This episode features an interview with Orchid Bertelsen. Orchid is the Chief Operating Officer at Common Thread Collective, an eCommerce growth agency. In this episode, Orchid talks about the three ways to grow, developing strategic partners, and how to do it all without losing the soul of the brand.
This episode features an interview with Orchid Bertelsen. Orchid is the Chief Operating Officer at Common Thread Collective, an eCommerce growth agency. In this episode, Orchid talks about the three ways to grow, developing strategic partners, and how to do it all without losing the soul of your brand.
Quotes
*”There's no easier audience to sell to than people who have already bought from you, know that you exist, and like the product. And so if you want to sell more to your existing customer base, you can increase their lifetime value, either through your core offering and doing a subscription service, or you can continue to launch new products that are complementary to whatever you're selling.”
*”There are some products that people just want to experience in person. There is a certain way to expand into the brick and mortar experience while still utilizing and connecting the digital experience to it, whether it's something simple, like your transactions in store being tied to your account online, and you get an email receipt. I think that is the challenge, is that retail space is obviously expensive. A lot of flagship stores in major city centers are loss leaders. That retail footprint isn’t actually generating a lot of revenue per square foot, but it’s just another marketing expense, having a physical manifestation of what the brand is beyond the website.”
*”There was a boom in e-commerce overall during COVID. When you have different partners like Shopify or Sub Stack, you can bring your business idea to life very easily. What happens then is that you have a community that's just really focused on single-channel DTC. And they probably created a solution to solve a personal problem. But at a certain stage of growth, they’re like, ‘Hey, I can no longer sell to people like me with the same exact problem, because I've already reached all of them,’ which is a good problem to have. So over the course of the last two years, you've seen more mature e-commerce businesses try to go omni-channel.”
Time Stamps
*[0:05] The Case of Scaling Up a DTC Brand
*[0:32] Introducing Orchid Bertelsen, COO at Common Thread Collective
*[10:45] Evidence #1: Sales are single-channel
*[17:40] Evidence #2: Hasn’t developed strategic sales partners
*[20:44] Evidence #3: Has already saturated market
*[34:16] Debrief
*[35:28] HGS Pub
Bio
Orchid is the Chief Operating Officer of Common Thread Collective, an agency focused on helping ecommerce brands grow profitably, and entrepreneurs to achieve their dreams.
Prior to joining CTC, Orchid Bertelsen was the Head of Consumer Experience Strategy & Innovation at Nestlé USA, where she evaluates and tests emerging technologies like artificial intelligence, voice assistance, AR/VR. She has a varied portfolio, made up of 40+ brands and includes beloved brands like Coffee-Mate, Toll House and DiGiorno. Nestlé is also a majority stakeholder in Blue Bottle Coffee and owns and operates Starbucks at Home.
She lives in Hayes Valley with her husband and daughter, and loves to travel back to Taiwan, where her family is from.
Thank you to our friends
This podcast is brought to you by HGS. A global leader in optimizing the customer experience lifecycle, digital transformation, and business process management, HGS is helping its clients become more competitive every day. Learn more at hgs.cx.
Links:
Connect with Orchid on LinkedIn
Check out Common Thread Collective
Connect with Lyssa on LinkedIn
Lyssa Myska Allen: Oh hey, come in. We’ve caught case. I got a call from a client I want you to hear.
Client: Hey CX Detectives, I’m wondering if you can help me. I founded a startup that’s been doing well until now. We worked really hard to define our branding, products and target customer from the start, but it seems like we’ve plateau’d. The sales we saw initially are starting to stagnate. I’m worried that if I make changes, I’ll lose the soul of the brand. Can you help me figure out how to keep growing?
Lyssa Myska Allen: Oh, absolutely. And I know exactly who to work with on this case. My co-detective today is not just a startup advisor and investor, but she previously served as the Head of Consumer Experience Strategy and Innovation at Nestle USA. There, she worked with brands like Tollhouse, Haagen-Dazs and Coffee-Mate. That’s right - I’m joined today by Orchid Bertelsen, Chief Operating Officer at Common Thread Collective, an agency dedicated to helping ecommerce brands grow. Orchid and I are teaming up to crack the case of scaling up a DTC brand. Because we are CX Detectives. Real cases, solved. I’m Lyssa Myska Allen, VP and Global Head of Marketing at HGS. Let’s get started.
