Organic food delivery service Thrive Market has one prodigious asset that nearly all marketers covet: more than 1,000 points of useful customer data that it harvests for everything from personalization to product development.
But that’s not the only asset that makes the membership-based online shopping club successful. The other is its mission: make healthy living easy and accessible for anybody. That mission not only underlies the business, it also steers its marketing.
Speaking to The Drum’s US editor, Ginger Conlon, about the value of the mission to the business, Nick Green, Thrive Market’s co-founder and chief executive, shares why it was important to him to run a business that matters.
The benefits of a direct-to-consumer (DTC) approach — from cost savings to customer insights — helped Thrive Market’s co-founders bring their mission to life and continue to help it, well, thrive. Green explains how that mission guides the brand’s marketing and customer experience strategies. He also discusses how using Thrive’s data assets, supporting its influencers and highly engaged members, and thinking differently about customer acquisition and retention are ensuring its success.
Tell us more about Thrive Market
We sell an annual membership rather than taking profit on the products we sell. Basically, we sell all of our products at wholesale price.
Early on it was just all third-party branded products. Now we’ve layered in our own Thrive Market brand, blurring the line between being a retailer and a brand. We’ve launched over 500 products under the Thrive Market brand in the last two-and-a-half years.
Why did you decide to sell private label products?
We think that, in the future, the best retailers will have their own brands and the best brands will have direct relationships with consumers. And we think that there is synergy between our third-party brands and our Thrive Market brand. It’s now the best performing brand on the site by far, at over 20% of our sales. That’s because we’re using data we have on sales, trends, search traffic, and more to determine what to launch.
And then we turn the typical private-label model on its head by pursuing higher quality products and real product innovation; for example, we took the canola oil out of our mayonnaise and replaced it with coconut oil.
The goal is to become that trusted source: if you find something on Thrive, and it’s been curated by Thrive or it has the Thrive Market brand on it, you’re good to go. We want to empower our members to find products that align with their values and their dietary goals.
Share examples of how you make that alignment apparent.
One way is our filters. If you’re experimenting with a ketogenic diet or you have a nut allergy, click, click, click, it all filters down. Increasingly, we’ve had requests for filters that are more values-based, like requests for a filter for women-owned businesses. In that instance, we polled our members — 98% are female — and we ended up creating that filter.
Another way is to be a platform for conscious consumers of all types. Increasingly, we’re seeing that our members want to feel like they’re part of a community with shared values, not just get great deals. We now get as many questions on our carbon-neutral shipping program as we do about our free shipping. Last year we went zero waste on performance audits. We did because it was the right thing to do, but it’s turned out to be one of the most popular stories on our blog.
Since we launched, we’ve provided a free membership to a low-income family for every paid member. But one thing that’s been really interesting is that our members want to get involved. They want to know, who are these families? How are they benefiting? How can we help them more?
So, we created Spread the Health, a donate-at-checkout feature. Since we’ve launched that feature, we’ve raised about a million-and-a-half dollars to gift Thrive products to families who are in crisis.
How do you approach marketing?
We take a very member-centric approach to the marketing challenge.
In terms of customer acquisition specifically, we are in the business of selling memberships. We only make money if people buy a membership and then renew. And the best way that we can market the membership is by delivering overwhelming value to our members. So, we believe if we do that – and then communicate that – the marketing takes care of itself and the renewals take care of themselves.
We find that our renewal rates are best in class. We have 65% of customers that are around a year later from a single cohort, for example.
And because of the membership, our reorder rates are also strong. One of the beautiful things about our membership model is that customers make that investment up front and then have a strong incentive to get a return on that investment.
Any channels that work especially well for you?
In terms of marketing “channels,” the best ones for us are those that are based on testimonials from either thought leaders and influencers or members.
We’ve found that it’s essential to work with influencers. We have an authentic story to tell and the best way to deliver it is through word of mouth. Fortunately, our influencers are our friends; they’re actually investors in the company. They believe in the mission and they talk about it in an authentic way.
We, of course, do spend on Facebook and Instagram. We approach those channels through the same lens: how do we do it authentically? How do we get influencers posting about us and telling their stories? Often, the posts are members opening their box of products, communicating with their audience in a way that’s quite candid.
Most important, when people join, they feel like they belong to something; they’re part of a community. They get the utilitarian value, but they also support low-income families. They love the fact that when that box comes to their door, they know it was shipped with carbon-neutral shipping and all that.
Anything else you do specifically for retention?
Again, we want to deliver overwhelming value to our members; we want people to get 10 times the value of what they paid for the membership. Part of that is easy to measure, like savings; it’s easy to see how many purchases it takes for the savings to equal your entire membership fee.
And part of it is utilitarian, like how much time you save when you shop on the Thrive app versus going to the grocery store. Our app is now 40% of our sales. Members add things throughout the day or the week on the app and when they’re ready, they’ll check out. How do you quantify that?
Also, we’re always launching new private-label products. Reorder rates on private label products are the highest on the site. Once you start buying those products, you may get enough value from even a single product that it makes it worth the membership; for example, our diapers have the same absorbency as Pampers but a third of the plastic and non-biodegradable materials at a savings of 15%. That’s worth the membership right there.
But, generally, if someone is thinking about canceling within 30 days of the end of their membership, they’re probably going to cancel. So, we focus on how we get them engaged in the first 330 days.
Talk more about how you use data to better understand your customers.
There are two dimensions. One is, we use data to drive our entire product innovation pipeline. What products we’ll launch, third-party or private label, are driven by data — search results, customer member surveys, sales data, browse data, all the different data that we get on product demand.
The other is on the member side. When you start your first session on Thrive, we’re collecting a thousand-plus data points on what you browse, where you navigate, what you search for, what you read, how long you spend on each page, whether you click on a product recommendation — all of that creates a 360-degree view of the customer.
We also track data over time. When was the last time you ordered? Are you opening email? Are you checking push notifications? And then we can decide, what channel are we going to use communicate to you? What messages and offers are we going to deliver? What products will we recommend? What items will we show on the homepage when you come on?
But we don’t want to over-personalize to where it just becomes confirmation bias and you only buy things you’ve bought before. We still want the element of discovery. And we want that discovery to be intelligent based on what your previous activities have shown.
How does all that personalization impact customer trust?
Fortunately, we’ve built so much trust from our members that they actually want to give us more data. We recently created a quiz where members can go through 18 questions in about seven minutes to tell us more about what they want to see. And then we personalize the experience to them based on that. We see 85% completion rate on that quiz.
We focus heavily on trust — being that place where you don’t have to worry about the quality of the products. That trust is invaluable.
What’s next for Thrive Market?
So much. We’ve launched ethically sourced seafood, meat, and poultry. We’ve launched clean, organic wines curated by a master sommelier — so, the taste profile is like what you’d find in a fine dining restaurant. And we launched 250 private-label products last year. This year we’re going to continue a lot of those efforts, aiming for another 300 private-label products by the end of the year.
The biggest theme on the marketing side, to me, is understanding the move towards conscious consumption, conscious consumers who want to be spoken to authentically. They don’t just want value, they want values. They want more than great deals. They want community, they want to feel like they belong to something bigger.
So, we’re just going to keep delivering overwhelming value to our members, keep building out the data science, keep pushing the mobile app. This year I want half of our sales to be from the app.
And then just keep growing. We have half a million members today; we grew 50% last year. We think there is a much bigger business to be built by making this lifestyle healthy accessible to anybody. What’s beautiful about Thrive Market is that the business opportunity and that mission to make that lifestyle accessible are the exact same thing. If we succeed in one, we’ll succeed at the other.
This article originally appeared on The Drum.