Subscription Growth and Unit Economics with Jordan Menard

Introduction to Scaling CPG Subscription Brands

0:00If you have a CPG subscription brand with healthy unit economics and you are a good marketer, you can go from zero to 100 million in [music] less than 3 years. I want you to learn how to think about growth differently. So when you go back into your business, [music] you could build engines that actually scale. Ads are not branding. [music] Brand starts when they buy your product and the customer experience that happens right after that. Retention is creating a brand experience [music] with your customer and communicating with them in the right way to keep them on the subscription or [music] enhance their lifetime value. In order for you to lock crazy growth, you have to divorce [music] in your brain that the first purchase is going to be super profitable. It's not going to happen.

0:45What you should be thinking of is how do I lose the most on first purchase?

Meet Jordan Menard and Instant Hydration

0:55What is up, commerce people? my name is Jordan Manard. for those of you that don't know me, I'm the co-founder of Instant Hydration. Instant Hydration is one of the fastest growing DTOC brands ever. Feels crazy to say that. but if you look at the numbers, it's true. we are spending right now multiple six figures per day on Facebook ads. And when I tell people that, they're surprised and they don't realize that this is the fourth time I've done this where I took a CPG brand who had product market fit, healthy unit economics, and turned it from an 8 figureure brand into a nine figure brand. This is just the first time I actually own the Shopify store.

1:45If any of you have ever seen me talk before, you probably heard me talk about media buying and creative. I've been talking at Nick's events for years and I always talk about similar things, right? Except today. Today we're going to talk about something that I've never talked about publicly and that is how to not just make a good ad or not just run a good campaign, but how to build real growth engines for subscription brands that can scale.

2:24Believe it or not, if you have a CPG subscription brand with Healthy Unity Economics and you are a good marketer, you can go from zero to 100 million in less than 3 years.

The Power of Facebook Ads

2:38My venture into this world came with Rise Superfoods. How many people know Rise Superfoods? When we took over Rise and started running their growth, they were doing about a million a month on Shopify. Eight months later, they were doing 14 million a month on Shopify. 14 million. How did we do it? We ran Facebook ads. Literally, we scaled Facebook ads. We took their ad account from 15K a day to 150K a day. What I'm going to talk about today is going to be foreign unless you know this ecosystem.

3:22And if you're thinking, well, I don't have a subscription brand. How does this apply to me? What I want to teach you today is not a tactic or a trick or a hack, but a way to think. I want you to learn how to think about growth differently. So when you go back into your business, you could build engines that actually scale. and we're going to talk about concepts in this talk that I've never heard anyone talk about.

Understanding Alien Physics in Marketing

3:51Part one is called alien physics. The reason I call it alien physics is because you're going to encounter some numbers that seem alien to you. It seems foreign. Here's the first one. Who believes that that is a good rorowaz.11? Any show of hands? Who would accept this in their business? You would accept a 0.11. >> That's right. This is my goal. I want to get to this point to where I can accept a 0.11. I want to get to the point to where I can pay a really high CAC. In fact, I want my CAC to be high. What? I want to accept a low rorowaz. Why? Because the platforms are auctions.

4:46You are competing against other people in those auctions. If you can afford to pay a higher CAC, if you can afford to take a 0.11, you have won the game. It doesn't matter if you're bidding manually, it doesn't matter what you're create, you will win the game if you can figure out these unit economics. So, how do we figure it out?

The Flywheel Framework for Business Growth

5:10It all starts with the flywheel. This is the entire framework for any business that is really capable of scale. I'm talking going from 10K a day on Facebook ads to 50K a day in 60 days. That type of scale. It's only possible if you have this flywheel. It starts with acquisition. Acquisition is acquiring a customer. For a CPG brand, the next step is so important and that is onboarding, locking in the habit, locking in the use of your product. It doesn't matter how good your emails are. It doesn't matter how good your SMS is. Nothing is going to get someone to stay on a subscription that sucks.

6:00No one will. And when your customer in any brand buys something from you, you have a very special moment coming up and that is when they get your product in the mail. That moment, if you've bought something from an ad recently, I would bet money you don't remember what ad it was. I would bet money that ad has no place in your brain. Even though you might like the product, you don't remember what ad brought you there. Ads are not branding.

