Why Obsessing Over LTV Might Save Your Business

Why Obsessing Over LTV Might Save Your Business Speaker 1: What do you say to the brands that are choosing to front load a lot of their LTV through their offer? Speaker 2: The downside in selling six months up front or a year up front would be as if you just sacrificed the lifetime profit contribution margin of that customer. So if you're, say, selling six months up front, contribution dollars for that order is basically the same as if they'd purchased twice or once. That would be a terrible tactic. But I think in general, selling merchants six months up front is way better. And then being oversupplied that way is actually can often be better for the brand. Speaker 1: Welcome back to another episode of Chew on This. Today we have a special episode brought to you by AMP, where we have Patrick, the CEO and co-founder of AMP, and we're going to be talking about all things that are costing you without you even knowing. I'm talking about Obsessing over LTV, looking at profit, looking at things that should be turning into immediate revenue by looking at the right insights. And we have Patrick who's an expert in all the things above and we're gonna be breaking down how he's been looking at some of these things through the lenses of different brands. But before we jump in, Patrick, if you don't mind giving our listeners and our viewers the few minutes of who you are and why you're building AMP. Speaker 2: Yeah, absolutely. So my co-founder and I actually started in SaaS for e-commerce in 2013. He'd started a company called Trade Gecko that was focused on inventory and order management. This is when Shopify was doing like 16 million or 30 million a year in rev. It was mainly used by people making like Candles at Home and Beard Oil, like that sort of era of Shopify, which you guys might even be too young for. But that's where we started in EcomSass and we loved it. I was with him there for a few years and then went on to bootstrap a company. That company, Trade Gecko, was actually acquired by Intuit in peak COVID. And then my co-founder and I were finishing the ends of our own outs, me and San Francisco, him with Into it and really we just couldn't stay away from e-com. The challenges merchants were facing were totally different. You know Shopify now at this point as a platform is doing six billion in revenue. Merchants are having to use 24 to 40 different apps just on their website. Like not slack, not payroll, like none of those kind of things. We all know the App Store has like varying quality at best. Somehow everything still has like 4.7 stars, like so it's sort of hard to tell if you're about to install something that's gonna mess with all your stuff. And that's where we thought there was this opportunity to just go back to basics, build really high quality products, build products that do maybe help replace four really niche little apps that can sometimes break one another. And that's what we're doing here at AMP. So we have our analytics product, Lifetimely, and then we have a few products that are helping accelerate revenue, whether it's back in stock, upselling, like an all-in-one upselling tool, that kind of thing. Speaker 1: And I know it's funny you mentioned we have like 20 to 40 apps that And it kind of becomes daunting to sometimes even just look at that because you're just like, hey, where do you go from here? Because sometimes, you know, you got these apps for a reason. But then when you have to go back and actually understand it, it becomes pretty daunting. And from the other side, though, we've been longtime users of Lifetimely. And I think for us, the one thing that's been interesting that, you know, I want to jump right into is I know LTV is something that I feel like has kind of been fragmented in topics, right? It's like some people are like, hey, I look at LTV if I'm measuring a CAC to LTV model. Some people are like, oh, I don't really look at LTV because my product is maybe bought once and maybe once or twice more and that's about it or Some people are like, hey, I only look at LTV because I'm a subscription brand. I want to get your lens because obviously the ethos of one of your products is making sure that you can literally obsess over this one metric. What's your theory on this and what have you seen around how this one metric alone can literally shape brands, especially being able to see thousands of brands from your viewpoint? Speaker 2: Yeah, like we see thousands and thousands of brands on the product. I think, you know, you mentioned a couple of things there. You mentioned CAC to LTV, which is always great to look at, but you can't spend LTV, right? So it's one thing to look at versus, you know, we obviously support We like when brands look at profitability daily. The second example you mentioned there was around kind of durable goods or durable goods buying behavior, right, where you see somebody buy a product once and then maybe a second and third time over the life. We actually see this as some of our best stories are actually in this category where people think there isn't as much of a role of LTV to play. I think Sean from Ridge was talking about this recently who uses Lifetimely. He was talking about how, you know, when they started, they had the initial purchase price and people, and then it would just stop. Their lifetime LTV report would be initial purchase and stop. And I think they were able to get, you know, then they moved to getting a huge chunk of merchants to repurchase within that period. And that's because these products can still be gifted. They can still be, you know, you can launch a new collab with