We all know A/B testing promotional offers is critical for acquiring new customers in general, but what most brands don’t realize is that it’s just as critical for subscriber retention, too. We’ve seen it pay massive dividends for our brands on Stay.
Health & wellness brand Obvi is an awesome example of this strategy in action, and we were lucky enough to grab some time with their Co-Founder/CMO Ashvin Melwani to get some first-hand insight into their testing journey. Spoiler alert: they used promotion testing to increase their conversion rate by 85%!
Let’s dive into the interview.
Q: Thanks for the time today, Ash! Let’s jump right in. What are some of the most effective ways you’ve acquired new subscribers?
Ash: What we’ve done really well is showcasing the benefits of being on subscription: always 30% off, always free shipping, free cancellations, and free gifts. We’re also currently sourcing some more premium free gifts, and I think once we have that, giving a free gift at subscription will help increase the opt-ins a lot.
Q: What tactics are you using to reduce subscriber churn?
Ash: It’s been almost surprising how much offering a free gift or otherwise incentivizing someone to stay has been so effective. Offering free gifts where our biggest churn period was, from order one to two, helped us close that gap by like 85%.
“It was crucial getting customers past the second order to help us reduce churn risk and increase lifetime value. The ability to A/B test gifts and upsells throughout the subscriber journey allowed us to accomplish just that.”
— Ash Melwani, Co-Founder & CMO, Obvi
Q: How do you determine what isn’t working for customers who do churn?
Ash: That’s with the cancellation surveys — and we discovered our top three biggest reasons for churning were 1) I can’t afford it, 2) I have too much, and 3) I don’t like it.
Q: What do you do to address customers’ price objections?
Ash: Price-wise, there’s a delicate balance between being able to offer a little bit more of a discount, because it has to financially make sense — and you don’t want to devalue the brand too much. The juice has to be worth the squeeze.
Q: Can we dig in deeper? How you decide whether or not to discount?
Ash: I think discounting is fine, but if you’re constantly seeing a 20%-25% discount, no one’s going to buy at just 15% off. You have to be careful with that. I’d rather do free gifts or some other value add. Plus, there comes a time when you also have to back up and say, ‘Is there enough value in this product to justify the price?’ and ‘Is the product attracting the right audience?’
Q: For customers who say they have too much product; what do you do to keep them?
Ash: You have to ask, ‘Is this a brand issue?’ Essentially, if you should be taking a product every day, why aren’t you? From there are you attracting the right consumer? And are we communicating the benefits well enough?
Q: And finally, for people who aren’t digging the product… what do you do there?
Ash: That’s not something you can address right away — but it is something you can deal with over time as a brand. That said, giving customers the option to swap flavors does give them the opportunity to, if they don’t like one flavor, try another one they might like better.
Q: Final question… Can you talk a bit about the importance of the subscriber experience?
Ash: When switching over from our previous provider to Stay, the biggest thing we realized was how important the customer experience really is. It affected so many other things. A better customer portal means less customer service inquiries, which means more time for quality answers for more pressing issues. So customer service in general has improved. Second, churn drastically reduces when customers can come in and find what they need on their own. And the final piece is personalization by customer segments — that’ll be our next big focus.
Ashvin Melwani is Co-Founder and CMO of Obvi, one of the world’s fastest growing health and nutrition brands. Since launching in 2019, Obvi has surpassed 250K customers globally, all while bootstrapping its way to $40 Million in sales in just 40 months.