-packs can I continue to have them add to their cart. And so that was really the only real approach I had is, Anyone that's starting out with trying to increase AOV, just sell them the same product at the discount that they can never get outside of that one specific offer. That was the only way that we walked through it. I mean, that's changed over time, which I'll tell you about as we've increased SKU set, but that's the best place for me to start with. Speaker 2: Got it. And that's immediately post-purchase, right? So for those who If you aren't familiar with this type of funnel, obviously you have your upsells in the cart. You may have some upsells in the checkout, but these are all somewhat of a friction point for the buyer during the journey. If you're able to offer something post-purchase, meaning they've already entered their credit card details, they've already completed their order, and then showing them an offer that is yes or no, I want it or not. Being able to automatically add that to their order without re-entering their credit card details or anything like that, that becomes a no-brainer for brands to run. Speaker 1: Dude, I'll take it even deeper for you. We, because of the space that we're in, we basically have to check ID. People have to take a photo of their ID or they get entered into your information and they validate whether you can or can't purchase our product. So we don't even have a choice. I can't even do Check out upsells. I have to do like basically trust badges and other things because I'm already losing a massive percent of consumers because they're always like, dude, why am I giving you my ID? Who the fuck are you? So we don't even have a choice where a lot of brands have to deal with that. So if you're If you have ease of getting them into cart, and like this is why I'm a big fan of, I used to be like pushing them to a cart page. I think sliding cart is one incredible thing. You guys have a great incentive with the gifts as they add more to increase AOV. We'll get there. Like that's the next thing I really want to do. But right now, our optimization is basically trust badges and reviews on checkout because again, we're still educating the space. And then after I get them into that, I go pretty gnarly on the upsell, downsell sequence because I have to. Like I don't have a choice because We'll get hit up like I think yesterday or last week alone. We did $58,000 in after-sale revenue. Speaker 2: Wow. Speaker 1: And that split us like $27,000 in post-purchase and now like our cart upsells because of the logic in the cart. That's starting to because we have more SKU sets. So if you're buying my ready-to-drinks, if you're buying my carbonated beverage, I'm selling you the spirit. The spirit is the highest AOV and we have the most margin. So right now I'm trying to put my spirit into every one of the funnels just to see if that take rate will increase. It's funny because this side of the game is how many things can you put in front of the customer to potentially be the right product and not ruin the experience. I don't know your opinion on how many is too many. Speaker 2: I mean, the initial strategy that you mentioned is just selling more of the same thing at a discount, right? It makes sense because you've just spent the last seven days bombarding them with ads, educating them on this one specific product. You have a landing page that's educating them. They've took out their credit card and they bought it. Now you're like, well, the product that you've learned about for the last seven days, I'll give you even more at a discount. It's a no-brainer. Now, the strategy here that we've tested over the last couple of weeks is actually selling them way more than we think that they need. What? So the strategy here is we sell a one-month, a three-month, and a six-month supply on the front end. Now, can we push them on a year supply at a heavy discount and just get that AOV up way more than we can, right? So there's a difference between just selling them maybe one more. Versus a 12-month supply, a few hundred dollars worth, right? Now your take rate will probably come down a little bit, but can you make it up with the actual AOV from that specific offer? Speaker 1: That's a game, right? Speaker 2: That is a game. Speaker 1: You want to do more of smaller or less? Speaker 2: I want to do way more. Now, if they don't take that, can I knock that down from a year supply to, okay, well you don't want a year, how about six months? You don't want six months? Okay, what about three months? Three months is the absolute minimum you need to see results. You should be getting three months. And so I don't think there's a... Speaker 1: So that's a three. Speaker 2: Yeah, you go from 12 to six to three. At that point, if you really don't want it, then that's fine. But I think that's probably where people should test the most and then get into the cross sell after. Speaker 1: So how do you think about, and I think about upsells very differently. It's like, not differently, Testing-wise, but definitely because my products view set is low. You have upsells that work for products that have basically one thing that they're selling and you have products that have multiple products that they're trying to sell. If someone's coming in on your funnel offer collagen, at what point do they get to see, based on the data that you have, a frequently bought with product in the upsell sequence or in the cart sequence? When do you start introducing the logic or like the science of merchandising To increase take rate. Speaker 2: Yeah, so I think from what