How Understanding Their Customers Led to 1400% Growth

Links:

• Website: DISCO

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Raphael Paulin-Daigle:
Welcome to the Minds of ecommerce podcast, where you'll learn one key strategy that made leading ecommerce companies grow exponentially. We cut the bullshit and keep the meat. In a 15 to 20 minutes episode, founders and executives take us through a deep dive of a strategy so you get to learn and grow your online line sales. In the last episode, you heard from Chris Mead of Crossnet, who shared how they grew the company by primarily hiring freelancers instead of full time staff. Today on episode number 23, get ready. Ben Smith is the founder of skincare brand Disco and he'll be sharing how focusing on understanding their customers led to increased marketing efficiency and of course, growth for the brand. I'm your host, Raphael Paulin Daigle. And I'm the founder of Splitbase, a conversion optimization and landing page agency for direct to consumer e commerce brands.

Raphael Paulin-Daigle:
This is minds of e commerce.

Raphael Paulin-Daigle:
All right, Ben, welcome to the show.

Ben Smith:
Yeah, thanks for having me, Raphael. Happy to be here.

Raphael Paulin-Daigle:
Yeah, I'm glad that we get to chat today because, I mean, look, I've known you for a little while. You've grown disco 1400% over what, the past like two years or so, and you've done a lot of things pretty well. And I think we share the same mindset when it comes to understanding your customer and really diving deep to create landing pages and change your website messaging. So that's what we're going to talk about today. And I'm super excited to know more about how you've done it at disco.

Ben Smith:
Yeah, I appreciate it. Happy to share whatever scar tissue or learnings or mistakes that I've made along the way.

Raphael Paulin-Daigle:
Sweet. So I'd love to know, customer research, why is that important to you?

Ben Smith:
Yeah, so part of the reason I started, or the two main reasons I started disco were one, I'd struggled with skin issues personally. So I sort of experimented with various skincare products, mostly from non gendered or even female brands. And while there is some case to be made for, they're not necessarily needing to be like male specific or female specific or non gendered brands. They could all sort of fall under one roof. The fact of the matter is there isn't a lot of, if any, brands that speak directly to men. So on a basic level, I wanted to create a brand that sold formulas that worked for my skin and then secondly, spoke to men like myself. Because if you don't meet men where they are, in other words, make brands that they want to buy products from specifically in a historically stigmatized space, they won't buy. So with those two thesises, or thesai, I guess to use the correct version of that word, I set out to start disco.

Ben Smith:
And what I did wrong, from a customer research standpoint was just assume that if we launched with a really great brand and then really great formulas, the rest would sort of fall into place. I know, I realize how naive that sounds now, right? But when you're building something, you tend to build fairly quickly. And what I should have done and what I would do in the future when I ever I launched other brands is doing more customer research, more market research, and then ultimately actually setting up what I would call like dummy tests, right? Building like a fake MVP version of your brand and setting up actual ads to get a rough directionality around conversion rate, cost per click, even CPA, if you're going to set up like a fake storefront and then just refund them after. And that way you can at least justify, actually, here's what the demand looks like in the real marketplace, in the real world. And then you could also probably gather even more information about the potential customer there too. So you go super broad in your marketing campaigns and see if there's any sort of signals from those. Like maybe for example, if we'll just use men's skincare again here. Like if we set up and spent say $10,000 on a dummy campaign and we noticed, hey, the cost per clicks here are really strong, but the conversion rates really low, maybe we need to tweak the messaging.

Ben Smith:
But if the cost per clicks and the click through rates are mostly like guys aged 35 to 50, we know that we should build the brand around maybe a more masculine, like older sort of male focus aesthetic versus maybe a Gen Z focused aesthetic. Right? I'm just kind of making this up as I go. But point being, long story short, I think really understanding your target demo and the problem you're solving and who you're actually selling to allows you to kind of reverse engineer your entire marketing funnel, your copy, your creative, your landing pages, your onsite experience and your messaging, et cetera. And that's something we should have done a better job with in my case. But I've obviously course corrected over time and learned the hard way. Yeah.

Raphael Paulin-Daigle:
And I think you've faced something that a lot of DTC brands have faced over the past year or so.

Ben Smith:
Right.