the NFL and people may upgrade their existing durable goods. And I think that, yeah, I think that's probably a category that's We see this with kitchenware, like all sorts of durable goods can be repurchased and can drive LTV and especially if you're running your CAC to LTV as if there is no LTV, you know, if you're running CAC on initial purchase. And then I think thirdly on subscription brands, we work with thousands of those as well. We love helping subscription brands, but I think we also love helping You know, like brands like Obvi, like where there's, you know, people should be repurchasing over time. You know, you should consume the product. You should be happy. Not everybody needs to be, it's not subscription or bust, right? You know, sometimes you go away, you forget to bring something you want to repurchase sooner. Sometimes you go away and it means you get a buildup of the good at home. So I think, uh, I think, frankly, the biggest challenge I see merchants face with LTV is just getting their organization to align around it. I have a couple of examples there, if you like. Speaker 1: Yeah, would love that. Speaker 2: Yeah, because it's so easy to install lifetimely, right? Like, you can get three clicks. What would take quite a while to get somebody to do the LTV analysis, like to write a Python script to do that, takes Install the app. You only need the Shopify data to do it. The problem is everybody has a day job, right? So we've been working with this brand for a while and you think you're doing the right thing. You think you even have people with job titles like retention. You have people with job titles, but even if you're the retention person, which to me would indicate that A huge component of your role is driving LTV. You've actually still just got work to do. You've got to build the campaigns. You've got to, you know, like there's still the labor element. There's still the chop wood, carry water. The way we talk about it internally anyway, because even in our business, right, to get people to focus on something, everybody still has a job to do. There's still, everyone's still got a day job. You do really need to pick one thing to be the priority. It's that sort of old trope that if you have more than one priority, you have no priorities. So I think personally, what I'm seeing the best merchants do is when you actually stare at numbers, they do go up. It's very hard to be like, hey, this is a priority. We look at it every day. Every day this number is like this. I am sad. Every day this number goes up. I am happy. That's been, I don't know, what do you guys see? What do you think in LTV? How do you all think about LTV? Speaker 3: Yeah, I think we've done this, I guess, exercise, maybe twice now, which is like a skew rationalization, right? When we first started, our whole launch process was just every two weeks, we launched a new product, whether it was like a new flavor, new product, new extension, etc, etc. Obviously at a certain point you just have way too big of a catalog to manage, right? Supply chain becomes an issue, getting through all this inventory, figuring out, you know, cash cycles and things like that. At certain points, you have to maybe cut this down and figuring out how to cut this down is probably the most important piece, right? And the way that we can look at it is one, by launches, how many people are actually buying, right? And then two, looking at that data to see are these products actually driving repurchase rates even higher, right? So when we go in, we look at the lifetime lead reports and we see, okay, well, this flavor, the customer that comes in on this flavor actually has a higher retention rate than say another flavor, right? And so when it comes down to it and we have to cut five or six flavors out of our lineup of like 15, we know exactly which ones to do, right? And so instead of just guessing like, oh, well, we personally like this flavor, we should keep it around, we're actually using the data To show that actually this flavor is worth keeping around because it actually enhances the LTV and actually increases the LTV, right? And then not only just like certain flavors, but even different products, right? So when we're trying to figure out, okay, well, what is the right product to actually push at top of funnel, right? What is the right product that is actually going to drive, you know, high AOV, but then also high LTV, right? So that we can start thinking about, you know, maybe a CAC to LTV ratio and things like that. You know, two things that we look at is one, skew rationalization, which products should we keep around? And then two, which products should we actually leverage to acquire better customers? Speaker 2: Yeah, completely agree. This is something we try and encourage merchants to do, and I think where, you know, So you're definitely in like the top quartile of merchants and the way you think about this, which is great. But that's one thing that we're really trying to encourage merchants to do more of it. Like, let's just look at a component of that, which is the post purchase piece, as if somebody is a first time customer, and they haven't checked out with one of those, you know, we all use post purchase to drive AOV. Great. It's great at that. It's awesome. I personally think sometimes the software companies take too much credit for that, like with charging percentage of revenue and stuff. I think it's ridiculous. It's like, yeah, we did this post-purchase sale. It's like, yeah, all the brand did was, you know, create a brand, come up with great products, managed to get Traffic to the site, have a site good enough to convert people