Building Relationships in a Crowded Market with Damian Soong of Form Nutrition

Kristen: 

Hey, everybody, and welcome back to Playing for Keeps Season Two. I am super excited about today's episode. I am sitting down with Damian Soong. He was a fan of the podcast, and I actually kind of found him connected through that. Went and checked out his company, Form Nutrition. He's the CEO and co-founder of Form Nutrition. Absolutely fell in love with the brand, fell in love with the mission, love what they're doing. And so I had to get him on the podcast to talk to us this year.

Kristen: 

So, hi, Damian. How are you doing today?

Damian Soong: 

Hi. Yeah, no, I'm good. Thank you. I'm very excited to be here. Thank you for having me.

Kristen: 

Yes, thank you for coming. So just to get us started off, can you tell us a little bit about yourself and Form Nutrition, kind of the background of the brand?

Damian Soong: 

Sure. Okay. So, yeah, my name's Damian. I'm a co-founder at Form, and you know Form really is plant based nutrition for body and mind. And by that, we talk about plant based protein for the body, and nootropic concept supplements for the mind. So they're the two main product categories that we operate in.

Damian Soong: 

We're predominantly online, direct to consumer, formnutrition.com, and then also in the UK at various high end retailers such as Selfridges, Planet Organic, Net-a-Porter, Soho House. Interesting places where maybe you wouldn't expect to see a protein brand, like the VIP suite a Heathrow.

Damian Soong: 

So, yeah, that's us in a nutshell. I guess what we really kind of set out to do was elevate the whole idea of nutrition to be more than just a protein shake after the gym, and rather how you nourish your whole self. For us, that was really interesting because once you start to broaden the definition of nutrition, you start to see that it can encompass so much more. So how you nourish your whole self can be talking about education, can be talking about mindfulness, how you look after your body and brain and everything.

Damian Soong: 

And for us, it was important to do that with credibility. That's something that's very important to us as well. So I had a nutritionist, Dr. Adam Collins. He's a PhD with 20 years experience. And my other co-founder, Natalia, aside from having a background in luxury with LVMH, she's also a qualified meditation teacher, having studied with monks in the pool, and Google, to all kinds of stuff. And then also Pete as well. He's ex-Marine, Iron Man, and kind of all around operations guy for us.

Damian Soong: 

Yeah. And so that was it really. It is really about trying to elevate the whole idea of nutrition. I'm trying to take something that by definition is about the self, and this is the interesting thing about nutrition. It's almost by definition ... Well, it is by definition about the self, and to make that about others. And I guess we'll kind of come onto this with B-corporation and the work that we do in the Gambia and so on. So that was very important aspect of the brand.

Damian Soong: 

And then, finally, I guess we wanted to do it all in a very beautiful and aspirational way. A product that you're not embarrassed to have in your kitchen, and you don't have to hide it away in a cupboard. And, of course, something that really tastes amazing, because at the beginning when I was starting to kind of research this space, most vegan proteins, they tasted terrible. So yeah, so that's us in a brief nutshell.

Kristen: 

Yeah. You've said so much in there that we're going to unpack today, and I'm super excited about it. I really, really love you guys' nutrition is about the self, but how can we also make it about other people, which is something that you really see on you guys. You guys have this brand with a much broader story than I think a lot of other kinds of nutrition supplements brands have. You have this unique aesthetic, the focus on a broader health, and then this emphasis on giving back. So the brand model you guys have on your website and everywhere is "we believe we can realize the greatest version of ourselves while being mindful of others." Can you kind of expand on that and how you guys found that focus, and then how you maintain it as you build?

Damian Soong:

Well, that particular phrase came from months and months of copywriting and really trying to distill down the essence of what we all thought. But it kind of goes back to what you touched on there about this thing about nutrition being about the self. When you looked at many nutrition brands, especially in the UK and I think in the US maybe three, four years ago, they pretty much were nothing more than "Here's some protein. Take this protein. You'll get big biceps." And that was basically it. It was just pure bodybuilding, and there was nothing really that was thinking about nutrition in that broader sense, making it aspirational, making it something that is a beautiful product, and more of a lifestyle product. Yeah. I say to some people, why? Why was there no Aesop of nutrition?

Damian Soong: 

So that, I think, was the key for us. And then that phrase, "realizing the greatest version of yourself while being mindful of others," it's really acknowledging the point that everyone is on their journey to peak performance, whatever that means to them. Whether you're a busy mother, or an athlete, everyone's trying to perform at their best. And then also to acknowledge the point that you can do that while being mindful of others, and that's whether you're being mindful of the people around you, of animals, or of the planet. For me to perform at my best, nobody else has to suffer.

Damian Soong: 

So that was really where that phrase comes from. That really permeates through all the decisions that we make, all the things that we do from the way that we select our ingredients to the content and education and way that we conduct ourselves.

Kristen: 

Yeah. Okay. I really love this emphasis on the greatest version of ourselves. And something I'm talking all the time about is find the story that your customers are living, find the things that they're going through. And I think a lot of nutrition brands really try to hone in on one specific kind of person, like bodybuilders or a vegan mom. Very, very specific personalities. But what you guys have done is you've said, okay, we understand that people of all types and people from all different backgrounds, we're really trying to do the same thing, and just become the best version of ourself, perform at the highest level we can at what we love. And so you've built this unique opportunity to say our products are actually really good for both the bodybuilder and the mom, and it's not having to drive into this super niche target demographic, but more you're driving into this niche story that your customers are living.