Lyssa Myska Allen: So thank you so much for joining me on the CX Detectives podcast today. Um, do you want to get started by telling me kind of your interest in CX your background? Um, kind of what you're doing now, that as it relates to customer experience
Orchid Bertelsen: Sure. Absolutely. So I've been at Common Thread Collective for about five months now. But before that I was Head of Consumer Experience Strategy and Innovation at Nestle USA. And CX is a funny term because I think for a long time, people considered it customer service, right. It was directly related to customer service. And I think in the past couple of years, it has certainly expanded to the customer ecosystem. Um, it has expanded to include packaging. Communications, I mean, it's about everything holistically. And so if you imagine like customer experience as an umbrella, to your point, x brand experience, packaging experience, communications experience. It all follows falls under that umbrella. And so if we were to use that definition, then, then my experience with CX really started. Um, I want to say like back in 2008, Um, so I went to school for international affairs, thought I was going to go work for the UN, um, applied to the CIA twice, you know, decided to not continue, um, the process twice because a lot of people who know me will tell you that I'm a terrible liar. Not because I can't keep a straight face, but because I'm just too lazy to keep track of the various things that I've told people. So I always, always, uh, defer to the truth, right?
Lyssa Myska Allen: But this also makes you a perfect co detective. You have your CIA sort of experience, uh, but you're not, you're not lying. You're not a spy. So it's good for us.
Orchid Bertelsen: Well, we don't know that I'm not, but I don't think I would be able to, you know, confirm or deny that. So after I had my first job after school was at a law firm at a corporate law firm. And I was like, oh, this is terrible. I don't want to do this. So I had kind of this like quarter-life crisis. And what's funny about that quarter-life crisis was that I took a job temporarily at Gucci in Tyson's Corner as a sales supervisor. And it was really there that I fell in love with idea of marketing, um, or of total customer experience of which if you ever worked retail, you understand that it's all encompassing, right? And so every day, um, I talked about bags and shoes, which was really fun, to the customers that came in. And every day I conducted effectively multiple mini interviews with these customers. Because if you just wanted a bag to functionally hold things, you probably wouldn't be paying $3,000 for a Gucci bag. and so through these conversations with customers, you really discover what the Gucci as a brand means to them. And what a bag purchase means, right? A lot of times it was a promotion or to celebrate yourself or like a sign of accomplishment and doing, after doing that for a year, I was like, all right, I got to get out of retail because I'm afraid I'll be pigeonholed here which is like, certainly something that someone 25 says, right? Because you don't realize that there's so much career ahead of you. So after that, I worked at a public policy firm, uh, supporting the CEO, as well as the VP of Marketing. So doing a lot of large-scale events, there were a lot of golfing events that we sponsored. So got to go to the masters, got to go to the U.S. Open at congressional, Different examples of large scale events, also being really all about the customer experience, right? You're given probably a 10 by 10 foot square space and you got to bring your branding into it. You've got to make sure that everything that you do in that space evokes the brand and also reinforces it in a positive way to the, the client who's coming. Uh, so after that, you know, worked at, um, worked in consulting, worked at an agency, worked at Nestle and all those things were centered around digital marketing. So I think in hindsight, 2020, my career makes a lot of sense, but in the moment I just kind of gravitated towards the things that were interesting, and that happened to be marketing, communications, really, uh, bringing a brand to life, to whoever the customer was.
Lyssa Myska Allen: That makes total sense. And so then how did you get into an operations role from there? How do we leap into where you are now?
Orchid Bertelsen: That's a great question. So I have this conversation with folks quite a bit on what it means to be a generalist versus a specialist. Uh, and I've been a generalist all my life of being able to do a lot of things moderately well or well enough to pass, but never being a deep subject matter expert in any one area. When I was at Nestle, I started as a digital strategist over the ice cream division. So working as the intermediary between the brand teams and also the agency teams on brands like Haagen-Dazs, Skinny Cow, Dryers, Drumstick, just really, really amazing brands. And then moved into a digital innovation role, uh, where I oversaw the Nestle USA portfolio, which is about 40 brands, a lot of marketing technology, new and emerging technology, like voice assistants at the time. Uh, also built a digital human before I left, and then expanded that role to include, um, all of CX, which meant owned properties. Uh, so CRM, uh, websites, uh, had to make some decisions about, you know, different data platforms that we had. Um, and it just kind of grew over time. And through these experiences, a lot of what you're doing, especially in innovation, which I think most people don't realize is that you're operationalizing the process. Because innovation, a lot of people think that it's sitting on a bunch of bean bag chairs and sticking post-its on the wall, right? Uh, whereas the reality is that you're trying to create a system to run different ideas through consistently and quickly so that you know which ideas have the legs or the greatest opportunity. So a lot of that was already operational in nature. Again, managing websites across 40 brands, managing CRM and loyalty across 40 brands, you know, and also the innovation process. That's all operational. So when I first met, uh, Taylor Holiday, the CEO at CTC, I was also kind of going through a midlife crisis of sorts and it certainly an existential crisis. I turned 40 in July, so we'll call it a midlife crisis as well, where, you know, I am so grateful for the opportunity that I had at Nestle at being at such a great organization. But one of the challenges of being in the world's largest food and beverage manufacturer is that the impact that you have on the business isn't always felt on a day-to-day basis. And when you think about corporate innovation, so I have a lot of empathy for my corporate innovation folks, is that with large companies, they're actually built to withstand disruption. That's a feature, not a bug. So to, in order to have meaningful innovation in those companies, you really are fighting upstream, right? You're swimming, upstream, you're fighting uphill, whatever your business analogy might be. So at the time I had gone through. Well, basically I lost sight of who I was for myself. Um, you know, I had to show up in a variety of ways for my friends, my family, and my colleague, my teams, and I just didn't really, wasn't doing much of anything, uh, for myself and to fulfill myself anymore. And so that hence the existential crisis, especially being in the middle of a pandemic, um, which we still are, which I
Lyssa Myska Allen: think a lot of us had that. Yeah.