to paid and like we put a little widget there and it's like we did it. We did it. But I think like jumping back right to AOV to LTV, we really encourage people to use that upsell opportunity, especially with first time customers to make sure they're buying one of the SKUs that have the highest repurchase rate just to Encourage that. Give yourself the best opportunity of that. And if there is, provided the SKUs have great gross margin, is to not as much focus on like that. Obviously AOV is important, but that is one of the best opportunities we see to drive LTV and giving brands the ability to do that. And then similarly, if somebody is returning customer, factor in their previous purchasing behavior as well, right? Speaker 1: So Patrick, I'd love to even take maybe one layer backwards for one second. Like, you take an average brand, okay, maybe not the top quartile, maybe not the bottom, but you take the average brand. They do the three clicks, they have lifetime layup, and now, you know, they see most of their data within minutes. And you start to look at this and you There's one piece of like, hey, focusing on LTV is super important, super important, super important. And sometimes it starts to feel one of those things that's like drilled into your mind, but you don't know really what to do with it. Right. And I feel like for many brands, that sometimes is the case. Right, which is like, okay, I know I need to focus on LTV. But like, there's a lot of components because typically, and I've seen this one time, too many, and maybe you have too, but typically, sometimes the person who ends up looking at Lifetimely Isn't the person who also is connected to the steps you can take to impact LTV, right? And I think there is like and I'm sure you guys are solving for this over the years of building an incredible app. But what is that solve? What is that issue? And how do you best utilize this tool when it comes to a company that has a CMO, a paid media agency, a retention email agency, but then maybe a VP of growth internally, and a marketing manager, and then a creative outsource team. And there's so many plug and play pieces here. I just want to understand, What is the right way to use this tool for people who have like this team that's kind of a typically built as hodgepodge, right? Like you have little parts of agencies, freelancers, maybe a consultant, maybe some really good leadership team, but then some really like average, you know, secondary workers. So like I'm curious like in an ideal world, have you seen maybe some of the brands use this the best way? I'd love to break that down. Speaker 2: That's great. So I think, yeah, I don't want to like call out, mention a specific brand in this example, say, but let's say we've got this, the exact scenario you painted, and they've got, they now have access to their, they can now see what their LTV is doing and their customer cohorts is doing and they're in this thing, right? They're facing this situation where you've got this slew of people you need, who all have day jobs, to corral around moving this number forward that you're now getting them to stare at. So I think number one is giving everybody access to be able to see it. A screenshot in a WhatsApp group chat, like whatever it is. And then I think the second thing is The merchants I see successfully do this. What they do is they find their baseline LTV. They organize to corral this hodgepodge group of people together. Then, like, they just pick an experiment. Like, everybody come up with a series of ideas. Hey, how are we going to increase LTV? Is it going to be a specific campaign? Are we going to do a holdout? Are we going to target it to this specific group? But just a group, like, pick a cohort and say, all right, this is our baseline LTV. We are going to increase LTV for, and it could be a thousand experiments. It could be 10. It could be two. It can be an A-B test, like, whatever it is. But we are going to run an experiment to try and drive this tool forward. I don't think I've seen a group organization like you've described ever unable to move it forward within most likely the first test, but within two tests you can do something, right? And then I think the other thing that people are I think the second thing I would add in there though is then they need to find a way of adding that into the existing flow to drive LTV. And there's a trade-off, like you've got to turn something off, right? So let's say you've done it. You've corralled the hodgepodge group. You've got the third party creative. You have your outsourced person or your freelancer who's never on the same time zone as you. You've corralled them. You've run a successful experiment. Good job. You're now thinking about how do we turn this into, say, an evergreen thing, you know, say 15 days after purchase, somebody receives this messaging or whatever. Then it comes time for the trade-off. Like, what are we changing instead? Like, let's go back through in the same way what you were saying before, Ash, about you've got to go through the catalog, look at these things, you've got to look at other, there's going to be, there's always stuff that's going out is what are we then Turn off. I'd say that's kind of level one. It's just like run an experiment, get something working. You can always get something working. Two, what are we going to turn off? And then the levels start going up from there, which is like first purchase, first-time purchase, post-purchase, focusing on the products with the LTV. What are some of the experiments you all have run? Is there anything that comes to mind? What do you think about what I just said? Does that