Damian Soong: 

Yeah, exactly. And we have all of these types of customers, and what we say at Form is we say Form is for everybody. And we have a bit of a line where we say bodybuilders, ballerinas, and everyone in between. We advocate for empowered wellness, whatever that looks like to you. And literally we do have bodybuilders, and we do have ballerinas, and we do have everyone in between as customers.

Damian Soong: 

This is what's always been so amazing to me is to be able to create a brand that can speak to so many different people, because a bodybuilder and a ballerina might have different nutritional goals, but they can still share many of the same values, right? And I think that's what we're trying to do with Form is to pick out these common values and common beliefs across a whole cross-segment of different people.

Kristen: 

Yeah. And I think that's where the DTC economy in general is headed, is that I think consumers are pretty used to seeing targeted ads, targeted products that are for their lifestyle. Personalization is kind of one thing, but really diving into values and beliefs in what these people believe in on a deeper level is even more connecting. It's so much more than saying, "Okay, you're a bodybuilder. We make these things for bodybuilders." It's saying, "We see that you're a bodybuilder, and you care about the environment, and you care about animals, and you're a vegan, and you care about your products looking beautiful on your shelf. We've got you there." And that's so much deeper of a connection to get people, and then, as we're going to talk about in a little bit, keep people on, and keep people coming back for your products.

Damian Soong: 

Yeah, exactly. And I think this is really talking about the rise of the conscious consumer. They're looking to go deeper into a brand. They don't just choose it based on which one they like to look of or which one they like the taste of. They want to understand the values. They want to understand what the founders do. They want to understand how the company is distributing profit, and what good it's doing in the world. And I think we're only going to see more and more of this as the Millennials get older and have more spending power, and certainly as Gen Z starts to come through. It's just going become a bigger and bigger issue for all brands to consider.

Kristen: 

Yeah, definitely. So that is something that you guys obviously focus on a lot. You've got a really cool social program. You are a certified B-corporation. So we've kind of covered the why you guys decided to do this from the get-go. It makes so much sense. You guys really believe in it. It's authentically coming from the founders. So can you just run through these programs that you have set up, and then we can kind of dive into them from there.

Damian Soong: 

Yeah. So right from the very beginning when we set Form up, we knew that we wanted to have this giving aspect. And really, for me, there were two possible ways of doing that. One was just partnering with a big charity like UNICEF or something like that, and with every product sold, giving X pounds or whatever it might be. Or we could identify a really small project where we could see something really tangible, and really talk about tangible benefits with our customers. And, for me, that was a story that gives something so much more powerful for us to work towards and for our customers to relate to.

Damian Soong: 

So I actually knew this charity already. It's called the Bansang Hospital Appeal, and it's in Bansang in the Gambia, and it's run by a woman who's actually based in the UK, an English woman who literally just went on holiday there in the 90s, and stumbled across this hospital five hours down the river in Bansang in the middle of nowhere. And she was just completely shocked by what she saw in this hospital. And I won't give you details of the kind of thing she saw, but it is was horrific, as you could imagine. An overcrowded hospital with no electricity to be in the middle of Africa.

Damian Soong: 

And she effectively just made a decision there and then that she couldn't leave that hospital in that state, and her life's work literally now has been about raising money for this hospital to the point now in the UK she's been awarded an MB by the queen and all of this kind of stuff. So she's really taken grassroots charity and made a massive impact into what is now tens of thousands of people's lives.

Damian Soong: 

So for us, or for Form, that was something great for us to be able to get involved in. It's a way that the impact of what we do can really be seen and can really impact real people's lives. And also it made sense for us as a nutrition brand to be giving food, and what we actually do is we enable, through the Form Feeding Fund, the provision of food to patients and escorts who would otherwise not be able to afford it. Because we don't realize there there's a lot of people, say, that are subsistence farmers. So if they leave their home, they have no way of eating. They don't have any money. They live off the land. And so many people would either just not come to hospital, or in the case of bringing children to hospital, would leave the hospital before they're medically discharged.

Damian Soong: 

So it's amazing that just a small amount of help to give some food can have such a big impact in terms of healthcare and everything else. So it's been an amazing project to us to be involved in.

Kristen: 

Yeah, that's so amazing. And it really reminds me of a company we talked to last season, TWICE Toothpaste. And so they work with the GLO Good Foundation, and same thing, you see the founders are actually going, and they're working with these kids, helping kids, and you're seeing the actual, tangible results of what the customer is buying.

Kristen: 

And so, as you mentioned, you have these two options as a brand. You can do the one where you partner with a big charity, and X-percent of your profits are going to that charity. And then you have the second option, which is what you and TWICE are doing, is this identifying a smaller project and really seeing the tangible benefits.

Kristen: 

So back on the business side of things, why is that tangibility and the really storytelling aspect of your giving back initiatives so important to your customers?