6:35Brand starts when they buy your product and the customer experience that happens right after that. And when they open your product, when it shows up in the mail, that's the moment where you have to communicate to them with whatever message you want. And that's where I talk about onboarding. At Instant Hydration, when you sign up for the subscription, we immediately start telling you how to use it. One of the perks of the subscription is a free vitamin D and K bottle. The reason is if you are deficient in those vitamins, you can't absorb electrolytes as well. That free gift is only given to subscribers. Now, why do we do that? Is it just a free gift? No, it's to help them learn about what our product does.

7:2460 to 80% of America is deficient in potassium and magnesium. We're talking hundreds of millions of Americans. Most of them have no idea. Most of them have no idea. Onboarding is part of finding the reason that someone bought your product and communicating with them in a way that earns them as a customer long term.

Retention and Customer Experience

7:50Then retention. Like I said earlier, retention is not just sending a text. It's not just sending an email. Retention is creating a brand experience with your customer and communicating with them in the right way to keep them on the subscription or enhance their lifetime value. If you are in this business, the number one goal that you should have, it has nothing to do with CAC. It's high LTV. And we'll talk about that in a second.

The Importance of Advocacy and Free Scale

8:21Finally, advocacy. Scale for free. Find people that love your brand. Find people like I I just talked to one of my customers the other day. It started off because I have a video in our cancel portal that says, "Hey, I just want to know why you canceled. And if you want, we'll hook you up with a free gift, free discount. not trying to change your mind. Just honestly want to know." One of my customers reached out to me. Hey, I actually love your products, but I ordered it like 10 days ago. Where is it? Turns out she had a mistake in fulfillment. We had a problem with her package.

9:00She was so cool in a moment where I was expecting her to Karen and I wanted to just hook her up for being a cool customer. So, we sent her a bottle and a variety pack for free. She then hit me back just a few days ago, hey, my kids love it and we do a fishing tournament in our community with about 500 kids. We would love to get you guys involved. That is advocacy. That is scale for free. I'm going to send them product and I will get scale for free.

9:36And you do that by doing things that are not scalable, like helping customers one-on-one.

Challenges with Traditional Marketing Strategies

9:42Here's what doesn't scale. And if this looks like your marketing plan right now, be honest, oneoff hero creative that works for two weeks. It's amazing. It explodes and then it dies. And then you are back chasing it yet again. Trying to get that creative that will pump. Nothing else works. It goes and then it dies. I won't ask any of you to raise hands if you've experienced this because I know if you paid money to be here, you've experienced this. This is running ads chasing 3 to 4x first purchase rorowaz. I don't even see a one nowadays. I don't even want a one. I want to figure out how do I make 0.1 work. Why? Because that's going to unlock growth. And if you can think like this, you will unlock growth in your business.

10:34Acquisition without retention infrastructure. If I pump a bunch of customers into my subscription base and it's a leaky bucket, I'm losing on first purchase. Do you understand how quick my cash will evaporate? How fast my working capital will disappear? And then finally, hoping Meta's algorithm saves you. If you hope this, it is going to crush you. Let me make it very clear. The reason why it's getting more expensive to run ads every single year is because Zuckerberg Zuckerberg I said Zuckerberg Zuckerberg took a playbook out of Jeff Bezos.

11:15He took your margin is my opportunity. Meta knows all of your businesses. It knows your entire category. And if your plan is that Meta Algo is just going to blow your business up, you are the ones that are getting crushed so people like me can buy inventory.

Mastering Math Discipline and Creative Velocity

11:35Here's what does scale math discipline. Every dollar tracked from CAC to net margin LTV. If you can figure out this number, net margin lifetime value of your customer within one year, friends, you have unlocked something powerful. This is on average how much your customer is going to give you in free cash flow in one year. If you become disciplined on your paybacks, and we'll talk about how to do this, you will that will be the first step to building your growth engine creative velocity. You have to test a ton of creative. If we if one out of three ads spends more than $5,000, then that's we're we're crushing, right?