sound rational to you? Speaker 3: Yeah, I mean, I'll use a specific example here where we were looking at LTV for subscriptions, right? Subscriptions, you can easily see which order is causing the biggest drop off, right, for most of these subscribers. Chances are it's probably order one going into order two for the most part, right? People want that subscribe and save discount and then they'll cancel right away. So that being one of the key areas to improve, right? So taking a look and seeing, okay, well, what do we do from order one to order two? I think some of the tests that we actually ran with with stay was a free gift, right? So if you actually stay on for the second order, there's a free gift mystery gift, right? We're not gonna tell you what it is, you're gonna have to find out when that order comes in, right? So that was that was the first test. And I believe we actually increased our decrease turn by 86%. Speaker 1: Right. Speaker 3: The thing here is, is that would, had we have not actually looked into the data to see where that drop off is happening, we wouldn't know exactly where to even start to even come up with an experiment to even test, right? And then after that, I believe from order two to order three is very solid from three to four is good. Four to five is where there becomes another issue, right? Now you have people who may be accumulating too much product, they haven't used it all. What is the next step here? And so the next experiment we actually tested was on month five you actually get a free month. So you stay on, you get your product for free, and then I believe we saw by month six people Actually, that from month five to month six actually jumped up because we actually gave something of value whether whether somebody actually gave that product to maybe a friend or family or they kept it. We did see that increase from from five to six. And so again, pinpointing in the data where some of these drop offs are, I think is important, especially on subscriptions is important to reduce churn, right? So people are like, How do I increase LTV? How do I increase LTV? You're thinking about like, where do I add or have people buy more products or add more products to their subscription when you should be focusing on just avoiding people canceling in the first place, right? So I think that's probably one of the experiments. Speaker 2: I think You know, we just had our offside in Singapore. The number one thing on the screen when everyone walks in is retention is growth, like helping our customers retain is the number one. It's so much more powerful to retain a customer than necessarily add a new one. I think that's a great example there, right, where you said from month one to month two, we add a gift. I think Interestingly, even on non-subscription purchases, this is where the creative angle or the sales angle can really play into people. You know what you were saying at the start around that product that's maybe bought once, an Ooni, the portable fire oven they use us, that's typically bought once. I have bought so many Oonies for people, it's like, oh my gosh, it's Father's Day. Speaker 3: Patrick, my birthday is in November, by the way. Speaker 2: That's great. They're not as easy to send as AirPods, but we can definitely get them. I actually think a little special chimney in the back of that studio would look really good with a permanent uni. Speaker 1: That would be actually great. We can actually chew on something while we're recording. Speaker 2: Next time I'll fly to New York and we can do like an actual camp hut. Speaker 1: That would be great. There you go. Unknown Speaker: That'd be sick. Speaker 1: I'm curious, you know, you talked a lot about obviously what the tool can do. What are some of the action items to take from once you have access to this data? Who are the right parties to get involved? I love the example of like, you know, send this everywhere, get everyone involved. It's almost like the KPI you all get around, right? It's a KPI where everyone can kind of come together, whereas a lot of other KPIs kind of sit in their silos and usually is controlled by maybe only one or two levers. This is one where like, hey, everyone can have a piece in this, right? Whether it's customer service, maybe it's, you know, shipping and fulfillment and marketing and retention. So I'm more curious on for the people who are able to increase their, let's say their LTV on a Certain product, right? Where do you go from understanding what your LTV can be, right? And I think like part of this is like, you know, we use the word baseline. I think sometimes a bit too loosely because and I'm talking more internally because like I personally feel like and I'm going through this even with like our creative team on the Chew on This side is like, hey, You know, our baseline is just what we're surrounded by right now, and we think that's the baseline. But your baseline, really, you don't really know what your baseline is until you fully understand your potential. And then you can kind of subjectively say, hey, well, like, this is what I believe is my baseline, right? Versus like, just looking at where you're at and saying, hey, this could be baseline. So I'm curious, like, I think LTV is a great metric from being able to take something and say, hey, I'm going to grow this and I'm going to have a lot of directional effort with it. But in terms of how much you can extend an LTV or how to think about it from a longer tail purpose, is there certain theories, certain things you've been able to learn from brands or learn from the tool that you could maybe share on how to think about that? Speaker 