Damian Soong: 

Well, I think it's important, but first actually just to touch on why it's important to us. I think in terms of having a purpose like that, it gives us within Form, the people that work for Form, and the people that work with me, and all the kinds of people around, it's something much bigger to aim towards, right? It's just so much nicer to know you're having these kinds of impacts rather than purely just selling a product. So that, I think, is the main thing for us as a company.

Damian Soong: 

And I think it's the same answer as well for the consumer. They like to know that the company that they're buying things, the company that they're trusting ... And you've got to remember, they're really trusting us with their money ... is providing them not just a quality product that tastes great and looks amazing, but it's actually doing something positive in the world. And that's super important for us, and something we went on to further cement with the whole B-corporation thing, which I know we'll talk about as well. But, yeah, I think that's it in a nutshell in terms of the purpose that it gives.

Kristen: 

Yeah, I love that. And you basically said by buzzword that I say here all the time, or buzz phrase. Being more than products. Selling more than just a product to people. And I think that's so powerful. And especially I really love how you brought that back to the company, because so much we talk about is are you an authentic company? Do your customers feel your passion in every single touch point you have with them? And so hearing it from the co-founder of this business to say, "As a company, knowing that we can say we're working towards something bigger, and we're not just selling products for profit. We're doing it and this all means something," it's going to trickle through every single thing every employee at your company makes. And you can see it. You go to every little piece of content, every email that Form sends out, and you can feel the authenticity.

Kristen: 

And that's something that I really want to highlight to listeners that you can create authenticity or you can have it built in from day one. And I think having it built in from day one, like you guys have, just sets you up for such longterm success. And you have employees that are happy, you have employee retention, and then you have customer retention. That one really important piece of knowing it in your bones as a co-founder, and then providing it to your team to really feel those values, too, I think goes a really long way. And it's something that's not always talked about enough.

Damian Soong: 

Yeah, exactly. It was really important for us to bake it into the DNA of the company right from the beginning. So even from prelaunch, when we had our signup page, where obviously we were acquiring emails and so on, the kind of driver to get people to sign up was not because they going to get a discount when we launched or something like that. It was that for every signup, we were donating a meal to the Bansang Hospital Appeal. So it was even just something little like that where most brands would just go, "We're just going to collect email addresses. We're going to offer them all 20% when we launch, and hopefully sell some product." We just kind of rethought that around a different way, and that, I think, gives us credibility to talk about these things. And people accept or realize that it's not just something that we've bolted on afterwards, and they're not just giving X-percent to whatever charity it might be. It's actually something that is in our DNA.

Kristen: 

Yeah. And I really think that it comes through, that baked in aspect that from day one. And we're going to see it with the conscious consumers, and we're going to see more and more brands. It's going to be a big topic in 2020. Sustainability. Having values, where you're giving back to. But being able to say "From day one, we weren't discounting products just to get people in. We only wanted to sell to the people who care about this mission, who share the same values as us, and then just take it from there rather than kind of tacking on," which will be something for a lot of businesses to think about as they start implementing new initiatives like this.

Kristen: 

So if it's not built in from day one, how can you then launch it so it feels very, very authentic to the brand.

Damian Soong:

Yeah.

Kristen: 

So, moving on, we kind of touched on this, but you guys are a certified B-corporation, and it's going to be a hot topic of 2020. Can you just explain to the listeners what it really means to be a B-corporation, and what that entails for your business?

Damian Soong: 

Yeah. I guess the best way to describe B-corporation is a certification for businesses that want to use businesses as a source for good. And it's really about, I think, what you'd call the triple bottom line. So rather than just looking at profit, it would be looking at people, planet and profit. So it's really about giving a framework and a structure, and a way to hold yourself accountable to all of these things.

Damian Soong: 

But it's also just an amazing network as well. So some of the businesses now that are B-corporations, obviously the big ones that you'll have heard about in the US is Patagonia, Ben & Jerry's, and so on. But really, like I say, a way of being accountable, a way of enacting the triple bottom line in your business, and a way of pursuing things other than just than just profit. Looking after your people, looking after the environment, and all of these things.

Kristen: 

Yeah. And I think it really also does give your business ... It's a certification, so when someone comes on, really conscious consumers can look at it and say, "Okay, there is someone who is watching this company regulating, and they've said, 'yes, you guys get the stamp of approval. You meet these values that your customers are really looking for.'"

Damian Soong: 

Yeah. And it's a really tough accreditation to get. There's a very rigorous process to get through, that looks at everything from the way that you handle your waste, to the way that you look after your employees, to where you get your electricity from. So it's all-encompassing, and a very, very good thing to have. And I think it's something that we'll continue to see a much larger focus on through 2020 and beyond.

Kristen: 

Yeah, I agree. So just questioning your audience and these sorts of programs that you have, do you guys use any kind of feedback or qualitative data? Is there anything that you're looking for to give you an alert that says "These programs are working. Here's where we can evolve, here's how we need to better communicate." Is there anything you're kind of looking for in your community, in your customers to say, "All right, these programs are on the right path and we're doing the right things for our customers here?"

Damian Soong: 

You mean in terms of it driving customer engagement, or you mean in terms of the efficacy of the social program and charity?

Kristen: 

Let's start the efficacy of the programs.

