Dose #89: Mouth Watering Subscriptions

Matt here with your weekly Subscription Prescription 💊

What can you learn behind the success of other brands? This week we dive into the success of Carnivore Snax; how they started with a product, went to Kickstarter, and have launched a successful subscription and membership program.

This week’s dose is also an interview! You can hear the entire discussion on your favorite podcast platform or on YouTube.

Carnivore Snax caused a little kerfuffle on Twitter recently. Mark Ritz, their CEO and Cofounder, shared some LTV numbers for their subscriptions and membership customers.

https://x.com/ritzfit/status/1716775712206811178

Members are worth 2x LTV compared to subscribers. Subscribers with memberships worth 3x anyone with just a subscription. 🔥

This week’s dose is a dive into what they’ve done and why it’s working. There are many subscription golden rules Mark and his team are following in building this brand.

It All Starts with Costco Membership

Mark worked at Costco years ago. He saw firsthand at the membership desk the difference in value between their two membership tiers (3x). Costco, along with Amazon Prime, is one of the leading examples of how to deliver and capture value from customers.

Costco has two membership tiers. Gold/Business at $60/year, and Executive at $120/year. The biggest difference is that the Executive tier has 2% cash back.

Executive members spend over $3,000 per year on average. Gold members spend $900.

See a pattern? Carnivore Snax knows how to value its best members.

How it All Started

Carnivore Snax started as a dream project for Sylwia Tabor. As a proponent of the carnivore diet, she worked on developing a snack that was both delicious and healthy. Mark built out his own membership platform and dove into email marketing as an expertise. Sylwia and Mark started working together on launching a website, and a partnership was born.

Successful brands aren’t born overnight, and while Facebook Ads can certainly accelerate growth, you need to start somewhere. Sylwia started out building her own audience first. Next came a Kickstarter campaign. They launched successfully there and continued to build up a following of people looking for something different.

Carnivore Snax is 100% about the product. Two ingredients: meat and salt. They lean heavily into their position as meat-eating carnivores and love being a “voice for meat when it’s being wrongfully vilified.” (Mark Ritz)

This positioning makes it easier to connect with their target audience. Makes product page design a bit easier. An extra flair for emails and other communications. They have a voice, a voice that comes from their audience.

Subscriptions versus Memberships

Subscriptions didn’t launch right away at Carnivore Snax. With so much focus on product quality, they fought availability issues early on and didn’t see a point in selling something at a discount that was already selling out.

According to Mark, subscriptions in general have a bit of the ‘set and forget it’ mentality to them. People want to subscribe and not have to worry about them anymore. But with so many options, you have to deliver more value than just a discount.

For Carnivore Snax, they had two interesting aspects of their business: a limited supply of some products and an avid fan base. How do you capture more value when a subscription involves a discount? A special product run of 300 Wagyu beef chips would be bought by 300 random customers.

How do you build something that drives more revenue AND value for your best customers?

Enter memberships, a game-changer for Carnivore Snax.

They put two things behind a paywall. Access to certain (and in limited supply) products and cash back on purchases.

You saw the results above (3x LTV). We can qualify them a bit and ask if memberships are the driving force in higher LTV, or are people who buy a ton the most likely to buy a membership anyway?

That may change how you view the data, but keep this in mind. A membership makes it easy to tag the best customers in your system. Whether it’s causing the higher spend or not, people who have the membership spend more. An easy segment to start with on offers.

Wrapping it All Up

The product comes first. For Mark and the Carnivore Snax, that is the most important thing to get right. Recently, their retention numbers dipped, and after some digging, they identified product quality as the issue.

Audience comes next. As you build a product, it’s important to work with a community of people and get feedback right away, as Sylwia did. Allowed them to build something people would buy, develop a brand mission, and create a fertile field for sales.

Subscriptions came next as an offering for people who wanted to get snacks consistently. The real value driver, however, comes from memberships. Finding a way to put something special behind a paywall while rewarding the most active customers is the way to drive higher LTV and profitability.

That’s something you can sink your teeth into.

That’s it for this week’s dose! Forgive the teeth pun; I couldn’t help myself. Stay tuned for Dose #90 next Tuesday.

- Matt Holman 🩺

The Subscription Doc