Scott Meiklejohn: Hey, I'm Scotty from Recharge. On this episode of Hit Subscribe, we're talking to Nicco Gloazzo, Director of Ecommerce at Kettle & Fire. Kettle & Fire sell bone broths and soups that are convenient, delicious, and nutritious with benefits to digestion, gut health, joint mobility, and more. We chat with Nicco about Kettle & Fire's designated customer retention team and the steps they've taken to prioritize subscriptions, reduce churn, and reward long term subscribers. We also talk about the benefits of personalizing content for customers and raising brand awareness through social media. There's a lot to discuss, so let's get to it. Nicco, thank you so much for joining us.
Niccolò Gloazzo: Thank you, Scotty, for having me.
Scott Meiklejohn: Could you tell us a little bit about yourself and a little bit about Kettle & Fire?
Niccolò Gloazzo: Yes. Sure. I'm Niccolo. I'm director of the eCommerce here in Kettle & Fire. I've been with the company for around, right now, I think three and a half, almost three and a half years pretty much. I started initially as an external freelancer just managing the commercial rate optimization program, then after that time of our time and then full time to join the company. It's been a great ride so far, pretty happy. Kettle & Fire is actually a company pretty new, I would say, that is on a mission where we serve actually the first... We were the first bone broth company with a shared stable product in the market in United States and we always aim and combine to the best organic ingredient that you can have with a product that, at the beginning, started as bone broth, and then we expanded into the soup category heavy like keto soup, keto broth, and then a more, I would say, traditional type of broth that you can use for cooking, or yes, making some nice dishes.
Scott Meiklejohn: What would you have said four years ago if I told this freelancer Nicco, "Hey, a couple years from now, you're going to end up the director of eCommerce at this company"?
Niccolò Gloazzo: Well, at the beginning because I'm Italian actually, and I think you can hear that from the accent, I wasn't really sure. It was totally new for me. Also, if you would said to me that I was going to work full time for an American company working remote or remote because basically we are, I'd say, 60% of the team is remote, and so I don't know, probably I'd be laughing about myself and say, "Yeah, come on." I don't know. Also, because the product that we are selling, we started online as a DTC brand and then we expanded in to retails, it's like a type of product that's still, right now, if I tell to my friend what type of product I'm selling online, they say, "Do really people buy this product online?", and actually, they do so it was funny story.
Scott Meiklejohn: I love that. Yeah, and it's funny to get into there with, "How do you supply that content to let people know about it?", but we'll get into some of that later. You mentioned Kettle & Fire started as this DTC brand. Were subscriptions always in the picture when you guys started?
Niccolò Gloazzo: Yes. Pretty much, yes, except in the early days when Justin, the founder, together with his brother, Nick, kind of launch and did an MVP. If I remember correctly at the beginning, there was probably not straightaway a subscription just because they wanted to validate the idea, but after that they understood, "Okay, here, there is actually a business," I think the subscription was one of the first app that we installed and launch because we know how valuable is a subscriber compared with a one-time buyer.
Scott Meiklejohn: As you grew into this leadership role, what were some of the opportunities you saw on that DTC side with subscriptions that you really wanted to lean into?
Niccolò Gloazzo: Yeah, so I think over the years, subscription became more and more an important part of our business because right now, we have a very big subscriber base of customers that kind of really see a lot of benefit from the product from drinking one broth consistently because all of the value and the benefit that you get from this product. So overall, we really saw how we can have an impact not only on the BTC side but as well on the retail side because right now, for example, what we are seeing a lot is a little shift toward retails, but DTC is still a great opportunity for a customer to try the product and then, "Okay, maybe I'm going to buy from retail on my local stores." So overall, subscribers can get a tons of benefit by being subscribed online.