Raphael Paulin-Daigle:
Which is design and nice packaging only takes you so far at one point. It's like, there's a lot. Well, most DTC brands that are launched these days, I mean, they look great. They've got cool packaging, and it can only differentiate you so much, or it can only help with your marketing so much. At one point, if you're not targeting the right person, it's going to be pretty hard to push the needle. So let me ask you this. What was that moment? When did you realize that, hey, maybe you didn't really have your target audience or your ideal target audience yet?

Ben Smith:
Yeah, I mean, it took us a year to have what I would call like a meaningful month of sales, right? So we launched in October of 2019. It wasn't until October of 2020 that we had a month bigger than five figures in sales. And obviously from there we grew really quickly. But I would also say that's partly attributed not just to maybe a lack of product market fit, but also just founder market fits. I think I'm the right person to be running this company, but I didn't know a single thing. Not literally like, negative things about growth marketing. So think like copy, creative, campaign management on the back end, landing pages, conversion rate, CRO, et cetera. I knew nothing.

Ben Smith:
And so if I was going to start a GDC brand these days, it's a lot harder than it was before to actually do well. It's easier to set up and launch a brand because there's just so many tools and resources and sources of capital to do so. But to actually build and scale a brand to a meaningful size from a revenue and profitability perspective is much more difficult because cpas on digital platforms are very high. So, yeah, I mean, in short, I would get really smart or have a co founder or someone involved from the outset that is just a top notch user acquisition person. Because if you don't have that, you're at a huge disadvantage. Obviously, if you come up with an idea or product that has amazing product market fit, you could potentially scale without having that expertise. There are some instances where the product just does super well because you just nailed product market fit. But even if that is the case, having a really strong growth person involved from the beginning, and it could be you, this is all stuff you can learn.

Ben Smith:
If it takes you a year to launch a brand, these are all things that you could be teaching yourself along the way so that at least you're dangerous. So that when you go to hire freelancers or agencies, you can kind of sift through and pick the quality ones. So anyway, yeah, I think in short, it's just one really going deep on trying to identify product market fit from the beginning and then either having someone on your team or yourself be very user acquisition minded from the outset, too.

Raphael Paulin-Daigle:
Yeah, I love how you're saying how understanding your customer was really one of the things that helped you scale the brand. But what I also find fascinating, I had sobased work with many companies that are pretty fairly large companies that, believe it or not, are also experiencing the same issues. They kind of got lucky in their early growth, but they hit a plateau. And then at one point, they just can't seem to grow past, I don't know what it is, 10 million, 20 million. And the thing is, that issue is not unique to new brands. Some brands are just luckier than others, I guess, to hit that wall little sooner. But there are still a lot of brands, and we see those every day, where they get to a point and they completely ignore some of their biggest segments of their audience or potential audiences that could be really great for their products. And it's just because they haven't really taken the time to understand who their customers really are.

Raphael Paulin-Daigle:
They're just spending so much time trying to optimize their Facebook ads that they're kind of ignoring the rest. So when it comes to understanding your customer, you've talked about testing audiences. But outside of that, what are some other things you do to really try to understand that customer? Do you do surveys or anything like that?

Ben Smith:
Yeah, I mean, at a basic level, I think when you're building a fast growing company, regardless of what sector it's in, especially in consumer, though, you're usually building, at least in my experience, you're building so quickly that you don't actually take enough time to take a step back and think, right, so the best investors and founders, from what I've gathered, typically think like 80% to 90% of the time and then only actually execute like ten to 20% of the time. Right? Whereas you can get caught up in this flywheel where you're executing 80% to 90% of the time and only thinking ten to 20% of the time, which is not what you want. So taking a step back and extricating yourself from the business and being able to look at the key problems you have, identify them, and then prioritize those things, it's such basic advice. Right. Applies to also how you think about the customer, too. I recently did this maybe two or three months ago when we were in the throes of the OR, excuse me, two or three quarters ago when we were in the throes of the iOS sort of fallout, when our CAC blew up and we didn't have any insight into data attribution, et cetera. So what we did basically was take a step back and really just look at all of our past customers. We surveyed them.