we've seen is and we've A-B tested the first offer that they see, right? The take rate will always be higher on the product that they just saw and they just bought. I have not seen, at least for us in the situation. Speaker 1: It makes sense. Logically makes sense. It makes sense too. Speaker 2: Now, I want to increase the take rate as high as I can. Let me show them what they're most likely to get. The second step after that is going to be that cross-sell, right? So we know with our collagen-infused fat burner, we're going to sell more of that. The cross-sell might be the nighttime version of it, right? So it's still within the same lane and they still understand the concept of a collagen-infused fat burner. The fact that it's for the nighttime, I don't have to I want to educate or explain it way more than I need to because it's like, this is the product that you just got, but at night. And so I want them to get more of what they just got educated on and then try to get them on something else. And then again, something else. Speaker 1: So logic is don't let your upsell customization or like that page do the convincing of selling. Like just make it as frictionless as possible. No need to educate it. Okay. There's a concept. It's not my concept, but it's something we work with. It's called how do you sell the household? So what is it, like, as you start learning more about your customers, like, this is a mom. She's a busy mom. She maybe has a couple kids that are younger. She has a husband at the house. Maybe she has a wife at the house, whatever. And the offer is not for her. The offer is, think about your household. Like, who else could be using that product? And so you guys have incredible bundles and structures around this. And I'm like, we're about to do this too. Like, we have a, what we call the quad, where you can buy all of our products. We're trying to find a way that after they've had multiple purchases and they're not subscribed, and this is like a test that will go live hopefully this week, you bought from me multiple times. So you clearly love the product. Why have you not subscribed? I don't need that to be an email. I need that to be in the upsell sequence. I need that to be post-purchase immediately. So that integration, like the subscription said, is very important for that to happen. And that offer is also very congruent, because you're a repeat buyer. You can't have the same upsells and downsells for the customer that has already bought from you multiple times. And I don't think, even us, like now that I'm saying this out loud, even us, like we need to rethink that process of, they've bought from me multiple times, They are still getting the same offer that they got when they came in from the first offer as a new customer. That's incongruent. That's incongruent with the customer journey. So I think even now as I'm vocalizing this, you need two funnels. You need Have already bought, so it's you come in, never bought before, first time buying, you try to maximize as much AOV as possible for the paid team. Cool. They're already acquired. They're coming back and buying again. Maybe they're coming from email. Maybe they're remembering. Maybe they're seeing an ad on remarketing. They should not get that same offer. They should get something like, you enjoyed this so much, you're clearly buying it again. Have you checked out anything else that's congruent to this product? I think that's where I have to go next. Speaker 2: Yeah, that makes sense. I don't think enough people are splitting it by new customer versus returning because we're all trying to optimize our acquisition funnels, right, at the end of the day. And we're all just trying to send emails and make retention revenue and think that's enough. Speaker 1: No, but I think it is enough at the beginning. But as you start getting where like the, these are like the little dials, like you're going to turn the big ones, the volume's going to go up. But then you're like, all right, like I got to hear a little bit more bass specifically. I think that's where the dials start to get turned up. And we can't even do, I think, This is something that I've been trying to understand. I wonder how other brands do this. At what point do you start offering something on upsell or in cart that they actually can't buy? They can't get access to this on the website. The only place that they get this is a truly an exclusive offer in cart or in upsell. It's a good idea. I think Adidas does this or Nike. One of the two big dogs. You can start scrolling. There's some products that's grayed out where you can't buy unless you're a member or if you're like a part of like the club or whatever. So they're showing you it like, oh, if you want to actually have access to buy this, you actually have to be in the membership. I think it's actually free. You just have to give email and info. There might be a tier or a flavor or a version that you can't actually get unless you're in subscription or you've like bought before or there's some sort of like gate keeping mechanism that I'm very curious on how people can play with. Unknown Speaker: Quick break to say thank you to today's sponsor, AfterSell. Let's talk about control in e-commerce because here's the truth. We spend countless hours mastering marketing platforms we don't own or control. One algorithm change or one policy update and everything gets turned upside down. That's why we started to focus on something we actually have control over and that's our checkout experience. With AfterSell, we've built a conversion engine that's immune to platform changes. We're