2: Yeah, I think baselines are so dangerous because it's like, is this our actual baseline or our apathetic baseline? Like no one's, you know, it's, hey, is this our baseline working 40 hours a week on this? Or is this our baseline, like, no one's working on it or everybody goes home and this is what our retention is for LTV, right? And obviously you guys are focusing on it. So I think that as far as setting the baseline, like I think one thing that I see brands who are successful at increasing LTV in a thoughtful way, right? Like not that era where everyone would just spend to acquire customers purely based on LTV and not really think about anything else, is where they're just honest internally around, hey, look, is this our actual baseline or is this our apathetic baseline? That's sort of what comes to mind there. And then I think the other one is when Merchants start thinking about this in terms of profitability as well, right? Speaker 1: Yeah, I think that'd be a really good segue into the profitability piece. I think one element here is when you look at some of these, the way brands are looking at LTV, How does the tie-in to profitability and strategies around that come about, right? And do you have certain maybe call-outs on what you're seeing brands doing that is actually really interesting or certain tactics that have been really interesting from saying, hey, I understand my LTV. I understand where profit needs to be. Here are some of the things we can be doing. Obviously, you know, you see the typical ones of like, let's raise prices and maybe let's also optimize costs on the other end. Let's also look at, you know, how we can get creative on some of those elements. But are there other tactics that you could potentially share that you've seen people be able to extend LTV, but also be able to really help the bottom line? Speaker 2: With the bottom line, right, like let's look at profitability. There's two things that affect us in commerce. There's OPEX and there's COGS, right? It's so much easier to drive down OPEX than it is to drive down COGS. Oh, I think actually, so the example you guys mentioned at the top is great, you know, like going back through, hey, are people actually purchasing these flavors? If not, we should cut the SKUs. So I think just some, what I see the best brands doing is just sort of having this really honest focus on Driving down, you know, focusing on OPEX. Hey, we started doing this three months ago. Are we anywhere near what we expected? This new content, are we anywhere near or are we now just in this inertia phase, right? Organizations inherently want to get better. There's always this drive towards incremental. Incrementalism. I was chatting with Tyson Drake last week about traction, the founders operating manual. I think what it talks about in the context of this is it just talks about like one of the things it talks about is making sure you focus on big actual bets that are actually going to move the needle. If you almost think about it as a matrix, right, like Something with high effort and high expected return is a good amount of time. Something with low effort and really incremental return is just a dangerous place to be. Speaker 1: Fair call. Speaker 3: Yeah, I have an example there, which was there's a channel that we wanted to get into, right? YouTube ads, mid-roll ad reads, just because we're trying to get this like top of funnel audience, right? You know, meta is not really driving, you know, brand awareness for us as much as it is just retargeting, right? For the most part. And sometimes like the minimum budgets for some of these things are massive, right? And so for us where we're still trying to figure out, well, what channels are working for us? We've tested channels that never worked, you know, trying to expand and try to actually get this sorted. We're going after this brand awareness where this budget we know is not going to have a direct ROI, right? It's supposed to be top of funnel. It's supposed to be, you know, just sending eyeballs to the brand. Can we hope that this big The bet that we have actually lifts everything else around us, right? Amazon, our retail efforts, our DTC. And I remember having a conversation with you and it's like, well, it's a lot. It sounds like a lot. On paper, it's a lot. We might have some guarantees here and there, but like, what do you think? I think the first thing you said is like, it's a big bet we just have to take and you'll end up seeing if it works or not. And if it doesn't, then we'll figure it out, right? Versus me going and like, all right, let me just go and try and spend maybe 5k here, 10k here on like TV or, you know, Snapchat or Pinterest, like that's not going to move the needle, right? So I'm fully, fully with you on that one. It's like, take the big bets here. Speaker 2: Said differently, like what we're seeing, what I'm seeing the best founders do at the moment is we do actually sometimes get a little bit all caught up in the Twitter news feed, right? Like here's, it's Applovin. No, it's not Applovin. Now we're doing this. Now we're not doing this. It's incrementality. No, incrementality is not cool anymore. Like it's first party. It's zero party data. It's what I'm actually seeing the best Brands doing the best founders in the game doing is looking a lot further back than the timeline. I've seen people. So I was chatting to Isaac from Mini Katana. Last week or the week before Mini Katana and Kampai Foods, you know, he's in the middle of reading Steve Jobs, Walter Isaacson's book on Steve Jobs. It's an amazing book. Some of the things that stand out to me is in the 80s when they first