12:20Because one ad is going to spend $2 million, right? I have to test a hundred ads to find that one that's going to go. And as I'm testing, all the other ads comprise the ecosystem to create stability as we scale. Retention architecture like we talked about onboarding habit. Once they have the habit, connect them with other people who have the habit. Once they connect with other people they have that have the habit, then they become advocates.

12:47And that's such an important part of the life cycle. Finally, cash management, payback periods that fund next month's growth. If you can figure out this dynamic, if you can figure out scaling knowing you're going to lose a little bit on the front end, but it's going to pay back the next month on a 60-day payback, watch what happens to your business. And we'll talk about how to measure it in a second. Part two. Now that you know the physics of a environment that is foreign to you is monkey make fire. If you want to

Monkey Make Fire: Achieving Self-Sustaining Growth

13:23learn how to travel at warp speed through Meta's algorithm, you first have to figure out how to get the fire self- sustaining in your own business. This is the goal. When when strategics want to evaluate my company, Instant Hydration, they're going to look at pretty much this. They're going to look at LTV to CAC, lifetime margin, LTV to CAC. These are not our real numbers, but they're pretty close. Most of you see that 0.56 rorowaz, mind you, that does not include COGS, and think that if you accepted that, you'd be bleeding out.

14:07For us, we lose about $28 on the first order. $28. It's a lot, but it pay it pays back in 60 days. In 60 days, I break even. In 90 days, I get my first contribution margin. What that means is if you know your LTV for one year net margin and you use this equation at the bottom to find it, you can start to figure out what your payback periods are. If you can start to figure out what your payback periods are, you can unlock serious growth.

14:41Here's how it looks. Month zero revenue $45, contribution at 24. With the CAC, we lose 55 per sale. These are again not my real numbers. This is an example of what it could look like if you ran at a 0.5 and did not have a leaky bucket at scale. Month zero is going to burn a lot of cash. You're going to drop a lot of cash on month zero. So, you have to be smart when you're scaling. You have to remember how much cash can I afford to drop here knowing it's not going to pay back fully till 90 days.

15:17First rebuild, we get $30 in contribution and our cumulative P&L goes to minus 255. We're almost there. Month two, which is the 90-day point, $181. When Rise Superfoods scaled from, you know, 10K a day on on Meta to 150K a day, who wants to guess the rorowaz that they scaled with? 0.3. 0.3. That was a big part of it. And we'll talk in a second about how to make that all work. But in order for you to lock crazy growth, you have to divorce in your brain that the first purchase is going to be super profitable. It's not going to happen. It's not going to happen. What you should be thinking of is how do I lose the most on first purchase? How do I how can I afford to lose the most? Now, that requires you to know these things. They pay back, I promise. But you have to do your homework. If you use Shopify, you can create a c a customer cohort report in analytics. It's very easy. That will tell you the average spent per customer

16:26by month. You just go to analytics. Most of the time, Shopify has prepopulated this report and you can toggle the different metrics that you want to look at. The one that I'm referring to here is amount spent per customer. You want to figure out each month on average, how often does a customer pay you and how much. Once you have that number, you can then start to figure out, okay, well, if I war game out tax scenarios, like I thought for sure that I needed to have a 1.2, but turns out if I go to 7, it pays back in 90 days because I get so many subscribers.

17:08So then it becomes a question of if this is true, I only have to float the CAC for two months. After that, this $23, this is the most contribution margin that can happen in your business is when a subscription rebuilds. When someone buys something from you without an email, without a text, without an ad, they didn't even go to your website. The single most amount of contribution margin that is delivered to your business happens right there.

17:40And the name of the game is how do I float my cash to get right here to get right here. And if you're low on cash, move it up 60 days and start to figure out that number. As you can see here, by month 12, we have $168 in one year from a 0.5 rorowass.

Unlocking Unreal Levels of Growth

18:04If you can unlock this model, if you can build this engine in your business, it is going to unlock unreal levels of growth. You can just send the budget. The unity economic math. If CAC is 80 and you have a 60-day target for full payback of CAC, you can use these numbers to start to figure out what your CAC should be. And what Rise did, what everyday dose did and does is they want to pay back their CAC in 90 days. as you get bigger, let's say in Athletic Greens, Athletic Greens doesn't pay back their CAC for the first year, one whole year.