Orchid Bertelsen: So, so Taylor came and, you know, we had a conversation, we had known each other through Twitter, which is a great networking tool. I highly recommend it. And he said, um, you know, we kind of talked about my childhood and you know, my dad was an entrepreneur. Um, he had a restaurant in Lawrence, Kansas called Egg Roll King. There's a picture of me and my mom. I'm probably three, folding dumplings in the kitchen. Um, and so I've always kind of gravitated towards startups and entrepreneurs and, you know, fun, things like that. And he was like, Hey, like, you know, our mantra at CTC is to help entrepreneurs achieve their dreams, both inside and outside of the company. So, he gave me a challenge. He said, let me make you an offer better than anything, else you'll get. A, and so, you know, the jump from innovation to operations, I think from the outside is really funny because you probably don't have a lot of people to do that. Um, but I think it's, it's not so much about my last position that got me here. It's more about the culmination of my experiences in my career up to this point.
Lyssa Myska Allen: Yeah, I think that makes total sense. Um, and that's also an amazing segue to jump into our case that, uh, we kind of wanting to cover, which is talking through what it looks like growing past that entrepreneurship startup phase into the kind of company that, that Nestle, you know, is not that every. Even strives to be like that. Okay, so we’ve gotten to know more about Orchid’s credentials. Let’s just say she’s well qualified to help with this case. And before we get into it, let’s take a quick break to hear a word from our sponsor. Hi! Welcome back. I think it’s time to get into the case. I want to hear from our client on what her customer experience has been like up to this point. How has she been marketing to her customers? And how do customers buy from her company? Is it mostly in-person, or on a website or app?
Client: So my company runs ads on social media like Facebook and Instagram, which link to our website. And we do all of our sales through our site. I founded the company around the beginning of the pandemic, and like I said, it was doing great but now we need to look for other revenue streams.
Lyssa Myska Allen: There are lots of ways to do just that. Orchid is helping some of the coolest companies grow, and using operationalization to help them scale. So Orchid, can you go into greater detail on how exactly you’re doing that?
Orchid Bertelsen: I mean, you know, we have probably, I want to say about 120 clients across our roster between our growth team services, which are all encompassing, to our expert services. So like, you know, all the carts services like Facebook buying or, you know, Amazon marketplace, whatever it might be. Um, so our sweet spot, I think historically has been businesses that are doing between $2 and $30 million in annual revenue. Um, we have over time and I think this is kind of the trend of e-commerce industry as well, started to go a little up market. Um, so we do have larger clients. We have clients who, you know, like Igloo for instance, right. we've been with them for, six years and saw a very successful acquisition of them by Dometic. Um, and that's certainly a success story for us. You know, we have a couple of examples across the portfolio, but when we talk about the idea of growth from a single channel D to C good idea on Shopify, to becoming a potentially a multibrand portfolio company. Um, you're kind of seeing this across the board, right? Because there was a boom in e-commerce overall during COVID. And then when you have different partners like Shopify, um, or even like, um, uh, Sub Stack, right? Like just like this technology and the set of tools that allow you to bring your business idea to life very easily. What happens then is that you have a community that's just really focused on single channel, right? Single channel DTC. And they probably created a solution to solve a personal problem. Um, but at a certain stage of growth, uh, you're like, Hey, I can no longer sell to people with like me with the same exact problem, because I've already reached all of them, which is a good to have. So over the course of, I would say the last two years, you've seen more mature e-commerce businesses or D to C businesses try to go omni channel. So there are a couple of ways you can do that, whether it's by selling wholesale and being, you know, listed at retailers and being distributed that way to even opening your own brick and mortar, uh, which is still, you know, theoretically D to C. Um, but now you're introducing an offline aspect to your online experience, which is whole other set of challenges. Uh, so I do think we are at an inflection point where the long tail of e-commerce is probably going away a bit, um, due to inflationary pressures, increasing cost of goods. Um, it's just more expensive now than it was to operate a company. And so you're kind of seeing this middle tier of companies who grew up in D to C, but now are forced to, you know, find growth in other places.