Niccolò Gloazzo: Of course the price, there's a difference in price, but also I'd say you get points, you get rewarded, you get different benefit, you get early access to new product, you build up points so that you can get discounts for future purchase. Then also the subscription, is a seamless experience, the way that we kind of implemented right now where they can just log in and skip a subscription, skip a month if they don't want it that month anymore. So, I think overall, our focus within making a subscription a unique experience and building that subscriber base is really important for us right now, and that's why also internally, we have an amazing team. We build up a task force with our head of customer support and life cycle manager. They kind of focus only on subscribers.
Scott Meiklejohn: I was going to ask... That was my next question. It was this customer retention team you guys got going on. How did that come to be just recognizing, sure, it's one thing to acquire these new customers, but keeping them is that's where the value is?
Niccolò Gloazzo: Yeah, exactly, because I think there's two different way, right? You need to, of course, acquire new customer to grow your business, but another way is also to kind of retain more customers. We know that a customer that actually stay more within the business, we are not going to pay for that customer anymore when it comes to acquisition, so that's why it's extremely important to reduce the churn at minimum, but of course, by providing a great experience and value with your upcoming box, but that's when we reach a point where we saw that the subscription base was a little bit kind of flat kind of. So we thought, "Okay, it's great to kind of have a subscription-focus task force who are only focused into the customer life cycle type of thing," and that's where the team really did an amazing job in setting up OKR every month and every quarter to define priorities and implementing step by step any type of possible feature based on customer feedback, based on research in order to reduce churn month over month and create that, I think, amazing experience that we are facing right now.
Scott Meiklejohn: Without giving away any of those secrets, I don't take away the Kettle & Fire secrets, are there any strategy you're willing to share of some things the customer retention team noticed little levers they could tweak to help retain subscribers longer?
Niccolò Gloazzo: Yeah. We do recently an analysis, and our current churn rate month over month is super low. It's below 10%, and we saw this decrease in churn, I think, starting September pretty much, and the retention team got set up, if I remember correctly, early last year. So, I think it was really a team effort in that case. A few things that comes to mind to me right now, which I think is really, really interesting, is that we implemented some specific churn type of cancellation flow within Recharge where provide customer, based on their answer, a specific maybe action or next step that they can take instead of canceling. That's really when we saw, I think, an interesting drop in churn rate in that case.
Niccolò Gloazzo: Another interesting thing that we implemented is we started to think about, "Okay, how can we reward customers to stay more within our business and stay more within a Kettle & Fire subscription?" So, by providing a specific gift and reward customer on a specific milestone, for example, if they reach the third cycle, the third subscription renewal, we're going to send a free product or delight and surprise customer based on their lifetime value. All of those kind of small changes, I think that compound over time in order to build a great churn rate. You know what I mean?
Scott Meiklejohn: Totally.
Niccolò Gloazzo: Also, another thing that we actually tested, and I think it's really good, is that we know that our product, it takes time to get into a routine and into an habit to drink it regularly, so what we thought about is, "Okay, let's try to do a test and not force, but kind of alert the customer," that, usually, we require two minimum shipment in order to stick with a subscription if you want to have subscription you can always keep. Of course, you can also cancel your customer support if really you don't have the needs or maybe you don't like the product, but at least, we require two minimum subscription renewal. Sorry. That really kind of...
Niccolò Gloazzo: We didn't see any decrease in customer acquisition cost and also specifically in the conversion rate, not really customer acquisition cost, but we did this AB test testing this value proposition, and we didn't see any decrease in conversion rate for customer that wanted to opt in for a subscription. However, what we saw is that over time, the churn on the zero and day one really decrease and the customer that, of course, want to skip, they can still skip, the customer that want to cancel can still cancel, but I would say we push more for the skip option, at least, in the first one and two month other than the cancellation option in the customer portal.
Scott Meiklejohn: Totally. Sometimes, it feels like the wrong thing. We want those orders but we've seen it ourselves. Customers, the more options they take, whether it's a skip or swap, they stay longer in your program. I really liked what you said, too, about rewarding long-term customers. It's something I've thought about myself as a consumer being a part of subscription programs and recognizing, "Wow, there's a lot of new deals for new subscribers, but as a long-term subscriber, I don't feel as valued." So, I think that's so wise to be like, "The longer you stay in this program, the more value you're going to get out of it."