Damian Soong: 

Yeah. So that's an interesting point. I was out in the Gambia in November last year. Or actually the year before last now, so it was 2018. And what you realize when you get there is they don't have these big reporting structures and record keeping, so this is actually one of our challenges we're putting in place with them now, quarterly reporting and so on, so we can get back much better data and metrics on the kind of help that the, that the fund is giving. But they track things like the number of formula milks going out to newborn babies, the amount of drugs being dispensed to HIV patients, all kinds of things like this. And the amount of money being given for food, which in many cases just as simple as like a boiled egg or a banana, which is amazing that that can just be a luxury when someone doesn't have enough food to live.

Damian Soong: 

So that's really the kind of stuff that's going on there. And that's one of the things that when you go there, you realize what an impact all of these, to us, seem tiny things can have.

Kristen: 

Yeah. And then just lastly on the sustainability and social programs side of things, where do you see these programs moving forward into the future? Do you have any high hopes for what you guys are thinking in the future? Any things that you're thinking to evolve, and kind of keep going on this path in the next few years?

Damian Soong: 

Well, we started with this one fund, the Bansang Hospital in the Gambia, and then we see it as, hopefully, as we grow and the funding that we're able to provide grows, we want to be able to open out to other charities. We'd like to be looking at education as well. That's something that's very important to us in the work that we do here. But also education is one of the most effective ways of lifting people out of poverty, so as we grow, that's another type of project that I'd like to get involved in as well. I don't necessarily know where that would be, but I'd like the the Form Feeding Fund in some ways to evolve into just a much larger fund that is then being administered across all types of projects that we find to be in need.

Kristen: 

Yeah, that's amazing. And now, to get into the really nitty gritty, we're going to start to talk about a little bit more of the business side of retention. Some serious tactics that you guys use that I really like, but for listeners, I do just want to know there is a reason I started this interview by talking about these social programs, and that is because it does connect back to retention. We didn't talk about it specifically here just now, but like we're saying, customer loyalty, understanding the customer's values, understanding the story they're living, understanding what kinds of charities and social programs your customers are going to connect with creates that longterm brand affinity, creates loyalty, creates that image in your head as a customer that, "Hey, when I buy from this company, I'm doing something tangibly good that I believe in." And that is really, really powerful for retention. So that is why I wanted to start this interview kind of covering that because Form Nutrition does it so, so incredibly well.

Kristen: 

But now we're going to move on a little bit into some tactics. One thing that you guys do that I actually don't think a lot of eCommerce businesses really do is using free really deep content as lead magnets to bring in customers. This is super common in B2B. You see the X-point checklist for this, or you put in your email, you download that. This is not so common for DTC businesses. I love this approach because I'm a content geek, but I'd love to hear from you a little bit about this initiative, how you guys came up with it, and the impacts you're seeing of it.

Damian Soong:

Yeah. Okay. So I think for us, the reason we've pursued these courses, these email courses ... And basically, as you say, it's a five or six day email course on a topic that's probably going to be of interest to one of our key demographics. So that might be something like intermittent fasting, or body composition. We did one recently on stress. So there's all these different topics which will be of interest to various demographics.

Damian Soong: 

And the reason we kind of pursued this route is really when we first launched, and were looking very carefully at the CACs on Facebook, Instagram adverts and so on, it was obvious that these are rising quickly, and they're just going to get more and more expensive with increased competition and also with people spending less time on social media platforms. So really it was almost like a needs based thing. We needed to figure out a way of how can we bring people into our funnel at a much cheaper way than just showing them an advert saying "Buy some protein."

Damian Soong: 

And we built up the courses really as a way of attracting people into the top of the funnel for a much lower cost of acquisition than an advert that was just showing them to buy some protein or whatever it might be. And this was important because it's not just about that. It's also about developing then trust with the customer, developing authority, and actually giving them something of value. And these courses are actually valuable. They're written by PhDs, and they're really good quality information. Giving them something of value before we just go and ask them to buy from us. So I think that's a really nice way of trying to develop a relationship with the consumer. Not just to try and jump on them straight away, and sell them your product, but to establish a relationship, and show that you can deliver value, and show that you have trust and credibility.

Kristen: 

Yeah. My next question was going to be can you explain how the top funnel drives down to retention, but you already did it. You explained it right there. It's almost like a longterm play.

Damian Soong: 

It's a pretty long term play, yeah.

Kristen: 

Yeah, instead of just throwing ad money at the wall, and saying, "Okay, which ad is going to get us the most purchases? Let's keep doing that again and again," it's kind of this hamster wheel that's never going to end, especially in 2020 with rising [crosstalk 00:25:22] costs. It's just nonstop at that point.

Damian Soong: 

Yeah. And I think that's just also my preference as well. I know very well that you can spend time on Facebook ads, and Google ads. Iterating a creative based on which one's performing well, and tweaking ad lines or a little word here and there. But that's not really that interesting to me, and I think if that's all you're really doing, then in many ways you could just be selling anything, like a tin of sardines or something. And that's not really what I wanted to be doing. It's the product and the brand and the content that we obsessed about.