capturing more value from every visitor regardless of what's happening with Meta or Google. Our average order value went up by 15%. On top of that, with optimized post-purchase offers, we're earning even an extra 50 cents per order with rock thanks. And on top of all of this, we're seeing better conversion rates, even with higher cart values. Let that sink in. Stop pouring all your energy into external platforms and start maximizing what you actually own. Try Aftersell free for 60 days. It's time to take control of your growth. Now, let's get back to the episode. I think a lot of people talk about, kind of off of your point, which is, again, I always like to hear people's concerns when it comes to setting up this or different channels and stuff like that. I think one thing I hear is like, oh, I don't want to show somebody how discounted my product can get. Because it's going to then make them a routine discount shopper or searcher. Some people have fallacies where like, oh, if someone sees that they can get this product for half the price, then they're going to go back to their cart and try and not shop with us because they know that the price can go so low. It feels like it's a very It's a mindset that doesn't really have much data backing it, but it's all just more like, here's how I feel. Any thoughts here? Again, you've seen a lot. You've worked on a lot of brands, this and that. You've tested a lot. What's the one thing you'd give advice to? Because I think there's a bunch of people in the audience who fit this criteria. I'm just curious, how do you navigate this? Speaker 1: We do a lot of our offers or advertisements on pages that you can't find. You guys have found it because you guys care and you guys are marketers in space. Maybe you care about the space as well at the level that we do. But the general consumer, the uneducated consumer, the someone that's just on ads clicking and going through, they're not hunting your pages or signing up to wait for the abandoned cart discount to hit. I think that the emotion tied to, I don't necessarily want to be discounting on the front end unless they're subscribing, which is what we do, or they're giving me something. They can get a microtransaction of I'm voluntarily giving you information number, email, and that is in exchange for some sort of monetary discount. I think there's something wrong with that. I think that is expected in the consumerism right now. I think in 2025 specifically, a lot of people are willing to pay more for free shipping even if That means they're spending and paying more. Just the fact that they get to see the free shipping. So the perfect place for me to do these tests are in locked-in landing pages. So landing pages that you cannot naturally navigate to. Two, it is post-purchase or in-cart, which means that they've had to do multiple actions, especially post-purchase. I'll just speak about this specifically. We have two tests running on our BESQ, which is a six-pack of a 7.5 ounce. And the literal split test that we're running is this is a 12% off. This is an 8% off. Those are numbers that are weird enough to be like, why is this this much off? And it's not so deep where you're like, wow, I am losing on losing my ass on this because there is some sort of like contribution margin optimization around getting them to spend more and getting that package shipped out to them, right? So there is some savings there depending on how 3PL structures are set up. But on this one specifically, if I'm going to run any sort of Cost test or discount test, it's actually going to be post-purchase when not many people can see it and it's like kind of a one-to-one experience with the person that just gave us money. Because I do think there's apps that we know that run this where you can like split test your price points. You need a lot of data. You need a lot of spending. It's expensive. So if you were very curious on like if you had enough people doing a post-purchase on a specific discount that they've had without them worrying about quantity because now they're doubling up everything, you might get some good learnings on what the price could potentially be. And I think about this like this. Our goal is, like you've mentioned, spend as much money as possible to acquire as many customers as possible so that they spend as much money with us as possible. Something will give. And right now, it's very expensive to get traffic. It is very expensive to spend any money. And so the only way that we can really combat this, which is AOV increase. Well, outside of launching a bunch of new product, which is really expensive, or doing the R&D to get new products on the market, you can use, I mean, I know in the SUP space, you can use like SUPL4, the guys that where you can like add different types of products where you don't have to touch any of the dropshipping stuff. But there is ways of, the only thing that you can do to increase initial AOV with the most cost-effective way is selling them more of what they've already bought or something very congruent. When you look at, you know, we're obviously all users of AfterSell here. Yeah, yeah. You know, they've also elevated their product with, I don't know if you guys are testing it, but Rocked. Speaker 2: After their acquisition with Rock, they came out with a product called Network Offers or Rock Thanks, where they're being able to show a small ad on your thank you page. Speaker 1: And, you know, whether pushing something like Hulu or Netflix subscription in exchange for giving you just pure play profit to show that. Are you guys testing it? We're