Liam Brennan and his co-founders are using ChartMogul to understand their business, align their team, and double their revenue.
What is BusterBox?
BusterBox is a monthly subscription box that delivers healthy treats and fun toys for pets to thousands of customers in Ireland and the UK.
The mission of the team is to offer products that are naturally produced and that don’t include chemicals that can harm a dog. And all of that at an affordable price point compared to traditional pet stores.
We want to make as many dogs happy as we possibly can and save their owners money compared to physical pet shops.Liam Brennan, Co-Founder
I spoke to Liam Brennan, one of the 3 founders of BusterBox, to learn about the unique challenge subscription box companies face and how ChartMogul is helping to solve them.
The Challenge: The subscription box economy is different
Liam admits that running a subscription box company is a balancing act.It's like walking a tightrope and with subscription boxes. There are so many different things going on. Click To Tweet
At any given moment there are so many levers that you can pull. You can invest in a channel, which has a slightly higher CAC but gives you better customers, who repay the investment faster.
The challenge is to find the right recipe.
Unlike SaaS founders, most people who sell subscription boxes are not so focused on their revenue data — in many cases, they don’t even know what the relevant metrics are and why they should matter to them.
In addition, while there are similarities between SaaS and subscription boxes, Liam suggests there are also some big differences in the two models. Entrepreneurs who want to sell subscription boxes need to take them into account.
If you have a good SaaS product, you have a much lower churn and a much higher lifetime value, but your cost to acquire a customer is typically much higher too, and it takes much longer to get somebody signed up. Whereas, with the subscription box, the churn typically is a bit higher, but you can sign people up much quicker and much cheaper than an equal size software company.
In addition, subscription box companies need to keep a close eye on the cost of the boxes they are selling and make sure they have a healthy margin.
Understanding the value of tracking and analyzing their data
Liam admits that at the beginning of BusterBox they weren’t very focussed on metrics either, but they quickly realized the value of measuring and understanding their subscription data.
We weren’t using anything specific — we were looking at the dashboard in Subbly, our ecommerce platform.
Liam admits that Subbly has been instrumental in helping them grow their business. But from the beginning of BusterBox, he and his co-founders knew that understanding their subscribers and their metrics was the key to growing their business. And that required a dedicated tool.
About 3 months in, we started using another tool for subscription analytics, but the data wasn’t correct. We were spending more time trying to figure out churn ourselves, using a combination of that software and Stripe and it was never 100% correct.
Tracking churn proves a challenge
Liam shares that involuntary churn is one of the big issues in the subscription box niche.
Unlike SaaS, these companies are selling to end consumers who would often use a disposable credit card or forget to update an expired card.
Because of that, BusterBox needs to be flexible while making sure they don’t keep sending boxes to people who are not paying for them.
If a customer doesn’t pay, and we don’t automatically cancel them, they go into the unpaid section for 30 days. A lot of the time they’ll come back, it’s just the market that we’re in.
Liam and his co-founders needed a reliable tool that would give them accurate data.
We were getting highly inconsistent data in regard to the churn and customer lifetime value. And there was a lot of manual work involved.
They came across ChartMogul, but the platform didn’t have that feature either. Liam reached out to the support team and made it very clear how crucial this was for BusterBox:
We reached out to your support and said “Look, if you can add this feature in, we’re happy to come over to ChartMogul.” The customer service was unbelievable! Within two days the feature was added on ChartMogul and that was pretty much it, and we just moved over straightaway.
The Solution: ChartMogul provides the full package
Liam and his co-founders were greatly impressed with the speed with which ChartMogul responded to their request and that wasn’t the last time they received help from the support team.
Your salespeople were pretty direct with us from the early rollout. And obviously, they added that feature within two days, which just completely blew us away — we never thought a company would be able to move so quickly to add something in. And they actually worked with us for about a week being available on calls, etc. They pretty much told us everything about metrics and how to use the platform correctly. It was a really, really smooth process.