Lyssa Myska Allen: Let's dig into that, the kind of move from e-commerce to brick and mortar stores. And I think there are parallels in other industries as well, where you're looking at you're taking an experience that was wholly online and putting it into real life. Now, whether it's a store or, you know, something else. Um, and especially the things that were virtualized during COVID that are now kind of coming back and people are rethinking how in person interactions help? What, what kind of trends have you seen or how, how has, how has that shaking up the CX space?
Orchid Bertelsen: I think digital purists will say you only need a digital experience, but even when you look at the early pioneers of D to C like Warby Parker, I mean, they were founded, uh, I'm going to guess about 2010, 2011, because I think they came on the scene right when I moved to New York, I'm from DC. And at the time they had no storefront, right? Um, but you could do the home try-ons so you could get five frames, put your credit card information in, you ship it home, you know, all, all that fun stuff. And you even see them like quickly go into brick and mortar because there are some things that just some experiences that just can't be replicated digitally. Now what's interesting is that they went brick and mortar and now they have a really great virtual try-on option within their app. So you start to see, you know, people go from, you know, you go from digital to physical, to digital, all omni-channel, or it can even go from retail to digital and so on. Uh, so I do think there's a precedence for that. Uh, you also see, you know, Away doing the same thing, right? Away entirely digital and then figure it out that there are some, um, products that people just want to experience in person. Uh, so I live in Hayes Valley in San Francisco. And if you go down in our little commercial strip, uh, we joke that is all D to C brands, right? You've got Brooklinen. Uh, you've got Warby Parker. If we've got an Away store, Interior Define, you name it. Um, so there is a certain to a certain way, um, to expand into the brick and mortar experience while still utilizing and connecting, you know, the digital experience to it, whether it's through a Warby Parker or even something simple, like your transactions in store being tied to your account online, and you get an email receipt, which we experience at Sephora. So I think that is the challenge, um, is, you know, retail spaces obviously expensive. Um, I think when I worked, um, I forget which brand I was working on, but this was years ago, like knowing that a lot of flagship stores in major city centers were loss leaders, right? Like that, that retail footprint wasn't actually generating a lot of revenue per square foot, but it was just another like marketing expense, of, you know, having a physical manifestation of what the brand is beyond the website. Um, so I do see, I do think you're seeing that, uh, quite a bit now.
Lyssa Myska Allen: Do you think that's an important part of a brand growing and broadening their reach and kind of maturing as a brand?
Orchid Bertelsen: I think it can be, I think people do want to, it's kind of like customer acquisition too, right? Like if you have like a brick and mortar presence in a high traffic area, you may get a larger swath of people, um, than folks that you can just target on Facebook solely. Uh, but another way to mimic the brick and mortar experience is just wholesale, right? Like even if you are selling to a target, all of a sudden, you know, maybe they're placing an order for, you know, the Northeast, um, or even like a nationwide order. And so instead of you having to spend media dollars to find all those people in a lot of noise, maybe you get a lot of people just, you know, walking through the aisles because I think e-commerce is still only about 13% of total, um, total retail, uh, transactions as of this year. Um, so there's still a lot of opportunity to grow. So I, and I would certainly not sleep on wholesale or brick and mortar just yet.
Client: I’ve definitely thought about opening an actual physical store, so I’m weighing that as an option. But what about partnering with a company that already has the real estate and doing wholesale through them? Is that something you would suggest?
Lyssa Myska Allen: Yeah. And we, we talked about digital purists. I think there's some sort of brand purists as well, who are saying that being in a Target or a JC Penny or whatever is diluting the brand affinity that a DTC brand is built when they're going purely to their consumer. Like, what's your reaction to that?
