Learn From Henry Davis

Understanding Customers Through Launches

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1 — The metrics

2 — The goals

3 — Potential insights


My name is Henry Davis. I'm founder and CEO of arfa.

Understanding Customers through Product Launches

I think the number one thing with product launches particularly is - and not through your first launch - is to see what your existing customer base is doing.

So you want to understand the buzz around that product, yes, and you get a feel from some of the social listening and some of the impressions and page views and how much traffic and buzz you can drive. Then obviously, straight conversion; how many people are buying it? But underneath those things, the quality of the engagement from your existing customer base speaks to how well you have positioned that product within your brand and and really convinced your existing base that this is something else they should spend money on.

You're asking them to put more money into a brand and buy another thing from you that's different.

On Baseline Metrics for New Products

On day one I'm most interested in traffic, conversion rate, and percentage repeat. Those three things can show me quite a lot about how much that product has landed with the world at large in our existing base, so they're the things that I track. Within 90 days or depending on the product but let's say 90 days, you want to see if people are replenishing because that means you made something they like and they want again.

Again, unit economics are key. Did you launch something where you can get outsized organic and not have to put a lot of money behind? Or did you create enough buzz that your money works really efficiently? So constantly tracking those things and trying to map them against, you know, the baselines that we have throughout the company and things we'd seen on previous launches - that's very important as well.

On Using Promotions Effectively

Promotions are a very interesting and difficult topic for any eCommerce entrepreneur. We have created a channel that is so heavily reliant on promotions because we've trained customers to expect them.

The challenge can be when you start to layer a promotion on promotional on promotion and you are not aware of it. And you can start to create incentives for people to purchase that are not necessarily in keeping with some of the reasons you would like them to purchase, and create false positives for yourself. And again, that will show up in the unit economics eventually, but it can be quite convoluted to track through the funnel where you're capturing people. Would they buy anyway without the discount? Or is the discount the driver? These can be quite hairy questions to answer because you don't want to suddenly have a revenue dip the next month when you take away a promotion that apparently was working.

Making sure you're very disciplined about understanding what promotions you have running, how they interact with each other, where you can A/B test them how they affect conversion on different channels is absolutely vital. This is something that I've certainly gotten wrong in the past, and I know a lot of operators struggle with.

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