waiting for it because the congruency of our product, they can't serve the type of, like I would want a wellness product. I would want to control the type of products being put in, which you can opt in and choose. But when I went through, like when I jumped on the team, actually talked with them through this, I was like, I want to run this. I would love to have more profitability, especially when I've already spent money to acquire them. But I can't, for a congruency of brand, Which they care about more than us sometimes, but there just wasn't anything on there that I could grab. But I'm in the TTC space, so what am I going to offer? I think for the brands that are going... This offer makes sense. My consumers are consuming. For you guys, it makes total sense. Hulu, Peacock, and any of these areas where they're binge-watching Bachelor or any sort of the drama shows, the congruency is very there because they're the same demographic. Unknown Speaker: Yeah, makes complete sense. I think the one thing that we've learned Especially whether it's whatever tool you're using, right? I mean, I think there's a reason AfterSell is a leader of it, but I think one thing that a lot of people I think might have to shift their mindset to is how these tools are working into your system in terms of like whether it's acquisition or retention and like how it's being helpful there rather than like, I think sometimes people are still bucketing as like, oh, yeah, I run an upsell. Right. Speaker 2: And they don't understand the impact of it to the business or like you said, contribution margin optimization. And like there's some of these things where some of the tools I feel like are still bucketed outside of like the impact of the day-to-day commerce that you're running. Speaker 1: And I think Aftersell is one tool that I think finally is like been integrated fully into like, hey, like this is a tool to help you with some of these pieces. I remember when even Ash and I were talking like, you know, you can either work much harder on acquiring customers and optimizing ads and bringing the CAC down and whatnot, or you can just make people spend more so you can afford that, right? And I think that's the one piece that just becomes really interesting to talk about and see that become a bigger part of brands' mission. Well, you start talking to anybody in the 4, 5, 6 figure space and a lot, usually it's, hey, what apps are you using? It's usually, it's nine times, like, that's every question. Every event, every question, like, what are you doing for bundling? What are you doing for tech? And it's actually, we have to rethink this too on specifically customer journey. As of right now, which is very unique to most brands, we have one PDP. All products are on the same PDP. So you literally land on the PDP and you can shop and buy everything. As soon as SKU set and effect and feeling is different, that all starts to get broken up. The customer journey in that specifically is going to get segmented and we're hoping that our navigation bar is incredibly smooth. We're hoping that our cart is incredibly smooth. We're hoping that the post-purchase is incredible. The pop-up. The areas on tech that I think makes most sense that are integrated into the day-to-day life, which we need to stop talking about as like, that's my pop-up, that's my upsell. It's more of the landing experience looks like this and then until the product is delivered, it looks like that. But because, and maybe honestly it's because since Shopify doesn't have like out-of-the-box. Unknown Speaker: Yeah, that's true. Speaker 1: Everything is pieces. Correct. And it makes sense for Okay, Klaviyo has pop-ups and Shopify has subscription and they have their things but it's not their thing. So you have to go to the people on either side of these things as long as you can afford it, as long as the money in the margin makes sense. Get the people that do this specific thing or the tool that does a specific thing the best and make sure it works in your overall experience. That's probably the place I would stop with. It's crazy that this is actually a part of the thing that I manage from a customer experience or from a product learning standpoint because it's not pre-purchase, it's literally post-purchase. It's weird that the post outside of a survey or other things that people have is kind of informing or at least giving some insights into pricing of the product or where I should be merchandising. It maybe needs to be more prominent on the front because if it's being taken More than 12% more than even more than 8% and I think that the ease of learning that and Being able to implement that or tell the team hey on the front end. This needs to be way more prominent I think that is something I would I need to spend more time on especially with the information that I get from the backside Yeah, so I think I think for us to I mean that one obviously the ease of setting up stuff is great But then like obviously you want it to be impactful too. I think what's really cool is is it's easy to set up and. Speaker 2: It's obviously proving to have a lot of impact on things like AOV, but I think what's also cool is like there is these small nuggets and gems you can find out by the test that you're running, right? Speaker 1: I think we're able to sometimes identify if a product that we're trying to decide to put more bandwidth behind and see if it's going to work. Speaker 2: Do the current customers even find it to be attractive? Speaker 1: Is there a take rate indication? Speaker 2: Is there some sort of ...signal that we can get from