Orchid Bertelsen: Um, I think it's a bit myopic. I think there's a lot of different ways to do that, right? I think that, you know, depending you don't have to be in every retailer, like I would argue that, you know, your presence and Target is going to be different than your presence in Walmart. And so you can use that retail partnership as a strength. Like if you are an emerging DTC brand and your audience overlaps with target, then I would say that that's a sign of a seal of approval. They can also find it at a Target. I don't know how well this works these days, but you can do a diffusion line, right? Whatever product that you, um, decide to deliver online looks a little different from the retail version of it. I think some brands do it well, some brands don't. Um, because you're also going to come into the idea of channel conflict, right? Is that, you have to, if you want to continue to support your D to C capability, you got to give people an opportunity or a reason why to go to your site while also buying from Target or also buying from Amazon. So your product assortment may look a little different. Retailers also really like retailer exclusives. So they really like, if you let's say you have five skews and you create, you develop one specifically for Target, right? Because again, they want to their customer and, and show that they're special and keep them within the ecosystem without having them shop at another retailer and buy the same product. Because there's, I don't think there's anybody who solely shops from one store, right? You're all, you're always going to shop at multiple stores. So the retailers will also want something that differentiates them from the pack. But I think there's a lot of ways to leverage the retail partnership, um, strategically, uh, without just saying like, Hey, that's going to dilute my brand now. Should Gucci be selling, you know, at, at a Target? Probably not. So, you know, there are always exceptions.
Lyssa Myska Allen: That's not a, it's not a promotion piece when Gucci is at Target? Going back to your original experience.
Orchid Bertelsen: I probably have to do something offline, but do Gucci like went too far on the eighties with licensing. Because licensing is also a great way to generate revenue, but then they started to license too many things without having the quality control and that in and of itself diluted the brand. Um, so again, you know, if you want to be, um, a great brand steward. I mean, I think there's a lot of ways to strategically align with partners that reinforce your brand rather than dilute your brand.
Lyssa Myska Allen: Right. And, and that are committed to sort of delivering a similar customer experience or fit that customer profile like you were saying.
Orchid Bertelsen: Absolutely.
Client: Yeah, so we market to millennials and Gen Z specifically. We have about nine or ten products that are our classic offerings and haven’t really changed since we started the company. Our customers have come to know our products as something they can invest in that will last a long time.
Lyssa Myska Allen: Orchid, I’m going to pass this off to you because I feel like you’ll have a lot to say on this.
Orchid Bertelsen: Yeah, a lot, a lot of thoughts there. My team knows I like to champion the three ways to grow, or the three ways to make money, which is one, sell more to your existing customer. Um, Two, sell more to more customers, or three, cut costs, right? Um, or lower costs. So in, in the spirit of growth, you see, you start to see a lot of those more mature D to C companies not only look at acquisition, but look at retention. Because there's no easier audience to sell to than people who have already bought from you, know that you exist, and like the product. And so there are ways if you want to sell more to your existing customer base by, you know, expanding on their lifetime value, increasing their lifetime value, you can either do that through your core offering and doing a subscription service, or you can continue to launch new products that I think are complimentary to whatever you're selling, right? And so when you buy an espresso machine, you're also buying the pods for however long you're going to have the Nespresso machine. Uh, so that's a good way to, again, increase your LTV and to lock someone into, you know, an existing customer buying more over time. Uh, I think the second opportunity is to sell to more customers. So this comes in a variety of ways. You can either expand your product or product portfolio so that your brand maybe has multiple categories. So let's say you are, um, similar to Outdoor Voices, right? I think when they launched, they had, uh, like some sports bras, some leggings, all women's offerings. And then over time they expanded to have a men's line. Then they decided to have an Outdoor line. And like, you know, I mean, Lulu, Lulu Lemon, I think is the same. Right? So again, you can capture more customers by broadening your portfolio mix. Um, you can also just kind of reposition the brand a bit, I think, to get at new customers. Um, but the hardest part of doing that is to not alienate your old customers, right? Um, and the third opportunity is to cut costs or to lower costs. Um, what you're seeing is that a lot of large companies are really hard finding growth, like harder to find. So they're doing a lot of this through margin expansion. So I think what they're saying is like, oh, well with inflation, we get to raise our prices. Like at least 7%, we're going to make more money that way, or even look at Amazon Prime, right. They raise their prime membership by $4, which I think equaled, like at least a couple billion dollars in incremental revenue. It was either $2 to $4 billion. Um, so that's significant, um, what you can also do, right, a lot of people kind of there's that tension between outsourcing to an agency or in housing. And I think there's pros and cons to both. Or even, you know, just making sure your media is more efficient. So there's, there's all these ways to, you know, cut costs or lower costs and margin expansion. Um, what I will say is like going back to the second avenue of like, Hey, selling more to more customers. I mean, there's also alternate revenue streams. You can launch a service offering in addition to whatever product it is that you're selling. Or you see a lot of people trying to go into, you know, the NFT space, right. Um, to make more money that way, which is like a whole other rabbit hole we can go down.
