Throwing money at customer acquisition had its time and place, but now that costs are sky-high, a lot of brands are rethinking their marketing mix across the customer journey.
Aura Bora is one example. They’re challenging the conventional wisdom around full-funnel marketing and shifting their focus to retention strategy. Why? Because they know who their most valuable customers are… and they don’t come in from Facebook or Google ads.
We sat down with Aura Bora’s VP of Growth, Cameron Faist, to learn more about their subscription strategy. Let’s dig in.
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Q: Thanks for spending some time with us, Cam! Can you start by talking a little bit about Aura Bora’s current subscription and retention goals?
Cameron: Sure. In Q4 of 2022, we drastically reduced our top-of-funnel marketing spend to hyper-focus our resources on retention and carve out a path to profitability for the DTC channel.
So we’ve redefined what DTC means to Aura Bora. Previously, it was a new user acquisition marketing machine that happened to make money. Now, we’re looking to the DTC channel to be the innovation machine that drives what we bring into retail.
Q: How did you make the decision to commit to that?
Cameron: After looking at 18 months of DTC data, we saw that the person going from first to second purchase was 5x more valuable than a person making one purchase.
Additionally, the original growth driver of Aura Bora has always been organic word of mouth. As we have consumers buying into the new flavors and what Aura Bora represents, they’re organically coming to subscription.
Q: A big part of Aura Bora’s strategy is dropping new flavors all the time. How does that impact your subscription strategy?
Cameron: We leaned heavily into the FOMO and scarcity that drives our successful new flavor launches and created the ultimate retention product, a monthly new flavor subscription. We launched the Flavor of the Month Subscription in June and our July cohort had a 100% retention rate.
Q: And how does that Flavor of the Month sub play into DTC as an innovation channel?
Cameron: When we launch a new flavor, we’re looking at a meticulous approach to our methodology to provide insights into consumer trends.
By setting things up this way, we have certain milestones that give us early indications of a flavors initial success to inform future drops, supply chain, and powerful consumer insights for our retail partners.
The long term vision is to take these consumer insights to our retail partners to mitigate risk of commercializing a new flavor while continuing to push the limits of flavor innovation for the category.
Q: So, considering that you’re focused primarily on retention, what are the most important subscription metrics that you look at?
Cameron: First of all, some of the metrics you’d expect: average order value and lifetime value. The other two big ones I’d share on a subscription slide for a board level meeting are:
– Six-Month Retention: If you stick with us for six months, we’re doing something right.
– Same-Day Cancellation: In the past we saw a lot of consumers placing that first order, getting the discount, and canceling before it even arrives. We changed the way we marketed subscriptions in our post purchase flows and put together an entire campaign to effectively push that down to zero.
Q: Let’s close with a tech stack question: What do you think operators need to look for in a subscription platform?
Cameron: When I share our wins with Stay to other brands, it’s super simple: it’s a marketing channel, not an automation channel.
The customer portal has a really clean UX for customers to be able to do the basic functions of subscription management. On our Gorgias platform, customer support tickets are down significantly. We see a lot less clunkiness from the customer really interacting with the portal. Prior to Stay, about 50% of CX tickets were related to subscription management. We get maybe one or two a month now.
With a small but mighty DTC team, I also looked at the UX of the merchant portal and its ease of use setting up campaigns. Launching a new flavor every month means frequently adding new SKUs to the portal and creating a subscription plan. Launching a new flavor every month means frequently adding new SKUs to the portal and creating a subscription plan.
Cameron Faist, VP of Growth at Aura Bora, has been in the better-for-you CPG space for 15 years helping to launch or grow the DTC channel for businesses like Arctic Zero, Curology, GoMacro, and Colson Health. He joined Aura Bora as the Director of eCommerce in 2021 and has most recently stepped into an omni-channel marketing role as VP of Growth overseeing acquisition and retention across digital and retail channels.