Liam’s journey began with a Google search for a tool that would solve their challenge with managing churn.
There were other alternatives they explored, but none of them seemed to offer the flexibility — such as connecting multiple Stripe accounts — that they needed.ChartMogul looked a lot more receptive to subscription boxes and a lot more friendly. Click To Tweet
ChartMogul is the go-to tool for managerial decisions
Liam shares that ChartMogul is the first tool he looks at when he checks in the morning.I want to see where our MRR is, I want to see what our churn is, I want to see what our LTV is predicted to be. ChartMogul comes really handy and really powerful for this. Click To Tweet
In addition, the 3 founders have a weekly meeting where they look at the sales and the overall performance of the company.
With customers coming from wildly different channels — affiliate sales, inside sales, their Supply site, a standalone Shopify store — and being signed up on many different plans, it can be challenging to understand the performance of some channels and/or plans.
ChartMogul helps the team to break down their revenue plan by plan and understand how much it costs to bring a new customer in, what’s the payback period of each, and how the lifetime value (LTV) varies across channels.
Armed with this knowledge, the founders can understand which channels are most effective and what’s the best way to spend their marketing budget.
Improving retention with cohort analysis
Liam admits that the time of the month when boxes are sent out is exciting, but it’s also when most of the churn occurs too.
For most people, getting the box in the post is great, but also a reminder that they are paying for this service every month.
That’s why BusterBox sends out a survey to their customers after each batch of boxes goes out. In this survey, they ask about various aspects of the experience — how happy they are with the contents of the box, with the delivery, how they feel about the price/quality ratio, and so on.
Then they look to the cohort analysis chart in ChartMogul to find trends in their data:
We go to the retention chart, and we look at how many customers churned in a given month. And we can say “OK, the churn may have gone up a bit in July, what was in the box?”
ChartMogul and the survey help BusterBox optimize the contents of the box and keep their customers happy.
The Result: ChartMogul helps to get alignment across the team
Last year, the BusterBox put a goal to reach €50,000 in MRR by Christmas.
They set up the goal in ChartMogul and it stayed with them every step of the way.
Now they’re making strides towards their new goal of doubling that.
Focusing on improving retention and LTV
For Liam, the biggest challenge in the subscription box economy is not getting new customers, but identifying those who are going to stay with you.
Once you understand marketing and you get good at direct response marketing — because that’s what a subscription box marketer will be good at — there isn’t really a long sales cycle, there isn’t a lot of heart that goes into purchasing a subscription box. The goal is to reach that customer and get them to sign up for as cheaply as possible.
But that’s where the easy bit ends. Because the decision to sign up is so easy and emotionally-driven, it’s equally easy to lose customers if you’re not targeting the right fit and not doing a good job with your boxes and your customer service.
If you’re not keeping your customers you bring really bad churn, it doesn’t really make a difference how many people you’re signing up because they’ll just leave and you lose money.
This is why the North Star metric that Liam and his co-founders are tracking is customer lifetime value (LTV).
The team uses ChartMogul not just to track their average LTV, but also to understand and optimize their marketing spending based on what customers each channel attracts.
Every time we bring in another affiliate or experiment with a new marketing channel, we create a new segment in ChartMogul and start looking at a few key pieces of data — how many people stay with us from Box 0 to Box 1, etc. This pretty quickly allows us to understand what channels are going to be profitable.
Once we find a channel that looks like a great opportunity, we’d open the floodgates and pour as much of our marketing budget as possible until that channel is saturated.
Final words: You won’t get anywhere without understanding your business
Liam’s final advice is for like-minded entrepreneurs interested in the subscription box economy.If you don’t get serious about understanding your subscription business, you’ll never get anywhere. Click To Tweet
He often speaks to people who run subscription box companies and finds that too many still don’t care about tracking and measuring their revenue metrics.
A lot of these subscription boxes are running absolutely blind. And they actually don’t really value their metrics the way a SaaS founder does. It’s almost as if they think they’re just selling boxes every single month — that’s not the case at all.