Lyssa Myska Allen: That is, yeah, that's a deep rabbit hole. Are any of your brands doing NFTs? We don't have to go down this rabbit hole.
Orchid Bertelsen: Um, yeah, Death. Um, so we manage performance marketing for Liquid Death, um, and they just announced, um, a recent NFT drop.
Lyssa Myska Allen: That's awesome. Liquid Death is such an interesting case, because they sold something that like is cheap, free, readily available, and like made this insane brand with like great affinity. Do you have any secrets from them to their success? Like what would you key in on, on what they did?
Orchid Bertelsen: Yeah. I think, you know, Liquid Death has been a brand that I've followed for a very long time. Um, just by nature of like the Nestle portfolio, right? Having Pellegrino and Perrier. Um, I think what's fascinating a lot of times in food and beverage is that it's just commodities wrapped in branding. So to your point, like the idea of selling packaged water or bottled water, even in aluminum, like isn't novel. But, you know, from the outside, with, with Liquid Death, like, you know, how they talk about their brand and how they bring their mission and their values to life is unique. So, you know, they kind of carry that theme of, alright, there's part of it is sustainability. Um, so, you know, you see Liquid Death, like a lot of their messaging is like death to plastics, right? Death to thirst. Um, they also do a great job of honing in on their core audience, um, which was like the straight edge crowd, right? Because if you're at a bar, like a lot of American culture is around, you know, going to bars or getting drinks with friends, the idea of happy hour, right? Um, and if you choose, like, if you're sober, um, then you're carrying it around like a Poland Springs or like a plastic water bottle. So they're like, Hey, like, why can't we make, um, water just as cool as any IPA brand out there? Um, so, so you can feel like you're part of the crowd without having to explain, like why you happen to be sober, right? Like that's, that's a conversation that not everybody is comfortable with having. Um, so I think they knew that really well. Um, and they're just really true to like where they started. Like they're a little off the wall in their messaging and they like to be out there and they like to keep people guessing. I mean, even with their super bowl, super bowl spot most recently, like, you know, generated a lot of buzz. And so I think they've just done a really amazing job of continuing to push the boundaries and truly differentiating themselves among, you know, the rest of the, uh, canned or packaged water category
Lyssa Myska Allen: Yeah. It sounds like they really like hold a north star, that is kind of that disruptor, which I want to circle back to what you said before, which is like, companies are built to withstand disruption. So how do you take a company that like say Liquid Death wanting to go into becoming the next Nestle, right? Like how do they, as a disruptor, grow into something that is then built against themselves.
Orchid Bertelsen: Or like a Red Bull, right. We can use Red Bull as an example.
Lyssa Myska Allen: Yeah. That's a good, yeah, it's a better example.
Orchid Bertelsen: Um, so I mean, rebels really fascinating, um, because they started out as an energy company, right? And now they have music vertical. They, I mean, they sponsor an F1 team. Right. Which is like the number two racing team in the world. Um, they stand for extreme sports. And so I think they're a really great example of starting with like a core target consumer and then just kind of expanding to where that consumer is. And. And diversifying it in the process, right? Um, I don't really drink energy drinks.
Orchid Bertelsen: Um, but with, with Red Bull, like they just kind of leaned into their mantra of like Red Bull gives you wings. And I think it was pretty early on that they have, um, I forget what the name of the competition is, but everybody makes a flying machine and you drive it off a ramp. And so they kind of took this like core brand offering. They're like, what else can we do with it? And you know what I talked to brands about quite a bit is that a lot of times what a brand launches it's all about the product, right? Cause they kind of have to like educate around the product. Cause it's probably like built in white space. It probably like hasn't really existed before. Like the problems existed, but like the solution tends to be novel. And so a lot of the creative and the content ends up being just like a product shot and it feels very catalogued. And over time and I think Red Bull's the same. Cause like red bull gives you wings. They had to explain what the product was and then deliver on that promise. And then over time they kind of zoom out a bit. Right. Um, of all right, well who's holding the product? Okay. What are they doing with the product? Right. And like, where does the product live? And so over time, there's always this aspiration for brands to, um, to shape culture, which I think is like very aspirational. I think most of the time you can probably tap into culture. And I think red bull over time, they tapped into culture. They found those communities with the affinity of like, Hey, I need energy to power me through to do this thing to now they're a global leader in actually shaping culture, right. And so I think, you know, Red Bull has done that over time without broadening their product portfolio mix that much, but just kind of broadening the verticals and the people that they appeal to.
