Get to know your customer with Rose Hamilton of Compass Rose Ventures
In this interview, CPG and ecommerce expert, Rose Hamilton, shares her best tactics and techniques to help natural products brands scale their businesses in a way that’s strategic and customer-centric. If you’re a Brandrunner™ wanting to better understand your end consumer and connect with them in a way that makes them sticky customers, this interview is for you!
Rose helps brands deploy these tactics every day through her ecommerce growth advisory firm, Compass Rose Ventures and also works with Netrush’s brand partners as a Netrush Advisor. She has a vast background in CPG and ecommerce, spanning The Vitamin Shoppe, Nutrafol, Pet360, and more.
Claire: It feels like there is a lot of product centricity in this industry right now, which I think can be less impactful overall compared to brand centricity or, even better, customer centricity. In your work, are you seeing brands get tripped up here often?
Rose: There is a lot of product centricity out there. But great brands transcend products. Especially now, as competition is only a click away and it’s getting more expensive every day, building the brand needs to be the #1 focus, otherwise you’re just putting money down the drain. So brand leaders need to define the brand and remember, customers buy what you believe. As a brand, you have to be really clear about what you believe in, not half-in and half-out.
Claire: And where does the customer fit into all of this?
Rose: Part of defining the brand is knowing that the brand is for this customer. Rather than trying to be everything to everyone, drill down to the sub-niche and become a master of that customer.
Claire: How do you recommend brands actually go about becoming a master of their customer?
Rose: When I start working with a new brand, I’ll audit them from top to bottom, and nearly every time I find that we need to conduct a listening lab. A listening lab is not a focus group where there’s group think, but rather working with a well-established moderator who can tease out the qualitative insights on an individual level that will then become the language that breaks through to the core customer.
Claire: What type of results tend to come out of those listening labs?
Rose: Every time I walk out of a listening lab with a brand, they will say to me, “I had no idea. I learned so much,” and it will completely change the go-to-market strategy.
Leaders get so close when they work in the business, that they lose sight of working on the business. You’re concerned about margins, supply chain, data integrity. You’ve got a lot going on, so having someone who sits at the table and guides you through the lens of the consumer is incredibly valuable. I find that those that do that work have very different business trajectory than those who ignore it. And those that see the wonderful work that comes from the listening labs then tend to put in a consumer R&D budget the next year, because they saw the value and the consumer will continue to evolve, so it’s important to continue the work.
Claire: This all sounds great, but expensive too! How can brands see the ROI in this type of work?
Rose: Brands think they can’t afford to do it, but I would argue you can’t afford to not do it in today’s world. A dollar spent on getting to know your customer is far more valuable than the dollar spent on media if you can’t convert. When people ask me how they can improve conversion and get a better return on investment, it’s usually because the message is off.
Oftentimes brands go through the exercise of repositioning themselves, and they’re so passionate about what they do that they’re convinced it’s perfect, and put a bunch of money behind it and say they’ll do some A/B testing. But unfortunately in today’s world, you’re going to have to blow through quite a bit of money to get enough volume to see what does and doesn’t work. And that can be about the same amount of money had the brand just taken the pause and put the concept in front of a few consumers first to ask, “Does this resonate with you?” When we do that, nine times out of 10 we go back and do a rework. That’s a whole lot cheaper than letting it sit in market for two months until you can draw some conclusions after you get the volume. You’re already making money in month two, because you chose a better path and one that resonated with your consumer better.
So take the pause, go reinvest the dollars into the consumer, and then get your engine running at a faster clip than you ever would have.
Claire: That makes a ton of sense. Are there additional opportunities that are low-hanging fruit, like ratings and reviews?
Rose: I absolutely use the ratings and reviews in tandem, but I think one gives you something different than the other. The ratings and reviews will be based on what the customer chooses they want to say to you. What is more valuable is what they don’t say to you. A listening lab gives you the chance to probe further on something that could even just be in the consumer’s subconscious, but you’re hearing their brain out loud as you get them talking.
However, brands can use ratings and reviews when they don’t know who their customer is, and they mine through the data to get a better sense of the different cohorts of consumers leaving ratings and reviews, and what those cohorts want. So it can be used as a foundation to understand, to pick up some clues. That can also tell you where you’re losing customers in various cohorts, where they’re not happy with the product or the brand.
Good third-party data can help with some of those clues as well, and you can even go to your own current database and ask them some questions to learn what might be of interest to them, what people care about. There are all kinds of ways to learn more about the consumer.
Claire: Let’s dive deep into the consumer a bit more - we know each brand is going to have their own sub-niche with their own specific customers, but are there any common consumer themes you’re seeing in the natural products space through these listening labs and broader consumer work?