Damian Soong: 

And I think you hit the nail on the head about content being a much longer term play. That's something that I believe, and I think that's something we've invested heavily and as you've seen with the courses, but also with the inForm, which is our content platform that we publish pretty much daily on now. We've invested in an editor and a writer there, so we're publishing all the time, which is something that's quite unusual as well for a brand. And like you say, it's a longer term play, but it's also just stuff that I'd much rather be doing. I'd much rather be publishing content and sharing amazing information than just spending loads of money on Facebook ads.

Kristen: 

Yeah. So I have to dig into this because you are a minority in this, I think, in DTC.

Damian Soong: 

That probably means I'm wrong.

Kristen: 

Yes. No, I think you're right on this. This preference for "I would like to do this a certain way," "I would rather be writing content and sharing knowledge than just getting quick sales." And so I have to ask you where does that preference really come from? Is there something that you have experienced building another business? Is there something that you saw that made you just really approach this ... It's almost less of a hasty approach to business, and this rushed "We need to get this many orders, we need to do this" kind of panic business versus this slow drip. "We're going to do this right. We're going to do this by creating big relationships, even if that means taking longer to recover cap costs, if it means taking longer to actually get to a certain profit margin." Where did that come from? Where did this kind of approach derive from?

Damian Soong: 

I think it's really our values as the founding team. We have this saying that we're quick thinkers that don't rush. it's obvious you can spend loads of money on Facebook ads and grow very, very quickly. But the question is, are you doing that at a profit? And I'm fairly old fashioned that I want to kind of grow the business profitably, and not necessarily just doing it as quickly as possible. Because I think, in the longterm, that's really how you build a brand with longevity. So it's really, I think, probably about finding the balance between the two, and, hopefully, that's the line that we're treading.

Kristen: 

Yeah, I love that. I love the quote, "Quick thinkers who aren't in a rush." That's such a great way to look at it. And I've said it in like the last three emails I think is that 2018, 2019, people kept calling it kind of this golden era of DTC, where you could just put 10 into Facebook and get this many sales back. And it was just this easy thing where you could set up a business launch, make money, grow really quickly, profitable or not. Sell whatever. And I think that consumers have noticed that trend, and now they're going, "I don't really want to buy from a company that's just here to make a quick buck and get out." They're actually here to buy from companies that they're like "I could come back to you in three years and I can still feel the value." Which is why I'm just so excited to hear this from you. It's so refreshing to hear a business being built from values from day one. So I really wanted to congratulate you and your founding team on that.

Damian Soong: 

Oh, well, that's amazing to hear, especially from you. So I'm very grateful on behalf of all of us.

Damian Soong:

But I think you make a really interesting point there in that there was a time two, three years ago where you could raise money, you could grow the business unprofitably by acquiring customers at a loss. And it was a question of passing the baby onto the next person in a way, right, in terms of having to just continually raise money to fund that. And what I'm seeing now, and the mood music, I think, is starting to change, especially when you see what's happened with WeWork and things like that. I think there'll be a change over the coming years where investors are going to look much harder at businesses, and whether there is a clear path to profitability, not one that's just a long way off in a spreadsheet.

Kristen: 

Yep, totally agree. And now we can't talk about this longterm acquisition play, retention play with the education and lead magnets without touching on attribution. It's messy and complicated topic, and sometimes trying to find the perfect attribution can actually give you some false information, can kind of lead you down a wrong path. So I'm curious how you guys have approached attribution, both on the acquisition and retention side, when it comes to these lead magnets that you're building.

Damian Soong: 

Okay, so I'm kind of laughing because this is one of our biggest ... If Pete was here, this is what me and Pete have looked at since day one, and have been round and round in circles with various people.

Damian Soong: 

So attribution is a nightmare, right? That's basically it. We've done everything from trying to build our own models through to averaging other models. We tend to use Google's 40-40 positional as generally our best measure. But then we also use Last Click for a reporting basis, and then look at the Facebook platform itself for tactical decisions day to day. And I think that's really the only thing you can do. One thing that I've found quite useful after chatting to quite a few people just on Twitter and other people I know in the space is obviously just keeping a track in terms of total media spend versus total sales, and just to keep that that in track. But per platform or per channel, it's impossible because literally the numbers can just vary crazily depending on the attribution model you use. [crosstalk 00:31:43]

Damian Soong: 

And I think especially for us, because most of our Facebook spend, for example, isn't about generating sales, it's about generating signups. So we have a slightly more complicated model, and obviously we can see the cost that we're paying per signup, but then we have to track that customer sign up through the whole channel and see when they then convert to become a customer and so on. And we all do this on a much tougher basis on ourselves as well. So obviously we look at LTV and all of this kind of stuff, but we try to acquire customers that are profitable on the first order, which is obviously much, much tougher because if they then go on to spend some more money with us, we'd like to have that as profit. And there's also a chance that they might not. And I think LTV can vary quite considerably depending on the acquisition source. And I think that's something that maybe people don't often realize, and where sometimes you can come unstuck.

Damian Soong: 

So it's a minefield. I don't have any of the answers, and I'm just as confused about it today as I was when I first started looking at it. And I think I'm guessing there's a deliberate obfuscation about it because it's in the interest of all the platforms to have us all confused and continuing to spend so much money. But what's your take on it?