you know how customers are interacting with it and I think you can do that in a place like AfterSell because it's simple setup but it's also very quick to give you signals and I think it's been cool to be able to use a dashboard that's friendly to do that versus otherwise like testing a product on like top of funnel I mean you guys it's expensive and time We've been able to get away with just getting small signals to understand, hey, let's put Tommy on this. Speaker 1: I would say the last thing is we have two different types of products. We're low skew and we're starting to realize we have a clear hero and then we have a clear secondary product. Now we have a third one that just launched, but when we're starting to see if I can implement the second product that's not necessarily always purchased on the front end, but they're coming back and buying the second time because the learning likes either, now I'm like, okay, this actually should be the upsell. This one I should be not having to discount as much for someone to like take and buy it because it's good enough of a product and they're coming back and kind of getting it. So now I'm moving that from the downsell into the split test on the upsell, which is something that I don't do enough of. Speaker 2: That's brilliant. I want to go back to the original topic that we kind of covered, which was the reason why we're improving AOV in the first place. And that's because as a bootstrap brand, starting off, you have no choice but to be first order profitable if you want to grow, right? Now, fast forward two years. You guys are spending a million a month on unpaid, which is incredible. At what point in the business lifecycle should people start to think about, well, we do have subscription revenue coming in. We do have a sticky product. People are buying, you know, when we send emails out and things like that. When do you sort of start thinking about that transition from CAC to AOV to CAC to LTV. Speaker 1: So we launched 4-20-20-23 and it took us basically until I think the first month and I'll be able to like share that metric with you guys like you'll see the growth. It's a crazy line. The moment we went out of sale or the moment we went out of stock and then we had to sell everything on pre-purchase, which we tweeted about this and you're like, dude, now you guys use that when you go out of stock. Speaker 2: That was the earliest- That's my evergreen message actually. Speaker 1: Oh, seriously? Speaker 2: Yeah. We actually A-B tested it and it had a lift over two weeks and now it's my evergreen message. Speaker 1: That is amazing. That's sick. That changed the game for us. That was literally Aaron tweeted. Hey, how would you make this better? And then it periodically got incredible and then our team was good enough to build it. Speaker 2: It's literally like game-changing. I think when you guys ran out of stock, it was like, reserve your order right now. This will get shipped out this date. Speaker 1: Correct. And it was like little bubbles of 75% taken for shipping on May whatever. So that went live, I think, September, right before Q4. And up until that point, we weren't spending enough money. We were maybe spending $15,000 to $30,000. Like I said, that's a little bit now relative to what we have. I know that's a significant amount of cash. But at that point, we were still able, like the AOV was $60,000 to $80,000 and we were spending a couple thousand bucks a day. Brand new product, it's really buzzy, the accounts are good, no problems. It's meta traffic, it's Google traffic, it's high quality traffic. Conversion was way more than what it is now. Our conversion is at 1%, sometimes less. It was like 2% or 3% back in the day. So we didn't even have after-sale put into this. We didn't have any other post-purchase other than We are sending advising people to get on to subscription. We knew subscription was going to be the play. That was actually the only discount that we provided, was like subscribe and save, essentially. And it took us until we sold out and then we realized, oh my God, the company almost died. We had no money. That until September, October, November, where all the rebills started. Because the difference between getting a rebill in the morning where they paid of $5,000 and to where today is $40,000 to $50,000, It means that you can start making decisions and go from AOV focus to LTV focus, right? And so that didn't take us until Q1, Q2 of 2024 where we had a big enough subscriber base to where that money coming in was significant. And then Brandon and the paid team were like, oh, we're getting paid back in 60 days, 90 days. And the people are sticking with seven to eight months. That's when it really switched and that's why our CAC right now we can take, we would love a $90 CAC, we would be going crazy for an $85 CAC, but we can accept up to $130, $140 because I know what they're spending on our average AOV is $150, $120 and they're sticking with me for minimum three months. So we're getting that back so fast and again it's weird because we can't claim The benefits are like, we really don't want to play in that space yet until we get real tests, real actual data on this. But I know as soon as you start replacing a major thing in our space, which is alcohol, you don't really want to go back to that because it's like an emotional thing where like, I've done so much to get away from this. This is the thing that's helped me get away from it. I'm super excited. I'm very loyal to it. And so that play was until we saw the rebills significant amounts, which was Q1, Q2. We couldn't go