Ben Smith:
We also looked at our analytics on Instagram. This takes literally like 10 minutes, right. And just sort of noticed a theme that our audience was actually older than we thought it was. So that then lends itself to making copy that speaks to a slightly older audience, maybe, right? Speaks to maybe using older models in the creative and then the landing page where you're sending them. So there's continuity from the first point of contact to where they're hopefully converting on site too. So taking literally just a few minutes to actually dive deep and see who is buying your products, while that sounds like the most basic advice in the world, is something that we didn't actually do or didn't do that diligently before. So taking a step back and doing that really unlocked a lot more growth for us and drove our CPA way down. So equivalent examples with other brands might be like, hey, they position the brand in a sort of Gen Z fashion, but for whatever reason, maybe there's like a cohort of women aged 50 to 60 that really like this product for some reason.

Ben Smith:
And you never really know unless you stop and do the diligence and take a breath and look into that deeper. And there's ways you can find out why that is right. You can survey the customer post purchase in an email flow. You could include like an Inquirer post purchase survey on your site. So what we've done recently is for all new purchasers, we show them one Inquirer survey, which is more attribution focused, like how did you hear about us? Where did you find out about us, et cetera. And then for current customers or people that have bought more than once before, we ask them more questions around age and why they bought. So it's a two part question. So I think the first one is why they bought.

Ben Smith:
And then there's a list of issues or skin issues or reasons why you might buy. And then the second part is more about their demo so that we can understand who they are in a more intelligent fashion.

Raphael Paulin-Daigle:
As you've been doing this, have you been able to understand that maybe some customers have specific skin issues that you just totally ignored before? Do you get that type of feedback as well, on top of just demographics?

Ben Smith:
At a basic level, I think everyone, especially men too, right? Just want their skin to look healthy, right? Because who wouldn't? Quite basically. So we were surprised beyond that to find that eye under eye issues were a pretty big issue for men. Or it seems to resonate with them pretty well in some way, shape or form. Everyone has dark circles, whether it's because of what they did the night before or hereditary. And one of our products, the istick, which is one of our best selling products, really seems to solve that problem for a lot of people. So that's one angle that we were kind of pleasantly surprised about. I would say there's also like a contingent of folks that are really unhappy with their body wash or whatever they use to wash their body in the shower, and presenting them with a superior solution that is more moisturizing, smells better and feels really refreshing, but doesn't strip your skin of oils, like healthy oils on the surface. Even for guys that don't really understand what I just mentioned, but they can feel what I just said when they use the product is another one that was sort of surprising.

Ben Smith:
And from there, the others are sort of like more antiaging focused. Right? Like wrinkles, crows feet, et cetera. So probably pretty much what you'd expect. But the istick was a bit of a surprise.

Raphael Paulin-Daigle:
That's awesome. And we've discussed this before, I think skincare brands in general, and for people listening, this is one of split based specialties. We've done 30 plus skincare brands. And when researching customer issues, we realized that, hey, at the end of the day, people are looking for very specific solutions to very specific problems, right? And you can only really talk about the problems your product solves and the outcomes your customer want when you understand what the customer actually wants and the problems they actually want to solve. And I think that's probably one of the issues out there with a lot of brands. They might have phenomenal products, but maybe their product solves a really big issue customers are facing. But the issue is they're just not verbalizing it in the way the customer thinks about that problem.

Ben Smith:
Yeah, I think there's a broader macro theme occurring now where you're basically seeing the d to cification of everything. And I like that. Right. In some ways, because I really like strong brands. I like brands with a story and we might be guilty of this too. Right? Like, I saw the trends, the d to c, and was like, I can create a better version of that. And I'm sure most people's impetus for starting brands are similar, but it's now gotten to the point where it's so saturated and digital marketing is so difficult that what you're seeing is like a lot of brands that have launched in the last year and will continue to launch in the next year or two are really going to struggle just because the competence required to scale in a saturated category now is very high and takes a lot of capital so that you can learn. And look, we've made a ton of mistakes.

Ben Smith:
I was guilty of perhaps starting disco under the same pretense. We were fortunate in that I just kept going when there was no hope. And that's what kind of partly got us through things. And that said, we've definitely spent a bunch of capital, like learning hard lessons. And now we finally arrived at a place where, again, we don't know everything, but we have a pretty good clear picture of who our customer is, what the top two or three issues or reasons why they buy are. And I think a lot of times people ask me, I want to start this skincare brand, either in the male, female or gender neutral space. And the first question I ask them is like, how big do you want the brand to be? And all of them say things like 50 million, 100 million a year. And I'm like, yeah, unless you're solving something so specific, there's about a 0% chance that you're going to be able to pull that off these days.