Rose: Consumers don’t trust brands anymore. It’s changed a lot over the last five years, because the space has gotten so cluttered and there’s so much “snake oil” out there. Unfortunately trust goes down every time there’s a bad actor in the industry. So consumers are looking for the proof and they’re looking for authenticity.
And we’re all humans. As consumers, we want to feel seen and heard. What’s so neat about this natural products industry is that we’re all consumers of the stuff we make, so we can have that empathy if we get to know what our core customer cares about, and show it. If you’re worried about flavor, if you’re worried about ingredients, you may be missing what the real problem is. Is it really sleep, achey muscles, the digestive system not working? Is it that I just don’t feel good? Is it that I feel like I’m aging? Fortune favors the emotionally connected. Fortune favors the bold, but also those that are emotionally connected to their customers.
Claire: What do brands need to do to get connected and instill the trust back into the consumer?
Rose: First, I think it’s those simple, basic messages that will get through to people. I’m coming off of several listening labs, with two natural products sessions literally back-to-back, and with every single consumer we spoke with, I heard how critical clear and simple messaging is. If it’s not clear and simple, they’re not going to trust you. You’re not going to be credible.
And then the very next question is going to be, “Does it work?” And, “Why should it work for me? Do I see people who look like me? Are you inclusive of my problem?” As an example, if I’m losing hair and looking at products for hair loss but I see someone else’s type of hair, or their hair loss pattern is not something I can identify with, I might not trust it. It’s simple nuances around trust and putting really authentic images out there.
It’s about centering your message around those real problems we’re ultimately trying to solve for our customers, so that they feel seen and heard. And then you’ve got to get the social proof, the professional proof, whatever proof that your core customer cares about.
Claire: You mentioned that competition is only a click away and it’s getting more expensive every day. How are you helping brands navigate that?
Rose: There’s been such a heavy emphasis on new customer acquisition and getting the cost of acquisition down, but in the natural products space, very few products are designed to be taken just once. So in order to find what you can afford to pay for a customer in this competitive environment, the emphasis should really be on lifetime value versus new customer acquisition. You need to be mindful about if they’re going to take the product the third, fourth, or fifth month, and knowing your numbers inside out.
You need to understand your cohorts. What have you done within a cohort once you’ve brought a new customer in, and how long are they sticking? Where are you losing them?
There’s a reason people are leaking out - go talk to customers and find out why they left you. That’s far more important than looking at what your competition is doing, and how they’ve got a greater potency than you. That’s not actually the issue. The issue is, did the product work? Did you solve my problem? And are you keeping in touch with me? As an expert in this space, are you bringing me innovation and new ideas I can relate to and that help solve another problem?
As an example, if the customer needs to take four pills in order for something to work, disclose that up front, and have amazing recipes for how to take the product to keep people on it. And then staying connected is huge - email, texting, videos, tips outside of the product. Things that transcend the product and that are making the customer’s life better. Helping them with unmet needs that maybe they didn’t even know they had.
Claire: That mindset shift towards customer lifetime value versus customer acquisition cost brings in so many different levers and ways to capture the consumer, beyond just the paid search ad itself, as an example.
Rose: I really feel like public relations has turned into conversational marketing. It seems like earned marketing is the new marketing, sort of like orange is the new black. It’s about intimately knowing your consumer and how to surprise and delight them, and cause them to want to amplify your brand on your behalf.
There’s a reason why podcast marketing is so successful now - because you’ve got a captive audience, and when you’ve got a great podcast host, it won’t feel like advertising. It’s the host talking about how they’ve used the product. So public relations has turned into getting on other people’s stages and letting other people help as your brand advocate - not only help sell your products, but more importantly help you get connected with the people that have the problem you’re solving.
Claire: This has been so helpful. Any other key challenges you’re helping brands work through?
Rose: One last thing to touch on would be hiring. I’m watching some brands move faster than everybody else by not relying on hiring every single thing. They're getting real clear on their core competency and core DNA, and then from there, asking themselves, “What can I afford to outsource? And who’s on my board of directors?” The board is now more important than ever because that board should be opening doors for you and helping you.
So on the hiring front, don’t be shy to look at fractional opportunities. It may be more expensive to do it that way, but why bring the headcount on and all the overhead when you’re in the middle of a sprint and you need to accelerate. Get smart thinkers at the table to help accelerate you.
ABOUT THE SERIESWe’re keeping up the momentum of Expo West 2022 with a limited series all about the natural products industry. Throughout the month of March and April we’ll be publishing a powerful combination of category-level data, interviews with industry professionals, and expert perspective on the most important elements of the natural products space.
ABOUT THE AUTHORClaire McBride leads research, insights, and education for Netrush. She has spent the last five years helping brands grow and optimize their ecommerce businesses through written research, events, share group discussions, and one-on-one consulting, formerly with Cleveland Research Company before joining the Netrush team.