Lyssa Myska Allen: What do you think, like, are there examples of brands that you can think of that have just like massively failed, um, either failed to scale or failed to when they, when they reached for that new audience, just really, you know, messed it up with their original audience?
Orchid Bertelsen: Oh, yeah,
Lyssa Myska Allen: or, or.
Orchid Bertelsen: I was like let me run through this. I think jC Penny. Um, JC Penny. I want to say back still around like 2010, 2011, decided to do that big rebranding. If you remember. And JC penny, you know, historically was always about, um, stacking coupons. It was about like, you know, using promos to drive people in the store. And then seemingly overnight, they launched their new logo with like the American flag in the background. I think they went from JC penny to like JCP and they're like, okay, we're going to do Everyday Low Prices. And theoretically, it sounded good. I think a lot of companies want to get away from the idea of only incentivizing customers to convert when there is a promo in place. They want them to just be, feel comfortable shopping every time, or all the time. And JC penny just didn't anticipate that there a lot of change management that needs to come with, you know, a rebrand.And they had already trained their customers for so long to anticipate the promo, to be able to stack them that in order to get like wildly different behavior out of them, they just didn't want to do that. And so JC penny, I think that like new branding and new, um, philosophy only, was around for less than a year. And they went back to the old model. Um, Gap was also similar, right? I think Gap is story now, but um, years ago they tried to do a rebranding and they're like, oh, well our logo we're going to, they made it look like just any other tech company logos, very strange. And what they actually needed to go back to, was to say, all right, let's actually, um, we're about Americana. We're about basics. Like let's actually go back to the product and redesign the product..
Lyssa Myska Allen: Well, so going back to the notion of change management, which I think is huge and it's huge whenever you're implementing anything new. So we talk about it a lot with automation, um, and, and like anything that you're automating with customer experience in terms of like chat bots, or even like order confirmations and stuff like that. Like how, how are you making sure that you're communicating to not only the customer, but the, the departments internally that are working on things? How do you see collaboration working, um, in kind of those DTC companies that are growing and I've been able to run scrappy startup-y, uh, and kind of be involved in everything, and then as they scale, they've got to learn to do, to operationalize some of what they were doing?
Orchid Bertelsen: Yeah, it's hard. Um, so CTC over the course of the last year went from about 50 employees to 140, um, which we're at now. And we have goals of hitting 200 by the end of this year. Um, and so with a lot of founder led companies, what's funny is that when you look at the processes that they have created over time, it's all built around the founders' brain, Um, it's built around because like a founder did it in a certain way or likes to communicate in a certain way. Um, and that you learn over time when you have more and more people involved, like, there's definitely the need to, um, transition. You still need generalists, but you also need deep specialists. But what that means is that then you still, you, then you start to have a manager, who's managing people who know that topic better than their manager. Um, and when you talk about, I mean like CTC has like a service business is wildly different than like CPGs. Right. But at the same time, what you're trying to do is like to reinforce like a level of service or product that is repeatable and consistent over time. Um, and so what you start to have to do is build systems so that everybody can engage into it rather than just one person shares out the information. Right. Um, because with scale and with onboarding, you know, I think we onboarded what, like four or five people this week, no longer can you just have one person or like Taylor, our CEO in that case, like, you know, have that like one-to-one interaction to say, Hey, I'm going to train you up on all the things like you need to start to use systems to make sure that expectations are known. Um, and so that's usually the hardest part because of control. Right. Um, I had an old manager when I was a new manager said, all right, Well, you're delegating stuff. He's like, are they doing it wrong or is it just not how you would do it? I think about it all the time. Cause I was like, well, how far away from me from not doing it the way I would do it does it make wrong? Right? And so sometimes I kind of like over pivot, I was like, it's fine. And then they're like, it's not fine. I was like, okay, got it.
Orchid Bertelsen: And so that's what processes are trying to mitigate, right? It's to say like, Hey, here are the expectations. Here are the steps. This is what we do. This is the information that's shared to get you to baseline. And then I think the challenge then is to develop processes that have enough flexibility and give within them to, you know, to allow people to add to It to make it better, um, because change is constant. It's the only thing that we can expect and anticipate. And so processes have to be built in a way to say like, all right, we not only account for 80% of the use cases, but do we have enough, you know, um, anticipation of like the flex in the system with the remaining 20%?
Lyssa Myska Allen: Wow, okay we’ve come a long way on this case. I want to lay out some things we’ve learned from talking with Orchid. Let’s debrief.