18:53But to them, it doesn't matter because their ecosystem pumps out cash. If they get you on the subscription over three years, that one-year break even is going to be a 3 to one return. Make no mistake about it. This is who you are competing with.

The Reality of Natural CAC

19:14This is why the ad prices are what they are because instead of trying to fight for a low CAC, I will look to see what Meta gives me in order for me to buy infinite customers. And that's a real number. It's called or I call it natural CAC. You've all experienced this, man. It seems like no matter what I do, I run ads and I get this rorowaz. Seems like no matter what I do, Meta just wants to give me this rorowaz. You know what? You're right. You are right.

19:51Meta knows your entire business. Not just your business, your entire category, everyone else's business. There is a market rate for your business to acquire a customer dictated by the category you are in. Now there are other things that affect that like your relevance score, your quality score, your website, your ads, everything else. But there is a number that once you find and you start running ads at the amount of customers you can get is limitless. Limitless. You can get as many as you want.

20:32The question about buying ads is not about how do I get a low CPA? It's how do I make this CPA work and get a million customers a day. That's what natural CAC is. It's different for every business. You'll know it when you start scaling. There's going to be a return that Meta wants you to accept. My advice, accept it. Make that number work. Stop trying to get that number lower. Make that number work. Build up your flows. Build up your post-purchase.

21:08Gify repurchasing behavior. These are the things that will make that will unlock real growth in your business. This is what I mean when I say I'm not here to teach you a trick or a hack. If we're being honest, those things don't work anymore. They don't work anymore. I can't. There's nothing I you can copy and paste into your business. I'm trying to teach you how to think about it. And this number is a great entry point for anyone to start understanding what I'm saying.

21:39I would bet that if I asked all of you, you would have a good idea of what this number is in your own business. You guys probably know. Here's what happens when you accept this

Case Study: Scaling with Ryze Superfoods

21:51number. This is what happened with Rise. We were in there for a month. We had built all of our stuff. I'm looking at the numbers and I'm like, "This guy has no idea what's coming. we're going to blow this thing up. He has no idea. And I go, "All right, so what are the union economics on acquisition?" And he goes, "I want a $55 CAC." I go, "You're telling me if I can bring you 10,000 customers a day at a $55 CAC.3 rorowaz, you'd be happy?" He's like, "Bro, I'll buy you a Ferrari." I'm like, "Let's go." Never got that Ferrari. and so that's what we did. And within 90 days, we went from spending 10K a day to spending 30K a day. Within 1 year, we were spending 150K a day every single day. And guess what? The CAC went from 55 to 65.

22:43What? Think about what I just said. I took ad spend from 10K a day to almost 200 and CAC went up $10 the whole time. The reason why this number is so important is because you can count on it. It's reliable. It will give you infinite customers at scale and it's real in every single one of your businesses. What you The problem is you haven't figured out how to make it work. Don't try to get the number lower. It's a fool's errand. It's a waste of time.

23:15You're going to have to pay more next year and the year after that and the year after that. With Meta, it's like the next hour. My CPMs go up every time I blink. If you're chasing low CPAs, it's a fool's errand. Okay, so now we know the physics of this new world. Now we're thinking, okay, I know that the cohorts are going to pay back. I know the basics to make fire. How do you scale with a K?

23:44Scale with a K is a specific word. It is only reserved when you're spending $100,000 a day on Meta. That is scale

Understanding Meta's Business Model

23:52with a K. coined by Jason Applebomb. It's real. And if you're not thinking about how you should spend 100k a day on Meta, then you're not really thinking about what Meta is used for. That's what they want, guys. Do you realize? That's what they want. They want you to do that. They've set up their entire business model so you can do that. Here's how it works. This I I tried to think of a better less autistic way to say this and this is what this is the only thing I kept coming back to. I'm going to show you three different triangles. Those triangles act as fulcrums in my business that create inflection points. When you balance them and you lean into them, that is how you can unlock serious

The Growth Triangle: Media Efficiency Ratio (MER)

24:40growth. The first one, and this is for growth proper, cost to acquire a customer, media efficiency ratio, and ad spend. Media efficiency ratio is how you figure out how much money you're actually making per day. What I love about me is it's a real number. It's a real number. You actually made that and you actually spent that. If you deduct your product cost, your fulfillment, your shipping, it's the easiest way to back into contribution margin from a highle blended metric. That's what me is useful for. So yeah, I'm losing $28 per purchase on the first one. That sounds horrifying until you remember my source profitable every day. Profitable every day. How me? Even though we are losing, we have a bunch of rebuilds hitting.

