Episode 33: Personalizing the Customer Experience with Eric Wu of Gainful

Aug 2

In this episode of the Subscriptions: Scaled podcast, Eric Wu, Co-Founder at Gainful joins host Nick Fredrick from Rebar Technology. Nick and Eric talk about his subscription-only personalized nutrition company, which grew out of Eric’s frustration with the sports nutrition industry as he was navigating his way as an athlete in high school and college.

Gainful Beginnings

What Eric found when he began exploring nutritional supplements was an unpleasant environment of body-building-centric choices—dominated by oversized tubs of protein powder featuring photos of enormous, shirtless powerlifters—which was a world that Eric had no interest in being a part of.

He knew there had to be a better way. He created his own nutrition formulas using the cleanest, most natural ingredients he could find online to fulfill his needs for his body type, personal fitness goals, and dietary restrictions, mixing them in his dorm room and storing them in Tupperware containers.

Once he settled on a clean, personalized formula that he knew he could trust, he ran his idea by his friend, Jahaan Ansari. Eric and Jahaan had grown up playing soccer together in high school and both were playing at the collegiate level, Eric competing at Georgetown and Jahaan at Cal Berkeley.

Early Growth

Jahaan convinced Eric that he was on to something big. Being at Berkeley, Jahaan was immersed in the startup world, and he became Eric’s co-founder in Gainful. Their objective was to bring accessible, personalized, trustworthy nutritional supplements to a market that desperately needed to be disrupted.

After graduating from college, Eric and Jahaan took Gainful to Y Combinator in the winter 2018 batch. This led to raising an Angel round and, just a few months later, a seed round of funding with Brand Project, who eventually co-led the company’s Series A funding.

Subscription Only

It was during the early days, around a year and a half after starting, that the Gainful team decided to commit to a subscription-only model. It was not an easy decision and one that took dedication to stand behind, but Eric says it has paid off.

Being a personalized nutrition company, going subscription-only made sense, even though the numbers didn’t necessarily back it up. In order to receive a personalized nutrition program, potential customers take a short quiz that was developed with the Gainful science advisory board. The quiz collects information like height, weight, dietary restrictions, body goals, frequency of exercise, and type of exercise.

The customer is then presented with their own personalized protein powder, personalized hydration formula, and a personalized pre-workout product. All are formulated with the percentages and dosages of ingredients that map back to the answers to the body type and lifestyle questions from the quiz. This becomes the customer’s monthly subscription package.

Being a data-driven company, Eric and his team knew, through A/B testing, that customers who were allowed to order a la carte had a much higher conversion rate than those who were only presented with a subscription offer. But by digging deeper, they discovered that even though customers were more likely to “buy it and try it” once, those who started with a monthly subscription right out of the gate had a much higher retention rate, giving those customers a much higher long term value to the company.

Becoming Part of a Lifestyle

The team at Gainful never wanted the company to be a flash in the pan, or a “miracle 30-day weight loss” solution. Becoming a part of their customers’ lives was vital to the health of the company, and getting the customers to be subscribers was the first step.

They offer every customer one-on-one access to a registered dietician to help cement their personal bond with Gainful. They have found that customers who talk to their dietician are much more likely to understand the product benefits. They are also more likely to eat and exercise properly outside of their Gainful supplements, which helps them reach their health and fitness goals. This creates happy, satisfied customers who stick with their subscriptions.

They set up a robust email and SMS marketing system to capture new customers with their promise of a fully personalized nutrition plan based on individual needs. They also rely on polls, surveys, and informal focus groups to truly listen to their customers so they can remain nimble in supporting subscriber needs.

Embracing Change

One example of how the company made changes after listening to customers was their decision to become more flexible in the cadence of their subscriptions in order to accommodate subscribers´ needs and, in turn, increase each customer’s long-term value.

In the beginning, Gainful insisted on subscribers receiving 30 servings of their personalized protein powder every 30 days without interruption. They believed this was better lifestyle and growth marketing on their part.

Unfortunately, it wasn’t necessarily best for all their customers. The data clearly showed them that customers were canceling their subscriptions because they had too much protein powder on their hands. The Gainful team didn’t take into consideration the different lifestyle changes that happen in real life, like vacations, illness, or just wanting a break from a steady exercise regime.

Based on their findings, they created light, medium, and heavy subscription cadences. They now use predictive analysis of their data to assign people the cadence that makes the most sense for them based on their dietary restrictions, their health goals, and their frequency of exercise. This approach has paid off in customer retention, increasing their subscribers´ lifetime value.

The Future Is in the Customers’ Hands

Eric and his team have a clear roadmap for where the company is going into the future, and most of it is based on their experience of listening to their customers and making sure they are satisfying their needs.

They continue with their surveys and polls, and they have added focus groups with phone calls from Eric himself. This way Eric can ask his customers, who represent a true cross-section of his potential new customers, questions about ways Gainful could improve existing products or develop new ones that would fit into the Gainful customer lifestyle.

This gives the company honest insight for their direction in new product development, because there is no guesswork. They now ask specific questions: “How much would you pay per month? Per serving? What sort of format? Would you like it in a stick pack? Would you like it in a bubble drink? Would you like it in a scoop?” By using this method, it quickly becomes evident which direction the company should turn to make their customers happy.

What does the future hold for Gainful? It could be brick and mortar. It could be expanded marketing including TV advertising. It could be ambassador and loyalty programs. Whatever it is, Eric and his team will launch each new initiative with a rich trove of data to back up each decision.

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