By Vineet Mehra, Chief Growth and Customer Experience Officer, Good Eggs

Scaling growth. It’s top of mind for all successful entrepreneurs as they move from product market fit to commercialization. Whether you sell directly to consumers or to other businesses, a strong and repetitive process that enables an entire organization to collectively work together to achieve growth is a hallmark of any scaled business. When I started as Chief Growth and Customer Experience Officer at Good Eggs in February of this year, the company was at a very unique point in its growth trajectory. In March of 2020, online grocery made up only 20% of food purchases in the San Francisco Bay Area. By April, it grew to 51% of market share. Covid transformed the way businesses and consumers interact and the expectations consumers have for brands and businesses, as well as how they engage with them.

Thankfully, Good Eggs has spent the last few years building a foundation in preparation for this moment. I feel honored to be joining them at a time when there is such great product market fit and opportunity. Recently, I shared an overview of the growth engine that we are pursuing at Good Eggs with the S2G Ventures Portfolio Community. We break it down into six steps that we feel are crucial for building a scalable, data-driven growth engine and developing dynamic and effective teams, processes, technology and reporting designed to achieve growth objectives.

1. Build the Financial Foundation for Growth

The first pillar of any growth engine is understanding what your company is optimizing for from a financial perspective. There’s nothing worse than raising outside capital and spending it without understanding what you are getting in return. Establishing the financial metrics to track how your company will achieve its milestones is critical. For any business that has recurring customers, whether B2B or B2C, this goes beyond analyzing topline revenue growth. A strong financial foundation means understanding the unit economics of a business - the recurring profitability of a single customer over time and the cost to acquire that customer. In practice, this is often summarized as the Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio which is illustrated below.

The LTV to CAC ratio is particularly useful because, if employed correctly, it forces a business to think about many underlying drivers that gauge the efficiency and health of the business. Lifetime Value factors in:

• Customer retention - this impacts how long your customer sticks around. Can you take a 1, 2 or 3+ year view? If there are only 10-15% of customers remaining in a cohort after 12 months, it would be hard to argue a customer sticks around for more than 18 months. Understanding customer retention is the first step in better lifecycle marketing. It is almost always cheaper to reactive customers you once had than to acquire new ones.

• Contribution margin per order - the “value” in LTV should be a measure of profitability, not just revenue. What are you truly making from your customer once you have accounted for all the variable costs to deliver your product or service to them?

Truly understanding your cost to acquire a customer also takes some work:

• Funnel by channel or account - where is your customer finding you? How are they engaging with you? How are you converting them?

• Organic or paid - are sales being driven by word of mouth referrals, the sales team, or online ad spending? While paid channels are important, no business has scaled without having developed strong organic channels.

Once you understand these drivers on a customer level basis, you can then organize that data into cohorts (groups of customers acquired by week, month, quarter, etc. tracked over time) to understand how cohorts are performing and improving. If you can credibly demonstrate a 3x+ LTV to CAC ratio, you’ll have a great story for investors.

2. Align Growth Priorities, KPIs and Release Calendar

The second step is to define the growth framework that works for your company. You need to identify the few key metrics that really matter (often related to the LTV to CAC ratio described above) and that the executive team rallies around, along with a release calendar, or an initiative pipeline, that starts to drive those growth building initiatives.

For Good Eggs, the key priorities were:

• Discovery, Awareness & Choice - How can we increase demand and be really clear on your brand differentiation?

• Shopping Experience - When customers land on your digital, physical or omni-channel experience can they find what they’re looking for?

• Moment of Purchase - Do they return? This is where LTV happens and the post-purchase experience is critical.

• Loyalty and Proliferation - Are current customers bringing on new customers? Subscription, memberships and sharing features come into play to begin re-looping customers into the moment of purchase.

As discussed in step 1, determining the metrics you want to use to capture growth is next. For example, monthly active customers is a great metric for high frequency businesses because it captures new customers as well as traffic from returning customers and frequency all in one place. Finally, once you have your growth priorities and metrics you can build a release calendar to determine the three or four actions you are taking for each one of these priorities that will drive key metrics.