released the MacBook is they had this crazy Super Bowl ad and the Super Bowl ad was this sort of dystopian future and it ended up being featured on every news network in the U.S. like at the time, every local news channel in the U.S. This guy went viral in the 80s. You know, we can get through Apple oven or not or whatever the next thing is. So I think just actually raising standards so much higher I think that is something like I'm seeing founders read a lot of books, look back a lot further. I think if we look at the amount of time that it looks like people are spending on all the tactics that are going on viral on Twitter, it seems really high. If we look at what people are actually doing in reality, it's a lot more bigger and ambitious than the latest trendy thing to have an opinion on. Speaker 1: I agree. Speaker 3: I'm curious on what you've seen maybe some customers or clients have done especially after getting visibility into more into their numbers, right? I'll give you an example where before I think our like main metric for like judging success on just a marketing The standpoint was MER, right? How much did we spend? How much revenue came in for the day? And so until we actually had to dive into the numbers, it was like probably post iOS update and understanding, well, what is our new customer acquisition cost? What is our new customer MER? And what is our contribution margin on these new customers? That is when we started to understand how the business was functioning and what levers to actually pull to increase these different numbers, right? And I think it allowed us to realize that, hey, we're spending money, but we're just spending money on existing customers. That's why it's driving a lot of returning revenue. But what happens when we drive up that audience and we're not driving enough new customers, that's when things start to break, right? And I think that's when we I only realized after the fact, it's like, hey, well, we're actually losing money on new customers and we're not acquiring enough of them. We need to fix these two things. And once we fix those things, we were able to drive way more growth, right? So that's just something that we saw at Avi. But I'm very curious if you have any, you know, stories from from current clients and customers. Speaker 2: Interstate, this is actually a brand in Australia. They have the same challenge that every single brand has is that they've got the hero skew, right? So 70% of the revenue comes from this hero skew, a collagen product. And what they were looking into is they were trying to figure out, hey, are we better off going down? Are we helping ourselves or hurting ourselves with having the multiple skews? Obviously having multiple SKUs increases their conversion rate, increases their AOV. It was great. But what they actually, the way they were able to successfully get more profitable on having the additional complexity of the multiple SKUs is when they started optimizing their purchase flow way more and their upsells specifically around the source, like how these customers were coming to them, were they first time customers, were they returning customers, right? Is it what looks like a net new customer from Facebook? Like, let's make sure the landing page is based on the Facebook ad. Let's make sure the cart upsells is based on where they're coming to us. versus say somebody coming to us from a Clavio email, how do we then, you know, if it's a returning customer, it's like the upsell in the cart has to be a subscription. The post purchase upsell has to be a subscription. If somebody, let's say the person was one of the collagen brand, they bought the 70% HeroSKU, great. They're returning and they're checking out for an additional SKU that's not the hero product that we know is a consumable collagen product that they bought before. It's like, we want that to be the post-purchase upsell, even including, you know, some extra. Yeah. So that's like, that's an example of where I've seen that kind of frame shift that helps them reconsider the way they were approaching their SKUs that led this brand to have way more profitability. Speaker 1: What do you say to the brands that are choosing to front load a lot of their LTV through their offer that they have out there, whether it's through a bundle or some brands also sell 6-month, 12-month supply up front? Do you look at that and say well you're solving for the future up front and you know that that's that's one way to look at it or are there tactics you've seen in cases like that where you can still find ways to extend even a customer that you feel like may have already spent all the money they're gonna spend with you? Speaker 2: Oh yeah. Yeah, so I like it. I think the brands, as long as the brands are still focused on... The downside in selling six months up front or a year up front would be as if you just... Sacrifice the lifetime profit contribution margin of that customer, right? So I think True Classic are really great at this is the way they think about LTV is the total dollars contribution profit dollars per customer. So if you're say selling six months upfront, but your turn, you know, the contribution dollars for that order is basically the same as if they'd purchased twice or once that would be a terrible That would be a terrible tactic. But I think in general selling merchants six months up front is way better. And then being oversupplied that way is actually can often be better for the brand than the The customer canceling when they already have, they're already three months oversupplied, right? Like they're already, that's sort of like they lament the customer that's three months