"Subscriptions Are a Tool, Not a Model" (w/ Mike Lackman - CEO, Trade Coffee)
Future Commerce · with Mike Lackman · November 22, 2019 · 68 min
Summary
Trade Coffee CEO Mike Lackman reveals how his company leverages subscriptions as a "tool, not a model" to drive customer discovery and repeat business in the craft coffee market. Ecommerce operators will learn critical strategies for customer education, personalization beyond basic demographics, and how to define your niche in a blurred retail/marketplace landscape, ultimately increasing customer lifetime value and product adoption.
Key takeaways
Educate customers: Trade Coffee intentionally adds 'friction' to the purchase process through guided selling to help customers discover new preferences, which elevates success up the production funnel.
Embrace continuous discovery: Don't assume customers want to repeat the same SKU. Trade Coffee found over 95% of its subscribers desire continuous discovery, akin to music streaming services like Spotify.
Blur the lines between retailer and marketplace: Focus on differentiated, curated inventory with reasonable availability. Trade Coffee acts as a retailer making products on demand but utilizes marketplace-like dynamics for matching.
Personalize effectively: Avoid being too exact with initial product matches. Customers prefer covering ground within a "tight enough circle" of options rather than being locked into one.
Leverage data to empower suppliers: Use customer behavior data to provide feedback to roasters, enabling them to create high-quality products that resonate with consumer preferences.
Two of the smartest people we've ever had the pleasure of interviewing join the show this week! In our main interview, Mike Lackman, CEO at Trade Coffee joins the Future Commerce team to talk about how subscriptions and curation are driving user adoption and repeat business at Trade Coffee. In our "what's new and what's next" segment at the end of the show, Hitha Herzog, retail analyst and author of 'Black Market Billions' joins us to talk Nike's Amazon Exit, Coty's $600MM Kylie acquisition, and the effect of counterfeits on the marketplace during Holiday 2020.
What does this episode say about subscriptions & ltv?
Educate customers: Trade Coffee intentionally adds 'friction' to the purchase process through guided selling to help customers discover new preferences, which elevates success up the production funnel.
What does this episode say about dtc strategy?
Embrace continuous discovery: Don't assume customers want to repeat the same SKU. Trade Coffee found over 95% of its subscribers desire continuous discovery, akin to music streaming services like Spotify.
What does this episode say about product & merchandising?
Blur the lines between retailer and marketplace: Focus on differentiated, curated inventory with reasonable availability. Trade Coffee acts as a retailer making products on demand but utilizes marketplace-like dynamics for matching.
What does this episode say about customer retention?
Personalize effectively: Avoid being too exact with initial product matches. Customers prefer covering ground within a "tight enough circle" of options rather than being locked into one.
What does this episode say about subscriptions & ltv?
Leverage data to empower suppliers: Use customer behavior data to provide feedback to roasters, enabling them to create high-quality products that resonate with consumer preferences.