into LTV mode. I don't even know if brands that don't have a subscription or a quick repeat purchase rate could even think about LTV for years. Speaker 2: For us, right, I think given that we're so widespread into retail that our retention strategy has kind of shifted where it's like we have to come up with new stuff on the website otherwise you're gonna go and shop at Walmart, right? We're on people's groceries list and that's fine, right? But for us, our model is we have to be first-order profitable because the retention is decreasing as more doors open up for the brand. So for us, the way that I've run the accounts and everything has been very like, if I can spend whatever at first-order profitability, go and spend it. Now on this model, Are you guys setting certain spend targets as well? Where it's like, okay, well, we can spend up into this amount at this CAC because we know X amount of revenue is coming in from subscriptions. Speaker 1: Short answer is yes. And I went through this with James, which is our head of finance, and Brandon Fink, who's our head of paid media. Yesterday, because we're currently underpaced on new customers acquired this month, and that's the core metric that matters, because we know that this repeat rate is high for the second and third month. So if new customer CAC is too high, 130 plus, and if the new customer revenue is too low, which every month is different, like last month. Do you want me to pull this up right now? Speaker 2: Yeah. Speaker 1: Okay. So this is from our head of finance, and then this is our COO, head of finance, and their paid team, and then me. DTC first time, what our pace is, DTC returning, Amazon retail, and our bear, bull, and plan. We always give those three. What is the bear, bull, and plan? First-time customers is lagging as of right now. We're pacing for about, and this is today is the 18th, we're pacing for $798,000 in first-time DTC rev. We're pacing for 2 million for returning rev. And what we projected or like what we need for plan was we need 1.1 million new customers and we need basically 2.1 in returning. For our worst case scenario, what we wanted was 1.1 and 2.2. The bull case is 1.7 million, first-time customer, and then 2.2 returning. So what we really, really wanted, so that's what Annetta saw, including Amazon and retail, we were aiming for 5.2 million. We're probably going to fall somewhere between 4.5 and 4.2. But that process of going back and forth is literally like, and I wish I knew this, but it was like demand plan, what we just ordered, how much cash we need to get back, what Brandon can spend. And Brandon's looking at me going, he's going like, I just can't spend. And that which turns me into, hey, What is the offer that we're able to run that's acceptable discounted rate? If we aren't going to spend this money, can that turn into what I'm allowed to do on a discount and how many orders I can get discounted through email, through subscription? So I think that is the way that we're thinking about it, at least at this size. Speaker 2: Makes sense. I mean, it really goes to show how, I mean, we take it for granted, but this goes to show how important product is and how important brand is and how important the stickiness of What you're actually selling matters to the health of the business where can you, you, like, I mean, for most brands, that ratio is actually flipped, right? Where it's like, well, we'll have 80% new customer revenue and 20% retention. Speaker 1: Yeah. Speaker 2: But the game becomes infinitely easier if it's the other way around. Speaker 1: We were, we were going through our metrics yesterday and I like flagged something. We go week over week meeting on what's performance, right? And returning customers, subscription made it like 90%. And I was like, guys, that was a red flag. I was like, guys, this is wrong. What's going on here? Well, accounts went down. We had other trauma. Ads weren't hitting the right way. And we need to be sitting where I like to sit, returning customer revenue. It needs to be about between 45 and 65% of that weekly revenue. So at the end of the month, we need to be no more than 65% of what we're returning because subscription hits every single day. And that's the baseline. We don't want it to get too far because then I don't have much And Taylor Hawley talks about you don't want to squeeze the sponge. You let that load every once in a while. So there's sometimes where like, guys, I can't hit the list as much as I want to hit the list or even thinking about it in that way because we haven't acquired enough customers that well. Speaker 2: Makes sense. Speaker 1: It's a balance. Speaker 2: Love that. A lot of strategic gems dropped in this episode, especially around increasing AOV and why that's important and how to actually do that in a post-purchase experience. If there was one thing you want listeners to take back and implement in their business today, what would that one thing be? Speaker 1: I think you have to look at post-purchase or even in-cart purchases as like a separate channel. I think it needs to be broken out and measured. Take rate is the metric that we care about the most and then AOV increase is the second best right behind that. But after sell or even just like any app that you're using that's improving AOV, That is a separate channel and that needs to be like treated with the intensity as much as like optimizing meta or optimizing email is. And I think that if you can approach it that way, your intensity and your thought process around actual customer experience will go up, which hopefully tick rate comes up.