25:38Those rebuilds allow us to lose a little bit more on CAC. If I lose a little bit more on CAC, my ME goes down a little bit, my ad spend goes up. That's it. That is it. This is a market. This is how this functions in the marketplace. You can toggle any one of these things. If your me is above a three, you can burn more cash. Likely depends on your COGS. For most businesses, if it's above a three, that means you can take a higher CAC. That means you can scale more. That's the first triangle.

Creative Strategies for Ad Campaigns

26:19The second triangle is on creative. I'm going to talk about this for a little bit because I really, if you guys can hear me on this, this is all you'll need. With creative, there's three main types that we run in our business. Static ads, which are images. They're great for bottom of funnel. Typically, not that good at prospecting. Some people will tell me, "Wolf, I prospect hard with my images." Like, how much are you spending a day?

26:5120K a day. Yeah, you're sc you're prospecting. No, it's middle of the funnel. Look in North Beam. Look in Triple L. You'll see the percent of new new to brand visits. They're lower. Statics are great for bottom of funnel. Whitelisting is it went from this is going to unlock serious growth to this is a mustave. It's a mustave.

The Power of Whitelisting and Influencer Marketing

27:14Whitelisting is paying for advocacy from people that your customers already listen to and follow. If you are not running whitelisting in your business, you are leaving so much money on the table. So much money on the table. I had someone look at my ad account. They looked at my creative testing campaign. Mind you, this creative testing campaign probably spends about 75K a day and it's all Every adset starts at 100 bucks a day and we scale it from there. And I have this media buyer look at it and he goes, "Bro, your frequency is crazy.

27:53It's like over five." I'm like, "Yeah, hopefully we can get it up to like six and a half, seven." He's like, "Dude, what?" Like, "Why would you want that to go higher? Don't you want your ads to prospect?" I'm like, "No, I want someone to land on my website and all of a sudden it feels like everyone that is cool is talking about it on Instagram." Guess what? That's exactly what our customers tell us. That's exactly what they say.

28:18It feels like everyone's talking about you guys. You can manufacture social buzz profitably. Your whitelisting ads are going to be your best performers in your ad account. They're going to be your best performers. The true test of a whitelisting ad is what happens after it serves to that person's following. Can it really convert on cold traffic? That is why bigger influencer does not automatically equal better. You want an influencer who's down for the cause. We have this girl, Helen.

28:48We've spent $5 million on Helen's ads. $5 million just on her ads. And the reason is she's down to play ball. That girl gets the assignment. When I when we send over the brief, she's like cooking up angles. And even though she doesn't have the biggest following, we have other influencers with four or five million. She crushes them because of her content. Because once it goes beyond her following, which really isn't that much ad spend, it's all about the content.

29:20It's all about the content. Finally,

Crafting Effective Narrative Ads

29:21narrative ads. I've, if you watch any of my other talks, I teach how to make narrative ads a hundred times. To put it simply, a narrative ad is a firsterson story in video format. I just told you about the whitelisters that we have. Some of them we pay 26 grand per video. But guess what? The top performer in our ad account right now is not one of those videos. In fact, it's a video my in-house video creator, Michael, who's here today, shout out, Michael, he made in our office on a Thursday afternoon, and we're spending like 50k a day on that video.

30:02It's it these ads crush. They tell a story. Remember, when you go onto social media, it's psychology. The human brain is wired to hear narratives. It's wired to hear stories. It's why you paid to hear a narrative today. That's exactly what those ads are. And for us, what I'm always talking about with Michael is how can we touch on the symptoms of electrolyte deficiency that people don't know they have? That people don't know they have. And it manifests in a million ways. And you hook them with the problem. draw them to the solution. And if you are making these three types of ads at scale non-stop, just this you don't need UGC, you don't need to go hire people on Billow.