Niccolò Gloazzo: Yes, and that's funny because what we notice is actually that specifically on a subscription level, most of the revenue is coming from the 80-20 rule, I'd say, so that 20% of customers that stay longer really build up most of the returning revenue. That's why I think the team really was great in bringing this up and say, "Okay, what can we do to reward long-term customers more?"
Scott Meiklejohn: Yeah, it's great thinking. Why not have a task force for that 20% if they're the ones who are really moving the needle for us? Why not invest in how we can keep them longer?
Niccolò Gloazzo: Yeah.
Scott Meiklejohn: We'd love to talk about, you mentioned it kind of off the top, you have this product, not niche, but there is a bit of a learning angle to it. What kind of strategies have you thought about content that you guys produce to inform customers, even potential new customers, about it?
Niccolò Gloazzo: Yeah, the two main touchpoint, or I'd say two [inaudible 00:11:08] that we have for specifically new customers that opt in from subscription is one via email, one via SMS, and also insert within the package itself because, of course, if the customer is new, we want to maybe treat it in a slightly different way with a specific insert. Meanwhile, on the email marketing and also SMS, we have specific flow to kind of guide those customer towards an experience or at least to kind of learn more about the products, get more information about it, and yes, start to experience the product in a faster way to consume the product within the first month in order to get into that snowball effect that, "Okay, you add this product to your routine."
Niccolò Gloazzo: Also, something really interesting that we are working right now on is the retention team is always also focusing having some sort of For You type of section within the website, so having a section specifically where new customer can search for more information about the product and understand more versus someone that already experienced the product multiple time, maybe he doesn't need so many information, but meanwhile, a new customer can have, as soon as he logs in within the portal, have all of those type of information where he can understand better about the product and get a full 360 experience.
Scott Meiklejohn: Yeah, personalizing it a bit more based on where they are in your funnel basically. That's really smart.
Niccolò Gloazzo: Exactly.
Scott Meiklejohn: I know you might not be directly involved, but I got to bring it up because you guys are killing it there. Your social media is really impressive. You have almost 89,000 followers on Instagram, and in particular, your Pinterest averages almost 650,000 monthly views. Do you know any of the social strategy there how that's developing and what your plans are for the rest of the year?
Niccolò Gloazzo: What we can say is since I'd say last year and this year specifically, we're going to go really kind of we really want to invest into brand awareness type of activities. That's why right now, last year, we bring in someone in-house to kind of manage all of our social presence specifically on Instagram and Facebook. Pinterest right now is still, I'd say, we didn't do much recently so it's really when you told me about this 600K, it's, "Whoa, without doing that much?" I mean, we did some something times ago, but right now, not much on Pinterest. However, it's funny that you bring this up because that's something on our roadmap for this year. We want to focus on TikTok, Pinterest, more on Instagram influencer as well, so that's something that really we want to push more specifically from an awareness and brand position standpoint.
Scott Meiklejohn: Yeah. The compounding effect on Pinterest especially if you check out the Pinterest Kettle & Fire, you got beautiful recipes there with great imagery, and yeah, they can just build and build and build over time. Even if you just sprinkle a little bit there and just watch it go, I think it's a great play.
Niccolò Gloazzo: Yeah, and specifically actually, I just want to add specifically for our cooking broth line, which is slightly a different line than bone broth that you can just sit even in the afternoon cooking broth is specifically for cooking, so that's, I think, the perfect place where to advertise that type of product for recipe, so Pinterest would be that's why it's on our roadmap for this year to push this line of product a little bit more.
Scott Meiklejohn: Coming full circle, if we go from that journey of freelancer to now a leadership position, you've seen yourself scale and grow in this role and you've seen Kettle and Fire grow. What advice would you give to a subscription brand that maybe is just starting out and is wanting to make some moves?