Ben Smith:
So, yeah, I think the point is not to say that we're better than them or anything. We have a head start of being around for three or four years. And that, I think is going to allow us to entrench ourselves and be successful in the longer term. But for those thinking about starting a brand now, maybe avoid skincare. But more importantly, even if you don't avoid skincare, just make sure that you do a ton of research. You actually have actionable data. And I would strongly advise setting up actual marketing funnels to really quantify the demand for whatever it is you're trying to launch. Because oftentimes you'll be surprised at how few people actually want what you're selling.

Ben Smith:
And if you can sort of quantify or qualify the demand as well, and then do some customer research before you go build the brand, that gives you a lot more leverage. One, in raising money, and then two in how you actually build the brand because you know who you're building it for. It's very basic advice, but it's something that I didn't do and that I perhaps regret. But going forward, if I start any other brands in the future, we'll definitely adopt that philosophy and approach.

Raphael Paulin-Daigle:
And you just answered the question I was going to ask, which is, what would you recommend brands new or not new to do? And I think that research testing with different funnels is super important. I think most entrepreneurs like the sexy stuff, right? Like branding. Building a brand like it's cool. And even if you've got, like a million dollar, $10 million brand, for most people, the most exciting part is still coming up with new products, new branding, things like that. But at the end of the day, none of that matters if you're spending your money targeting the wrong customer. At the end of the day, it comes down to business basics. Right? And so I think simple advice or not, I mean, the simple advice is often the best advice as well.

Ben Smith:
Yeah. The most ancient wisdom is usually the best wisdom, right? Or the older the problem, the older the solution. And what that basically means is if you're asking an existential question of yourself, usually the classic books are the best ones to turn to for answers. And I think the point here is you should really adopt a first principles approach. What problem am I actually solving? Is this a viable business model? And if so, what can we test to prove both of those thesis before actually spending money and launching a brand? So the last thing I'll leave you with is a great brand example of this is, golly, right? The Apple cider vinegar gummies. Pretty average looking brand, average looking packaging, hundreds and hundreds of millions in sales. And obviously, they refers to the gummy category for ACV. But the point is, they had product market fit, and then they worried about the other stuff after they were already scaling.

Ben Smith:
So, look, it's not the only way to build a business, but it's a really impressive case study. And I'm sure they have their issues and problems, too. But that's the one I would kind of model my approach on if I were to start another brand now, which is like, really get product market fit first, and then build the brand around it, build out the product suite around it, build the team around it, because once you're making money, it's a lot easier to move forward with momentum.

Raphael Paulin-Daigle:
Yeah, agreed. Awesome, Ben. Those were all my questions. So if people want to learn more about you, about disco, where should they go?

Ben Smith:
Yeah, you can just check us out on let's disco.com. Again, that's let's disco.com. And then our handle on Instagram is let's disco. So just at let's disco.

Raphael Paulin-Daigle:
Sweet. Awesome, Ben, thank you so much.

Ben Smith:
Yeah, thank you, Raphael. Appreciate you having me on.

Raphael Paulin-Daigle:
All right, that's it for today's episode.

Raphael Paulin-Daigle:
In the next episode, you'll hear from Ben Sehl, who's the co founder of Koten, and he's going to be sharing how they've grown the brand through brick and mortar, which is quite interesting. So make sure you don't miss the new episode by subscribing to this in the iTunes store, on Spotify or wherever you're listening to this. And please, if you've enjoyed this episode, please make sure to leave a review in the iTunes store. I would be very grateful. Now, if you're working on an e commerce store that does over a million dollars in online sales and increasing the efficiency of your marketing is a priority, make sure to go to splitbase.com to see how we might be able to help with conversion optimization and landing pages to improve your performance. Now, if you have any guest requests, questions, or comments, tweet me @ rpaulindaigle and I'll be super happy to hear from you.

Raphael Paulin-Daigle:
Thank you so much for listening and see you on the next episode. This is minds of ecommerce.

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