Ben Smith, founder of Disco, reveals how his direct-to-consumer skincare brand not only survived but thrived in 2021 despite a 300% surge in customer acquisition costs due to iOS 14.5 and direct competition from Amazon on Google Ads. This episode is a masterclass in leveraging subscription models and diversifying sales channels to build a resilient ecommerce business amidst significant market disruptions.
Key takeaways
Implement a subscription model to stabilize revenue and mitigate the impact of fluctuating customer acquisition costs (CAC) caused by privacy changes like iOS 14.5.
Diversify your sales channels beyond DTC and Amazon to reduce reliance on any single platform and expand customer reach.
Proactively monitor your customer acquisition costs and adapt your marketing mix rapidly in response to platform changes and competitive pressures.
Understand and leverage Customer Lifetime Value (CLTV) to make informed decisions about marketing spend, especially when CAC is rising.
Be prepared for unexpected competition, even from platform partners like Amazon, and develop strategies to protect your brand's traffic and customer base.
Themes
business resiliencechannel diversificationcustomer acquisitionsubscription economy
The year 2021 has been a doozy for Ben Smith. In March, he celebrated an investment round for Disco, his direct-to-consumer skincare company. In April, Disco's customer acquisition cost increased by a whopping 300% with the release of iOS 14.5. In May, he began selling on Amazon, only to see Amazon bid on the exact Google Ad keywords he relied on for traffic to Disco's website.
Frequently asked about this episode
What does this episode say about business resilience?
Implement a subscription model to stabilize revenue and mitigate the impact of fluctuating customer acquisition costs (CAC) caused by privacy changes like iOS 14.5.
What does this episode say about channel diversification?
Diversify your sales channels beyond DTC and Amazon to reduce reliance on any single platform and expand customer reach.
What does this episode say about customer acquisition?
Proactively monitor your customer acquisition costs and adapt your marketing mix rapidly in response to platform changes and competitive pressures.
What does this episode say about subscription economy?
Understand and leverage Customer Lifetime Value (CLTV) to make informed decisions about marketing spend, especially when CAC is rising.
What does this episode say about business resilience?
Be prepared for unexpected competition, even from platform partners like Amazon, and develop strategies to protect your brand's traffic and customer base.
