Recess is a darling of the modern DTC boom. Within months of launching, they were seemingly omnipresent in every media outlet across the digital commerce ecosystem.
We sat down with Will Holtz, Head of eCommerce at Recess, to understand how the brand uses Tydo to leverage cohort data and advanced analytics in its quest for rapid growth.
Before onboarding with Tydo, Recess built internal templates using Excel. However, their data sets quickly outgrew the templates’ existing functionality.
While Excel models proved to be useful for a time, they weren’t an ideal structure designed for scale. More importantly, the Recess team needed to find an automated tool that was routinely accurate when it came to extracting the right data across Shopify and their ad accounts.
In the process of switching to Tydo, Recess was on the hunt for a tool to help them make in-time marketing decisions based on their data and trends over time. They needed to quickly define the most relevant data points and prioritize metrics that drove meaningful growth outcomes.
Once Recess onboarded with Tydo, they gained the ability to double down on cohorts. As they dove deep into cohort data, the team leveraged this query framework to inform decisions:
Once a consistent trend around cohort data becomes apparent based on these queries, the Recess team will regroup internally, identify potential impacting factors, and double down on the leverage points that have the potential to deliver outsized retention improvements.
Data helps teams cut through the noise and identify opportunities for investments in long-term operating profitability. Case in point, spending money on unprofitable acquisition and retention is a poor strategy from a capital burn and fiscal responsibility perspective.
At Recess, cohort analysis leveraging trend data was the natural place to invest time, energy, and resources in. Using Tydo, the team was able to identify variable trends over distinct time periods and take action to adjust acquisition and retention strategies accordingly.
At the core of retention is the notion that it’s cheaper to retain or reacquire a customer that’s already purchased from you versus acquiring a new customer for the first time. In turn, cohort data directly informs what your CAC and payback periods will be over a set period of time.
Before leveraging cohort data, a majority of the team’s decisions were typically targeted towards acquiring more customers, rather than intentionally listening to what customers were seeking.
Now, when a specific cohort is flagged from a dropoff or churn perspective, the Recess team leans into this query framework to adjust their strategy accordingly.
Once the Recess team went deep on cohort analysis, they quickly realized that people would really appreciate a deeper discount to keep purchasing Recess on a regular basis. To address this insight, the team launched a subscription offering with a deeper discount. After focusing on this initiative, subscription now makes up 50% of the company’s overall revenue.
After realizing the need to double down on cohort analysis, Recess moved swiftly to improve retention by actively seeking out customer feedback and introducing user testing initiatives.
As they began to survey customers, specifically diving into the rationale behind user drop-off within a specific cohort, the team quickly unearthed novel insights. At the time, the two factors driving customer churn were price and convenience. After making adjustments to the variables in play, cohort behavior started to trend in a positive direction with consistently high retention on a month over month basis.
On both fronts, including the introduction of new subscription pricing options, the Recess team took the insights gathered from cohort data using Tydo, and brought the results to relevant internal teams to take action and remedy the issues at hand.
As a result of these interventions, cohort trends indicated that customers stuck around longer and spent more with Recess over a longer time period, yielding an uptick in LTV. In turn, the marketing and growth teams got the greenlight to acquire customers more aggressively.
At Recess, it’s critical that they pull cross-functional teams together when it comes to taking action on new marketing and growth initiatives based on cohort behavior analyzed using Tydo.
While internal cross-team alignment is useful for any DTC company, it’s particularly important at Recess due to the nature of their brand. Put simply, when customers buy a product, they talk about it across social channels, yielding a higher posting rate than most brands. The embedded virality in the product yields knock on effects that show up in heightened organic traffic.
To ensure that this word of mouth virality is accounted for, Recess relies heavily on blended analytics from Tydo to inform growth decisions. More specifically, they rigorously track blended CAC, meaning that they account for total traffic driven by both organic and paid sources.
In the process of making decisions based on blended cohort data, the Recess team prioritizes the inclusion of qualitative insights from customer experience when it comes to allocating paid spend. For example, if payback period models aren’t forecasting positive returns, they may need to find customers in a different way. As a result, they’ll pull back from Facebook and Google and lean more heavily into affiliate programs and organic press mentions to drive word of mouth.
At the end of the day, understanding the tradeoffs between organic and paid sources is absolutely critical for the team’s ability to consistently hit growth targets at Recess.
At Recess, leveraging the data analytics through Tydo has been a crucial component in aligning incentives with two external stakeholders: agency partners and investors in the company.
The majority of DTC growth agencies running paid media accounts will take a percentage of ad spend. For the most part, this pricing model yields fundamental misalignment when it comes to incentive structures. In this case, agencies are incentivized to spend as much money as they can and grow revenue at all costs, instead of growing the business profitably and sustainably.
Instead of leaning into this model, Recess charted their own model. The brand’s e-comm team, led by Will, negotiated a pricing structure where their agency partner takes a percentage based on their performance versus ad spend directly. In turn, both parties were correctly aligned.
In addition, Recess leveraged Tydo to ensure that they had an increased level of context into the performance metrics themselves. While there are a lot of metrics thrown around in the agency world, even the best marketers can have trouble correlating those metrics to business growth.
Tydo’s dashboard tool enabled granular quantitative insight into the ongoing growth metrics from the agency side of the table, ensuring even higher degrees of alignment across the board.
When it comes to working alongside investors, driving the conversation from a quantitative, metric-driven perspective smoothes the process of aligning incentives. As it relates to the broader e-comm landscape, a large majority of brands pursue growth at all costs and realize too late that their economics are unsustainable for continued hyper-growth.
By leveraging Tydo’s data around retention and acquisition efforts, Recess was able to fluidly position new marketing efforts from the vantage point of profitable growth trajectories. In turn, they were able to ensure improved investor alignment across novel growth initiatives.