Kristen: 

Yeah. Exactly what you said. It's a nightmare in trying to figure out exactly where things are coming from. My thoughts really mimic something that you said, is looking at it more as this overall tracking how much media spend are you spending versus how much are you making. Because it's so difficult, because you've got a Facebook ad that's converting someone to an email course that they're going to go through, and maybe they convert on one of those emails, but also maybe they get through that email course, they see an Instagram ad, and then they come directly to your site the next day because they remembered, "Oh, yeah, I should probably actually buy this."

Kristen: 

There's so many things that can happen that you don't actually get a full story of where someone's coming in. And so I'm on team track as much as you can, do what you can, stay consistent with your metrics. But then also always looking at it with this higher level holistic view of are we creating experiences, are we creating onboarding things that are bringing in profitable customers? And if it's not on order one, then is it at least on order two then we're profitable on our CAC cost. Yeah, it's a minefield.

Kristen: 

There is no perfect answer for anybody. And something I find really interesting that you said is that you guys are always aiming to be profitable on the very first order. I think that's pretty rare, and I'm curious how you guys have, one, managed to figure out like how you even do that, what the cost is, and then how you keep evolving your channels to try and hit that profitability on the very first order.

Damian Soong: 

As if there weren't enough metrics already in all of this, we invented our own one called First Order Contribution Margin. So that literally is just the amount of cash that's left on the average first order basket after obviously the cost of goods, cost of shipping, and any other associated costs. So we try to acquire customers at that cost or below, and, obviously, that doesn't always happen depending on what channel. Like Organic, it always looks very good, but on Facebook, for example, you'd be way over that. And that's where the averaging kind of comes in, because as I said, all of our Facebook activities are top of the funnel.

Damian Soong: 

But, yeah, like I say, it's so confusing. And we used to drive ourselves mad about it all the time because it drives me nuts when I know something's not quite right. But then you have to accept that it's an impossible question. So like I say, we look at the high level, we look at buy channel on a last click basis from Google. We look at the buy channel on the 40-40 positional basis from Google. And then also the own brand platform, the own channel attribution platforms as well. And just have to take a view on all of that.

Kristen: 

Yeah. And we're going to talk about this a lot. I'm going to be covering this a ton in 2020, but this metrics versus customer experience argument of we can follow a metrics down a rabbit hole and drive ourselves crazy for two weeks, and come out of it with not an answer or an answer. We're kind of guessing on based on data, but we're not sure if it's accurate because it came from Facebook or it came from Google, and then just arguing that with, okay, but let's look at our acquisition channels. Is this email course really valuable for the customer? Is this email course something we believe in, is it authentic to our brand? And if we can answer that with yes, then at some point you can kind of release metrics and say, okay, we've done all the work. The experience is going to follow, the metrics are going to follow us here, and we can kind of give it a little bit of trust.

Damian Soong: 

Yeah, I think it depends on your objectives as well. So we always say that we're brand first, okay? So what's most important is the copy that we write, the ads that we have out, or the course or whatever it might be is on brand. And we're very well aware that we could make changes to our website or changes to our ad copy that would probably increase conversions by shouting things like "Buy now," or "Discounted by 20%," or whatever it might be. But that, for us, isn't on-brand, and isn't, for us, aligned with our longterm goals. So, yeah, I think everyone has to find their balance of how that's going to work for them.

Damian Soong: 

But it's a nightmare, and I'm a fairly technical, data analytical kind of guy, so I dread to think how people think about this who aren't. You must have to have so many people around you. Yeah, it's a real nightmare.

Kristen: 

Yeah, definitely. And you just touched on something that I kind of wanted to wrap around, and that is you guys' as approach to discounts. Discounts are arguably, and I don't think people think of it like this, but arguably in DTC the most popular lead magnet, and that is get people in the top of your funnel by getting their email first and foremost. You see it on almost every site you go to, a pop up that says "Give us your email and get 10% off your first order." It's to the point where when you don't see it, it's kind of nice. It's pretty annoying.

Kristen:

This is something that I haven't seen anywhere on the Form nutrition site. You and I have kind of talked about it before this call a little bit, and I love your approach here. So can you share with the listeners you guys' motto on discounting, and how you use them really strategically for loyalty rather than as this very common lead magnet?

Damian Soong: 

Yes, so we've never discounted to as a way of attracting customers. So if you go on our website, if you sign up to our emails, if you follow us on Instagram, you will never see a publicly published discount trying to attract people. And that really I think goes just to my values, and also Natalia as well. Her background is LVMH, so in the luxury space, you don't really see discounting. You don't walk into Prada and it's all 30% off.

Damian Soong: 

So and that's really about value. We want to create a brand, right? And you don't really create a brand by making it so easily discountable, because I think in people's minds, they wise up to that and they see. Even like the abandoned cart emails that everyone does. It's almost like customers know now if they go to most websites, and go to the checkout, and then leave, a couple of days later, they'll get a 20% discount code. And I think that's just got to the point now where the consumer, or I would when I'm the consumer, I see that it's disingenuous, and I'd rather just sell our products, which are great value at great price, and just be open about it.

Damian Soong: 

We do discount, but we discount to great customers as a reward for loyalty, or to introduce them to new products that they might go to try. We're very, very focused on looking after our customers, and I think that is the one key thing in terms of retention.