30:48If you make these three types of ads, that's all you need to spend 200K a day. You just need to make a lot of them. A lot. Remember, as soon as an ad works, for me, it's always bittersweet. When we log in and I see the CPA is like, you know, the target, it's awesome cuz I know we're going to scale, bittersweet because I know it's going to die. Every ad dies, just a question of when. And so, you need to build a machine, an engine inside of your business that is pumping out creative. If you can figure out the unit economics and lose money on that first purchase and run ads at the natural cap that Meta gives you and you're pumping out content like this, that's real growth. The last one,

Retention Strategies: The Retention Triangle

31:33probably the most important, the retention triangle. Doesn't matter how good your emails are, doesn't matter how good your SMSes, the flavor and effect of your product are what will drive re repeat purchases. Bre breeze tastes good. That's not why people drink it. They drink it for the effect. They drink it because they like the way it makes them feel. Our product is like that but different. One of our customers said it the best and this is now what we're using in our marketing. I notice it the most on the days I don't take it.

32:11It makes them feel like they're supposed to. Now we're bringing that into the ads. Feel normal. Feel like your body is intended to feel. CRM plays a big role. If you have subscribers, think very carefully about emailing them. It's a turning point. Every single time you send an email, you are making them leave. Every single time. Be very selective on the emails you send them. For us with subscribers, we just send the billing stuff and then when we have a cool giveaway, something like that.

32:48But even when we have a cool giveaway, it creates churn. Your CRM can be a tool. It can also be something causing your customers to churn. Use it wisely.

Pricing and Discount Strategies

33:00Finally, price. The way that we look at price and discounts. I hear a lot of people say, "Oh, if I offer discounts, I don't want to be a discount brand." I'm like, "Bro, go to nike.com. Half the shoes are on clearance all the time." Running a sale will not make you a discount brand. Being a gimmicky brand will make you a discount brand. For subscriptions, if you have that high LTV, use discounts as a way to get them into recurring revenue models.

33:31Incentivize that behavior. If you go on Athletic Greens, if you go on Armra, you'll see there's a big discount on subscription, no discount on one-time purchase. That's what I'm saying about price. Use price to incentivize the right behavior and get people in to recurring revenue models. Last thing I'm going to say, and I'll close with this. I know that a lot of what we talked about was a little bit more abstract than the typical tactics that I usually bring. I want to encourage you use this as a framework for thinking.

34:14Your numbers won't be exactly what what I showed on screen, but I will tell you what, they're the same format. If you think like this, you can actually unlock huge growth engines in your brand that just crush that you can scale easily that you know the budgets go from when it works man they go from 10 to 20 to 30 to 40k a day so fast because you built the model and the engine right. Thank you very much.

34:51Sam. Oh no. Oh, Sam there. Stay there.

Q&A Session: Practical Insights and Advice

34:55Couple questions. First off, 34 minutes out of a 35minut slot. Not bad. Not bad. >> It's first time I haven't gone over but like 20 minutes. >> So, Jordan and I have done this a couple times throughout the year and some of the favorite things, one of the most frustrating things is like having him look at your ad account cuz you look be like, "You should spend more." And we're like, "Oh, like how many more money on the credit card?"

35:13>> So true. Put more money. He was like, "No, you have to. You have to find a way to figure it And so Zack Stuck called me a little while ago and he was like, "Hey bro, I just want to say thank you." I was like, "Hey man, for what? >> For what?" And he was like, "Do you remember that conversation we had a little while ago where I was complaining about how high my CAC was and you told me, and I quote, "All I need to do is lose some money like a man and the cohorts will pay back." I was like, "I do remember that." He's like, "Bro, it worked. We are printing. Thank you." I'm like, she's he's selling socks.

35:48>> Oh, the I know. Yeah. Yeah. Yeah. But Yeah. So, questions. It's difficult. It's it's been a mind shift. Max question right here. >> Yeah. So, what's up? I do email and SMS marketing. And so, with the like subscribers, you want to avoid emailing them at all costs because like every time you send an email, thousands of cancellations, correct? and so, how but like a lot of times like the product needs like education in order for people to like stick through for like actually habit building. And so what is like that onboarding sequence of like emails and SMS like right off the bat until like what are the things you want to hit somebody with and then after that like right when they subscribe and then after that you're like all right I'm going to leave these people alone.