Niccolò Gloazzo: Ideally, I'd say at the beginning, it would be great to kind of focus within the customer experience journey ideally, but I think step one is just to turn on subscription. What I mean by that is just have it there because right now, it's so easy to turn on subscription that if we think purely from a performance and growth standpoint, it's great to turn it on. You can turn it on, have it on your website, and start to acquire subscriber. In the meantime, I recommend to, of course, optimize your customer journey and focus first on acquisition and then on retention. It's great to start from a retention from one point of view, but depends from the resources, we know that you need also to acquire customer to grow your business. So, I would say if you have time, split 50-50. Otherwise, start acquire customer and provide whatever value you can which, ideally, is usually the 20% discount that you have on a subscription, and then start to compound improvement within your retention cycle.
Niccolò Gloazzo: Again, depends from the business goal, but if you start from the other way around, could be month that you waste, if you know what I mean, but in order to optimize something that you don't know yet if it's going to work any way or not, if maybe customer are interested within the subscription. What I would say is, for now, just having the subscription there and optimize, say for acquisition, I think it's great to get early signal about customer if they're interested to buy your product regularly potentially, and then you optimize even with customer feedback if you see spike in generate, okay, you can optimize your flow, but without getting any data first to see where maybe customer churn, why do they churn, and those type of information become hard to optimize for retention.
Scott Meiklejohn: Incredible points. Really great. What if you're a little bit farther along in that journey? Let's say you have about a thousand subscribers, would that advice change at all? Would you say now maybe focus on the retention more? Are there certain analytics signals you would look for?
Niccolò Gloazzo: Depends, I think, from what's your growth opportunities within the next year or what's your plan for this year. Everyone has goal revenue target that you need to hit, so acquisition is, of course, top of mind for most of brands, but again, I think an eye on retention should always be placed. Unless you're providing something that is completely off, I assume that your average maybe 15% month over month drop in churn rate, so unless you see you spike in churn rate or something to worry about that customer just subscribe and cancel straight away, then I'd say still kind of acquisition is very, very important, and then when you have the capabilities or even the team in house start to get into the retention side as well.
Scott Meiklejohn: Awesome. That's so great to hear. One of our last questions, we ask this all the time, what physical products do you subscribe to? Do you have anything come into your house regularly?
Niccolò Gloazzo: I think... I mean, not I think, I can tell you the truth, but basically I'm not subscribed to many products. I don't even have Amazon Prime, if I have to tell you the truth, because I don't mind to wait a few days to get a product, first of all. Second, I don't shop much online because I don't like to place my credit card everywhere. That's funny to say from a person that actually need to acquire more customers and everything but I prefer, at least for clothing, I still go to the shop because I like to try them out. Meanwhile, for food supplement, yes, I do shop online actually, but never on a subscription because I'm the type of person that every month maybe change my habits, so I don't have a product that I consume daily, let's say, so short answer is no.
Scott Meiklejohn: I love that. It's so funny, and it's actually a common answer here. Sometimes, when you're so in your industry all the time, it's like social media people who manage social all the time that have no desire to have a Facebook presence or to create content like that, so it makes sense.
Niccolò Gloazzo: Yeah. I think...
Scott Meiklejohn: Yeah, no, please go.
Niccolò Gloazzo: No, I was just saying that, again, it's funny because we do this all day long, and all the time, we just optimize for those kind of things, but then at the end of the day, maybe I'm not subscribed to specific products. However, what I can tell is that I'm subscribed to digital product like Spotify, Shopify, or any type of subscription sauce that it's online that I'm subscribed with. That's where also I can experience to generate or how is the cancellation process of a specific company.
Scott Meiklejohn: Yeah, that makes sense. Nicco, we just wanted to thank you so much for joining us on Hit Subscribe and we wish you and Kettle & Fire the best of luck in the rest of the year.
Niccolò Gloazzo: Well, thanks for having me. It was a pleasure.
Scott Meiklejohn: We'd like to thank Nicco once again for joining us. If you're interested in Kettle & Fire, head over to kettleandfire.com, and if you're looking for more of our episodes, check out rechargepayments.com/hitsubscribe.