Damian Soong: 

But, yeah, in terms of attracting customers to a brand, I think if you need to discount your product to attract customers to the brand, either it's the wrong product or it's the wrong customer, in my mind.

Kristen: 

Wow. If there is a pull-quote from from this episode, it is that right there. "If you need to discount your products, you either have the wrong product or the wrong customer." I love that so much.

Damian Soong: 

Good. That was a good one now [crosstalk 00:40:37].

Kristen: 

Yeah. I noted it down so I can pull it up in the episode. Sure. No, I loved that. And I love how you guys are just flipping the strategy basically on its head is you could launch a DTC brand and say, "Okay, let's do what the big guys are doing. Let's do what has worked for X, Y, and Z?" And that is to get people to sign on to get them that first purchase, let's discount it, and then see what we can do after that. You guys' approach is we're not going to discount ourselves, we're not going to devalue what we've created, because we know it's worth the money, and we know that our values are aligning with the customers that we want to be pulling on. And then from there you get it.

Kristen: 

And then after that it's, "Okay, you've been a customer for this many months. You've bought this many things. Thank you so much for doing that. Here's 10% off." That's an actual genuine discount that the customer can feel and say, "Wow, this company knows that I'm loyal to them, and now they're going to discount it for me because of that." That's so much more powerful.

Damian Soong:

Exactly. And that's just, yeah, like you say, it's more powerful. It's much more valuable. Yeah. It's just the way that I'd want to be treated as a customer, with respect and with rewards for my loyalty. And a brand or a company knowing what I've spent or what I've done with them, and being rewarded for that.

Kristen: 

Yeah, definitely. So to kind of wrap up our conversation about these retention tactics that you guys have really used, and just to summarize them for the listeners, what we've talked about is the social programs and sustainability, B-corporation. Adding on top of that, using lead magnets and actual content value to bring people on versus just ads. And then, finally, not discounting for new customers but using discounts to drive loyalty. To wrap this all up, could you just give us ... As you guys look at your business and growing your business, when you're looking at customer retention and customer experience, how are you guys really just approaching and thinking about it?

Damian Soong: 

Well, the whole experience is important right from the first interaction with the brand, right through the journey to when you open the box, and go forward from there. Customer service is always something we've invested heavily. And most customers, when they email us, they'll get a reply within a couple of hours, which is pretty good. And we also have live chat which is amazing for customers getting answers to their inquiries very quickly, as well as a live chat over WhatsApp as well. These are just little investments in time that can really help a customer when they've got a query, or they're not quite sure what product to buy. And I'm sure, although I have no data, these kinds of initiatives drive up retention, and they drive up conversion rates on the website, because if you can get an immediate answer to a query just as you're about to buy, that's obviously going to help.

Damian Soong: 

So we've invested very heavily in looking after our customer as best we can. We have things like a no quibble returns policy. So even if someone buys a protein and doesn't like the flavor, which is possible after all, it's a food product and not everyone likes the same flavors, we'll spend a lot of time helping them create a smoothie blend or something that they will like. And if we can't, then we'll give them their money back or we'll send them another product that they might prefer. So it's this kind of service I think is key. And it's always my most pleasing thing when I see the reviews that say our customer service is amazing, and we have an amazing customer service team with Vanessa.

Damian Soong: 

So, yeah, that, I think for me, is the key, is just exemplary service, to really be customer focused.

Kristen: 

Yeah. And I love that you mentioned that you have this ... Well, one, I love that you call it a no quibble return policy. I love it. Secondly, that when someone comes in for a question, they're not always just getting, "Oh, I didn't like the flavor." "Okay, return it. It's fine." You've trained your customer support team to go the step further and say, "Okay, well, why don't we try it like this, and if you don't like it then, then we can still return it, try something new," whatever. It just gives the customer so much more, I think, credibility to the business and to say "They're not just trying to sell this to sell this. They're trying to sell this so I enjoy it."

Damian Soong: 

Yeah. And the thing that people don't realize is when we do that for a customer, some of our best, most loyal customers are those that first had an initial bad experience, okay? But then they came to us and said, "Oh, I don't like this one. It's a bit" whatever. And we'd spend four or five emails coaching them, through finding a way to make it work for them, or maybe swapping it out for another product. And then they find a mix or they find the flavor that they love, and then they're the most evangelical customer you could wish for. And this, for us, is key. We've never done too much in terms of Instagram influencers and so on, although we have a lot support from them. We've always focused much more on real customer advocacy, because I think that is the most powerful thing.

Damian Soong: 

Social media has changed a lot, but it's still, when you think about it, really just a new form of word of mouth, and for all the influencers that there are, if you actually think about the last product that you bought or the last restaurant that you went to, it's probably not because an influencer told you. It's probably because one of your friends told you. And I think that's another powerful thing that a lot of people miss in this social media age as well. So we very much focus on the customer, very much focus on real customer advocacy, and getting our customers to share.

Damian Soong: 

And if you look at our Instagram, for example, you see a lot of people are always sharing the creations that they've made with our products. And that's for us the best form of marketing.