First, focus on the three ways to grow. Sell more to existing customers, sell to a broader audience, or cut costs. So expand the number of products in your portfolio, explore new categories of product, reposition the brand slightly for a broader audience. Even consider launching a service offering to accompany the physical products.
Second, explore omnichannel. One example would be to open your own brick and mortar store. There are some things customers just want to see in person. Opening a physical storefront does come with a cost, especially in high-trafficked areas, but it will act as marketing and a physical representation of your brand.
Last, look for strategic partners. This could mean selling wholesale and listing with retailers. But if you do, make sure that that partnership is strategically aligned with your brand and won’t dilute it. It’s also a good idea to do retailer exclusives to draw people in store.
Client: Awesome, this is super helpful. Thank you for all the tips to continue to grow. We’ll try expanding on our portfolio first and maybe partnering with retailers as the next step. We’ll see how it goes!
Lyssa Myska Allen: So glad we could help! Let’s head to the HGS Pub to celebrate cracking the case.
Lyssa Myska Allen: Okay. What's your favorite thing that you're drinking right now?
Orchid Bertelsen: Um, I love Spindrift. It's a problem. Spindrift so good. Um,
Lyssa Myska Allen: Have you had the target only flavor, the raspberry limp or strawberry lemonade?
Orchid Bertelsen: No, that sounds delicious.
Lyssa Myska Allen: Only at Target. Hands down the best.
Orchid Bertelsen: Okay. All right. I mean, I think it's probably because I grew up with Clearly Canadian. Clearly Canadian crawled so that Spindrift could run, you know? Um, but lemon is definitely my favorite flavor. And my husband always gets on me because I leave like floaters around, like I'll drink four sips and then forget I have a can out. So I do have to pour it into a glass to remind myself that it exists.
Lyssa Myska Allen: It's a good trick.
Orchid Bertelsen: Okay.
Lyssa Myska Allen: So you're, you're so plugged into DTC. What are some of the brands that you're excited about that are kind of up and coming? Um, whether they're in your portfolio or not?
Orchid Bertelsen: Yeah. Um, you probably break this down by categories. For, for food and Bev. Um, I love Fly by Jing. Um, so they do have like a spicy sauce and they actually just launched frozen dumplings, which I'm excited to try. Um, but if you ever want to be profitable really quickly within food and bev D to C, don't go frozen. I can tell you that from, from personal experience. Um, so I love them. Um, I love Topicals. Um, so Topicals, they, um, Olamide is one of the founders she's amazing. Um, but they basically have like an ointment for like, if you have eczema or acne scarring and it is for like, you know, different types of skin tones, um, it's very inclusive. Um, so love that. And one of their first retail partners was, um, Nordstrom, which was awesome to see for them. Uh, for makeup. This is a client, Kosas. Um, they have clean makeup.
Orchid Bertelsen: I have like the face oil foundation and then I also have their like skin clearing bronzer, I think that's what it is. But love Kosas. Those are probably the big, the key categories I would say.
Lyssa Myska Allen: So then what's your favorite recent purchase?
Orchid Bertelsen: Very recent purchase? Um, this Patagonia zip-up
Lyssa Myska Allen: It's very cute.
Orchid Bertelsen: I mean, Patagonia just does a really phenomenal job of like living their values each and every day. Um, so when we talk about sustainability, I mean, they were one of the first, I think, along with REI to say, Hey, we're not, we're not going to stand for consumerism. Um, We're not gonna be open for Black Friday. Um, and that I think Patagonia was one of the first to launch a second hand, like a certified secondhand marketplace. Um, so worn wear for them, uh, the experience is phenomenal. You can bring your old Patagonia into the store. They'll give you a store credit and they'll go ahead and list it. I've I've bought stuff for my daughter, um, who turns five in May, So I think, I think they do a phenomenal job, so I'm very happy with this half step. It's hard though, because it's like, um, you know, you don't want to fall in, I live in San Francisco and it's like the Patagucci stereotype, but it's good stuff. You know,
Lyssa Myska Allen: It is. Um, okay. Well this has been awesome.
Lyssa Myska Allen: Thank you so
Orchid Bertelsen: Yeah, of course it was super fun. It was so nice to meet you.
Lyssa Myska Allen: Thank you for listening to CX Detectives, brought to you by HGS. If you liked what you heard today, tell a friend, a colleague, the person who you thought waved at you but was actually waving at someone behind you and you realized it too late so you gave them a confused wave back. Tell them too. And don’t forget to rate, review, and subscribe on Apple Podcasts or wherever you listen. Next time there’s a CX case to be solved, we’ll be there!