3. Define the Talent and Organizational Strategy

The one thing you can't do, especially for a smaller company, is economize too much on talent. Growth is a team sport and you need to hire some world-class talent when you are ready to scale. You need to have specialists in everything from brand strategy and design to corporate communications, customer care and advocacy, and growth automation and technology to name a few. It is also important to hire talent who have worked at the next level of scale you are hoping to reach.

Another decision we made at Good Eggs was to align engineering and tech so that they are both geared towards growth. We now have dedicated engineers and data scientists focused on acquisition and conversion, lifecycle and retention, customer tech and tools, and our e-commerce and shopping experience.

The war for talent is real - you've got to find the best individuals you can. But if your mission resonates with people it can be a huge draw in the industry.

4. Ensure a Clear Brand Point of Difference

The food system transformation is receiving a windfall of interest and investment over the next decade. In crowded categories, the battle for attention will be won by brands with a clear and differentiated value proposition. That point of difference for your business - that no one can replicate - needs to be absolutely clear as you prepare for growth. Look at your brand design, expression, colors, selling point, the way you communicate, etc. As challenger brands, we have to have a unique point of view in the world. We must take an active, championing, almost warrior role in a category. You can’t just rely on Google and Facebook to scale a business. At some point, you need to have that category defining point of view. Once that is established, then you can capture that demand through some of those direct response channels.

5. Launch Growth Experiments That Can Scale

There’s incredible technology out there today, whether you’re a B2B or B2C company, that enables you to geofence or cluster experiments into very controllable outcomes. But anyone who tells you they'll spend money and get it right the first time is probably not telling you the truth. Growth requires having 20, 30, 40 experiments running all the time. Don’t end experiments prematurely because you need to understand what they will look like at scale. Results start to diminish at scale. Many of your experiments will fail, a few of them will work. You have to know when to cut them off and when to double down. The key is having an experiment framework that allows you to do that in a really powerful way.

6. Invest in a Growth Technology and Data Platform

Growth at scale requires a tech and data platform and tools that allow you to automate growth. It's one thing to use humans to drive the growth engine, but at some point that becomes a bottleneck. You've got to have the underlying tech and infrastructure to scale if you want to avoid bringing on more consultants every time you move to the next phase. As growth leaders, we all need to be technologists and extremely capable in utilizing data. I think this sometimes gets underinvested in. Understand where you have tools that are working well, where you have gaps, and where you need to replace the tool or enhance how you can get more value from the tools you have.

At the end of the day it’s about the customer. The customer doesn't care if you use a Content Management System, Customer Data Platform or a Product Information Management system, your customer cares about the benefit to them.

Pivot the conversation to the benefits to the customer. The tech is the support that gets you there.

At Good Eggs we’re employing this growth framework to grow purposefully and sustainably with the right talent and tech all while remaining grounded in our mission. I hope you find this framework useful as you think about scaling your B2B or B2C company.

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Guest Author

Vineet Mehra

Chief Growth and Customer Experience Officer, Good Eggs

Vineet Mehra is a global business leader, having lived in and led diverse teams across North America, Europe, Asia, and South America. His career spans multiple industries, including consumer technology, consumer healthcare, retail, beauty care, and grocery, while leading marketing for several multi-billion dollar organizations. Vineet is responsible for driving Goods Eggs’ ambitious growth plans as the brand looks to further solidify its already strong presence beyond the Bay Area. Prior to Good Eggs, Vineet was Global Chief Marketing and Customer Officer at Fortune 20, Dow-Listed Walgreens Boots Alliance, the world’s largest and first global pharmacy-led health, retail, and well-being enterprise, and Executive Vice President and Global Chief Marketing & Revenue Officer for Ancestry, where he was tasked with modernizing its brand marketing efforts and launching the consumer genetics category into the cultural mainstream. Vineet was most recently recognized by Forbes as one of the world’s 50 most influential CMOs, one of Ad Week’s Top 20 Tech CMOs, and he serves as the Chairman of the Board of Directors for Effie Worldwide, Board Advisor for Knotch, as well as on the CMO advisory boards of Spotify and WPP.