Kristen: 

Yeah, just having that engaged audience. And what's cool is that you said that some of your most loyal customers are the ones who had an actual bad first experience with a product, and you guys just built a relationship with those people. And then they were able to discover their own success with the product, and I think that's huge. And then seeing them share those things, it just extends that community, it extends the brand values, it extends all the work that you guys put in where you can say CS is a very difficult area to really amp up and ramp up, and it's expensive, and it costs a lot, and there's a lot of training. You can't always see down the line where that reflects into your customers. I think that is a really cool way that you guys are saying, "Look, we've invested so much here, and we see it because these customers who didn't like the taste at first are now sharing recipes that are making it more accessible to a bunch of other people." And that's huge.

Damian Soong: 

Yeah, no, exactly. And if you go to our website and you look at the reviews on any of our products, there'll be hundreds of reviews on some products, and most of them are very, very positive. But, occasionally, you'll get one where it's someone that you know, didn't like it or didn't get on with it, and we can track those people. And then we see that after the coaching through the customer service process, they come back as a customer on a different product or with the same product, but just knowing better how to make it work for their taste.

Kristen: 

Yeah, I love that.

Kristen: 

Well, awesome. We're going to wrap up with three quick questions. First, can you tell us one of your favorite customer stories from building Form Nutrition? If there was ever a time where maybe it was a single customer you guys went out of your way for, or someone that wrote a certain review. Something that really stands out in your head as "This is why we do what we do because of this customer right here."

Damian Soong: 

Oh, God. To be honest, there's so many, but I guess it's always around the products and the reviews. They have real impact on people's lives, and that's always amazing to see. There's a lot of people with illnesses, recovery from cancer, who you need to kind of keep that protein up who've sent us amazing stories of how our products have helped them.

Damian Soong: 

Our sleep supplement actually gets a lot of these types of stories. One sticks out in my mind. Someone bought it for her father-in-law who was a chronic insomniac, and hadn't slept for 10 years or something, and it literally changed his life just by being able to have a good night's sleep. And we forget how powerful just sometimes a simple nutritional change or intervention can have on someone's life.

Damian Soong: 

But I guess the biggest stories really on customer stories is actually what we see in Bansang Hospital in the Gambia when we spend time there. Just seeing the real impact that something so simple like just a small amount of money for some food, or some pharmaceuticals, or formula milk for a malnourished baby can have. These are things that kind of stick with you and give you a real sense of purpose in your work.

Kristen: 

Yeah, I absolutely love those stories.

Kristen: 

Next question. Where do you see Form Nutrition in three to five years?

Damian Soong: 

Well, we talked about brand a lot, right? And so you probably get that that's our big focus. I see Form as becoming a platform brand. I'm very interested in content, as we've said. I see us being a global, trusted nutrition brand. And actually I see nutrition is just really being the beginning of what we can do under the Form umbrella with our values and so on.

Damian Soong: 

Content, as we've said as well. That's something that we want to push even more. I've always wanted to have a magazine, and that's something that we're going to start playing with this year. So, yeah, that's the direction we're going.

Damian Soong: 

But actually, we don't think that far ahead, but try to make the right decisions day by day, and we'll see where we go. But, yeah, we've got a lot of things that we could be doing, and we're just really taking our first steps now.

Kristen: 

Yeah, that's so exciting. I cannot wait to see what you guys do with the magazine. You'll have to let us know if that comes out so we can check it out.

Damian Soong: 

Yeah, yeah. And, of course, I should say actually we launch in the US this year as well. So that's a big thing for us.

Kristen: 

Oh, that's super exciting. Congratulations on that.

Kristen: 

And then, last question, what is something that's really surprised you as you've grown this business?

Damian Soong: 

I was going to say how hard it is, but I don't think that that was a surprise. I'm surprised actually by the customers and actually how much people really care about other people. And that's just something that's really so reassuring and nice to see. We have so many customers writing back when they hear about our initiatives, saying that they love what we do, or even sometimes offering to go and volunteer and stuff like that. So that's really amazing because the world's a bit of a crazy place right now, and it's always nice to be reassured that there's lots of nice people around as well. That's something.

Damian Soong:

I'm always surprised by how much people know about nutrition, and how keen people are to learn about it. The questions that we get, it's amazing the level of knowledge that people have, and the level of detail that they want to go into nutrition and supplements and so on. So we're very lucky to have a PhD nutritionist on board to help with those queries.

Kristen: 

Oh, I bet. Yeah. That's the best answer I've ever gotten to that question, that you were surprised by the customers. That just made me so happy. And so much hope.

Damian Soong: 

Yeah, it's hopeful. It's really nice, and it's lovely to be able to do something every day that is so rewarding in this way, and that does make a difference into so many people's lives. And that's not overplaying it. That's the reality that nutrition can have on people, and, of course, what we're doing in the Gambia as well.

Kristen: 

Yeah. Well, thank you so much for coming on today, Damian. This was an amazing conversation. It's incredible to hear from a brand that is growing from values first and very, very securely customer first. It's exciting for the future of DTC. I'm super excited to watch you guys grow, and we'll have to have you back on to see how things are going probably next year.

Damian Soong:

Well, thank you so much. It's really been a pleasure, and a really interesting conversation.

Kristen: 

Very good. Thank you so much.

Damian Soong:

Very much appreciate your time. Thank you.