oversupplied that's been meaning to cancel that hasn't got around to it for three months sort of cancels with a little bit of frustration versus somebody opting in for the six month oversupply. So I think it really comes down to what is the contribution dollars expected for that customer? And are we doing too much of a trade off there? And then I think the only thing I'd say is the only thing that the second thing I'd say there is even speaking to a brand in LA last week, like That whole idea that there's this actual, there's a point of diminishing return in terms of effort for extracting more dollars from a customer. But I think for a mature brand with multiple SKUs, with a roadmap, this whole idea that there's this like, end zone of dollars extractable from a customer is not, it's not perpetually true. It might be true for this quarter, but there's new SKUs, there's new product line, like I think, still focusing on those retentions, even when you're selling, say, six months up front. There's a new holiday around the corner. Yeah. Speaker 1: What are some like, Common mistakes that maybe don't feel common to the naked eye that you see brand founders kind of constantly do and you're kind of like on the back end and you're like oh man not again or you know like it seems to be happening more often than not. Are there certain things that are like watch out for this trap or if you're going down this journey maybe just keep a closer eyes. Are there certain things that you're seeing from a tactical point of view that brands are doing? Speaker 2: From a tactical point of view, I think the one I'm always the most shocked by is when there's no post-purchase upsell. When they're in 2025, these people will have retention people and external people designing emails and all of these kind of things. I think that anybody in 2025 without a Card upsell or a post-purchase upsell or maybe, you know, we can see brands make arguments that, hey, look, we actually worry about the card upsell, like affecting our conversion rate. We don't need somebody going from the cart where they're about to check out back to a product description page, you know, like I can see that argument, but I think anybody, anybody that is not doing post-purchase upsell, I think is like, and not thinking about how they can use that, that is their like last That's your greatest opportunity to drive LTV. I think it's not so much about maximizing. It's always been great at maximizing the average order value for that transaction. But I also think it's our biggest opportunity to drive LTV if somebody's checking out, say, without a hero SKU or without, you know, without the subscription. Speaker 3: We talked a little bit about LTV. We talked a little bit about profit visibility and what founders really should be doing, right? Especially during this time where there's some uncertainty, right? And so, would love a final takeaway from you. What is that one thing you want the audience to kind of take back and implement in their business starting today? Something to chew on. Speaker 2: Something to chew on, I would look at everything everybody is working on and cut as minimum the bottom 20% that you have like the least certainty about. Like I would cut Anything that's been going for more than three months, I would just like have it all put into an Excel sheet and probably my actual recommendation would be to delete the bottom 80% of things, but I think even start with 20% and I think pick fewer. You know, if you're ending a meeting and it's like, cool, and this is our first P0, and then our second P0 is this, and then this is also a P0, you probably, that's what I see people making the biggest mistakes with is that what they're saying their priorities aren't actually their priorities or what people are spending time on. They're not stepping out. I see people making mistakes that if they overheard that in a bar, hey, this brand, hey, our growth person, our revenue is flat, but my growth guy is really good. He's been with us for nine quarters. It's like, that can't be true. That sentence, it's impossible. It's like, what are you talking about? Or it's like, oh, yeah, so I think I actually think that's the, I know that's not, yeah, so how do you tactically implement that, right? Is like, look at where everybody is spending their time. These businesses aren't overly sophisticated, right? It's not like we have thousands of people working in our brands and it's unclear. It's like, there's only so many things we can do. There's a certain, there's a certain number of things we have to do, right? We have to provide customer support. We have to manage supply chain. We have to make sure Facebook stays on and stays profitable. We have to prepare for the holidays. We have to tend to the garden, but even what you mentioned at the start about people clearing out SKUs, not everybody's doing that. And then actually, how long does that, that probably, you guys can probably do it on Eat & Steak. And I imagine that's like a single digit hour activity for you, right? Speaker 1: Absolutely. Speaker 2: Is that fair to say? It's not hard. I think more people need to be doing single digit hour activities, cutting stuff out. And again, I obviously, Personally, I'm a big believer in LTV and its ability to drive profits, but everybody... Repetition, I think is really good. It's like, hey, we're going to meet up in this meeting and we're going to talk about LTV every day and we're not going to, you know, everybody's got to stop using their sort of like day job as their excuses is what I advocate for. Unknown Speaker: Chew on that. 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