36:24>> Phenomenal question. so and I don't agree with this approach like I go back and forth on this too but >> so I Shaq and I talked about this and what we do we just send the billing stuff the stuff that we're legally acquired required to send. if you talk if you look at so like his biggest turn point in the business is immediately after someone takes the discount they take the discount to subscribe they immediately cancel gaining the system. If you talk to your subscription provider, they can set up a window where after they are acquired and they take the acquisition offer, they can't cancel for 10 days, 7 days, whatever it is, just to ensure that they get the product and try it before they cancel. We pair that with a 50-day happiness guarantee. If at any point you're not happy, we'll refund you. That combination makes happy customers low churn. We use that window to all of our onboarding, all of our ritual habit building and then after that we don't

37:29once they rebuild that's it. We don't unless it's like you know really cool giveaway or sale we don't send anything. >> Got it. So in that first initial period you are hitting them with like educational emails and SMS of just like this is what happens like after you experience. >> No. So the for the first period we go hard on that. Yeah. And then once that window expires then we stop. >> Perfect. Yeah. Makes a ton of sense.

37:51Thank you. >> Kayla, when you're done back behind you, >> any tips, Jordan, on cash flow management? We're currently spending about 20K at a 0.9 return. Yeah. >> And it's already getting pretty tight. >> Yeah. >> Any advice there? >> raise earlier. >> Yeah. it it cash flow management is totally dependent on your cohorts, right? some people can, it's okay burning a bunch of cash because they get a healthy return in 90 days. To truly understand your cash, you need to understand your margins and your payback periods.

38:27What your CAC target or efficiency target really is is an extension of what cash flow metrics you need to hit. That's why I talked about the me on that triangle, right? That number is the easiest in my experience to back into free cash flow. Set those targets and stay disciplined. and if you want to show me your cohorts after, I can we can talk more about it. >> Thank you. >> That's the team at Gains & Bulk. So, you kind of have an idea of what they're already doing.

38:56>> What's up, Brian? Good to see you, dude. >> Good to see you. >> so you know my business, which got dozens of SKs. >> And which business? >> Yeah, there's a few. >> so I'm curious. Have you thought about adding any SKs now? You you know like you you made the point once you got them on subscription you don't leave them alone. >> Yeah. >> But yeah I is where that's fed into your strategy.

39:19>> I would say skew expansion is probably outside of flavor the number one LTV driver in a business. we are looking at enhancing our offering with a few different product launches next year. launching new flavors, launching new products, easiest way to increase your LTV massively. Massively. >> Repeat the question. Yeah. So, he's he asked where where would that fit into let sleeping dogs lie with the subscription? I let I still let the let the sleeping dogs lie. Right. When we launch a product, we do our entire email list except a very select group of people.

40:07and we leave them alone. There are so many people that come through our popup that are whatever that we're more interested in. How can we use those SKUs to and price pack architecture to get people on a higher AOV and a recurring plan that will yield a higher LTV, right? And that's how we fit that into the picture right here. Hey Jordan, I'm Ronnie. Great talk. Thank you. I run a DDC jewelry brand. We're spending about 3 to 5K a day and I'm just curious.

40:37>> Does this still work if you don't have a subscription product? Do we need to add a subscript subscription mystery box or something like that? Or >> you you don't need you don't need to have a subscription, but this model in order for it to function and work right, you need recurring revenue, right? And so the hard part about your business is your products are intended to be bought for life, right? and people can't eat their jewelry unfortunately. if what I would do if I were you is I would find my hero SKs and then I would find other adjacent upsell skews that I can do and then create email flows and post-purchase flows, upsells that get the most amount of money I can in 90 days. I would split test different offers. If they bought a necklace, do they want a bracelet? And I would figure out exactly what the take rate on all of those things is, organize them the best way possible, and then look at my CAC payback on 90 days with those flows in

41:32place on average to start to replicate this model as best as possible. >> Thanks, >> Jerem. >> Thank you very much, brother. >> Thank you, guys.