Vital Proteins is America’s best-selling collagen brand, acquired by Nestle Health Sciences in 2020. Vital Proteins understands the distinct needs of individuals and empowers them to live a full, vibrant life through whole-food-based nutrition and a customized subscription program for its loyal customers.
The Challenge: COVID-19 headwinds and a changing business climate
Like many eCommerce businesses, Vital Proteins saw incredible growth in its subscription offerings in 2020 with a recalibrated focus on digital and direct-to-consumer (D2C) channels. This impact reached its zenith with the launch of Jennifer Aniston's focused advertising campaigns at the end of 2020, where the website had reached records in subscription revenue and customers. With Q1 being historical high water for wellness businesses due to new years resolutions, the growth rates continued through Q1 2021.
But by the end of the quarter, Vital Proteins had several blockers to continue its growth in the eCommerce business. Increased consumer vaccinations and business reopenings drove customers back to retail and away from subscriptions. Supply chain costs also increased, propping up product prices and necessitating catalog consolidation of Vital Proteins’ main products to maintain margins.
These increases would directly impact subscribers, and retention suddenly became the biggest priority to sustain growth. At this point, the Vital Proteins team turned to Chargebee Retention (formerly Brightback) to navigate these changes and improve their retention with innovative ideas.
Vital Proteins' cancel page powered by Chargebee Retention
The Solution: An anti-normative cancel flow strategy
Typically, businesses utilize the cancellation survey and customer rationale to build targeted offers (i.e., customers who want to reduce the no. of products are offered a ‘skip’ or ‘swap’). However, this model assumes that cancellation reasons are an accurate signal for the right offer.
To minimize the guesswork, Chargebee Retention helped Vital Proteins easily set up targeted multivariate testing.
Chargebee Retention's Multi-Audience, Multivariate testing
Multiple pages in Chargebee Retention were created for multivariate testing:
A control page that assigned offers based on reason code
Specific pages for each offer ($5 off, $10 off, 10% discount, 25% discount)
The test setup was designed to determine whether presenting randomized offers to customers increased the likelihood of a user deflecting. In the meantime, Chargebee Retention was connected to all key systems in their tech stack via webhooks in a single two-week sprint.
The Result: 2x Increase in Save Rate
Vital Proteins arrived at its moment of statistical reality with multivariate testing — fully optimized discount offers doubled save rates vs. offers based on cancellation reasons. Thus, the efficacy of target offers based on customer profiles became a stair-step improvement over survey targeting.
Vital Proteins’ experiment shows clear winners for offers over control
Optimized retention efforts for high-LTV loyal subscribers
Vital Proteins had both one-time purchasers and loyal subscribers in its customer mix. Unsurprisingly, the Life Time Value (LTV) of their long-term subscribers was 2-3x that of one-time purchasers.
When supply chain disruptions and the increasing price of goods forced Vital Proteins to increase costs, the team predicted an increase in churn with valuable customers migrating to lower-cost competition. But they were also concerned about abuse — giving heavy discounts to subscribers with a strong cancel intent could invoke perverse incentivization.
To combat this and make rewarding loyal customers a lot more contextualized, Vital Proteins used Chargebee Retention. By identifying users of higher value and grouping them into a High LTV audience, Vital Proteins was more likely to retain truly profitable subscribers and prevented discount abuse.
Vital Proteins’ tailored offers to long-time customers
Any customer who had been a subscriber for more than six months was given a higher discount offer. As a result, Vital Proteins doubled the save rate for customers with strong recurring purchase intent and kept them on the program.
Vital Proteins rapidly increased save % after implementing offers to higher LTV customers
“Chargebee Retention gave us the targeting ability to create more valuable offers for our best customers, which would have taken months to develop with our in-house engineering team,” said Emily Keyser, (former) Director of eCommerce Program Management, Vital Proteins.
Automating retention with Chargebee Retention's ML-led Testing
Vital Proteins responds to its ever-growing, ever-evolving customer mix by deploying Chargebee Retention's machine learning and automated testing solutions. The outcome — churn rate optimization, minimized maintenance grunt work.
Today, with a strong eye for strategic reimagination, the Vital Proteins team truly puts their retention on “autopilot” and ensures they intelligently respond to changing market conditions.