Vital Proteins uses Brightback to double save rate for most valuable customers
The Problem Solver: Vital Proteins, America’s Best Selling Collagen Brand
Vital Proteins is America’s best selling collagen brand. Recently acquired by Nestle Health Sciences, Vital strives to empower everyone to live a full, vibrant life through whole-food based nutrition. Vital’s eCommerce website is built around a differentiated subscription program for it’s most loyal customers.
The Challenge: A changing business climate due to COVID-19 creates headwinds
Like many eCommerce businesses, vitalproteins.com saw incredible growth in it’s subscription offerings in 2020. The primary impact of COVID-19 on the business was a refocusing on digital channels for growth, including the direct-to consumer channel. This impact reached its zenith with the launch of Jennifer Aniston focused advertising campaigns at the end of 2020. By the end of the year, the website had reached records in subscription revenue and customers. This trend continued through Q1, a historical high water for wellness businesses due to new years resolutions.
At the end of Q1 2021, Vital had several blockers to continue growth in the eCommerce business. Consumer vaccinations were ramping up and businesses were reopening, which was driving customers back into stores and away from the convenience-boost of subscriptions.
In addition, supply chain costs had increased, which necessitated a price increase and catalog consolidation of Vital’s main products to maintain margins. These increases would directly impact subscription customers. All of this coincided with an end to the one-time shot in the arm of announcing a major celebrity campaign (Jennifer Aniston). Retention of existing subscribers suddenly became the biggest priority to continue to grow. At this point, the Vital team turned to Brightback to navigate these changes.
The Solution: Cancel flow wins by challenging industry orthodoxy
Vital came to Brightback looking for novel test ideas to improve their churn.
The technology stack at Vital was similar to many eCommerce companies - Shopify for eCommerce, Recharge for Subscription billing, and Heap with Looker for BI/Analytics. Brightback was able to be integrated via webhooks in a single two-week sprint.
“Brightback allowed us to quickly test and improve a neglected part of our flow. No other tool allows for quick testing of 5 different offers to all groups of customers, and targeting of those offers to specific groups for optimization”
-- Emily Keyser, Vital Proteins
To have a clear business impact after integration, we had to challenge a commonly accepted methodology - the cancel flow survey.
The prevailing wisdom for saving subscription customers is to utilize cancellation survey results to target offers (ie: a customer who says that they have too much product is given an offer to skip or swap). Underlying this advice is a big assumption - that the reason selected for cancellation is an accurate signal of the optimal offer to save the customer.
Vital Proteins wanted to test that assumption. The test setup was designed to determine whether presenting offers to customers independent of reason click increased the likelihood of a user to deflect. Multiple pages in Brightback were created for multivariate testing:
- A control page which assigned offers based on reason code
- Specific Pages for each offer ($5 off, $10 off, 10% discount, 25% discount)
The outcome presented a clear statistical winner - fully optimized, discount offers resulted in a doubling of save rate vs a control flow with offers targeted at cancellation reasons. The lesson was readily apparent - targeting offers based on customer profile was a stair-step improvement over survey targeting.
The Result: 2x Increase in Save Rate/Deflection Rate for the best customers
Vital’s subscription program is a true loyalty play. Many customers have been subscribers for years. And the most valuable customers were the subscribers, with subscribers having 2-3x the Lifetime value of 1-time purchasers.
When it was clear that, due to supply chain issues and increasing cost of goods, Vital had to increase cost, the team also predicted a corresponding increase in churn and loss of valuable customers to lower-cost competition. But they were also concerned about abuse - they didn’t want to give high-value discounts to any subscriber trying to cancel, as this could give perverse incentives
To combat this, Vital used Brightback to specifically reward loyal customers in their broader subscriber mix during these evolving times. By identifying users that were higher value and grouping them into a High LTV audience, Vital was more likely to retain truly profitable subscribers vs just customers abusing the discount.
Any customer who had been a subscriber for more than 6 months was given a higher discount offer. As a result - Vital doubled the save rate for those customers and kept them on the program.
“Brightback gave us the targeting ability to create more valuable offers for our best customers, something that would have taken months to develop with our in-house engineering team”
Emily Keyser, Vital Proteins
Moving Forward with Brightback ML and Automated Testing
Vital’s business is continuing to move forward with an ever-evolving customer mix. As a way to respond to these changes and minimize maintenance, the decision has been made to deploy Brightback’s machine learning and automated testing solutions to further optimize churn rate. This decision truly puts retention on “autopilot” for Vital and ensures they are intelligently responding to changing market conditions.
