Conquering the Pet Food Market as a D2C Brand
In our webinar with Alphapet Ventures, we spoke with a Direct-2-Consumer (D2C) brand that serves as an example for good customer centricity – and has successfully established itself as a premium vendor in the market with its own brands.
AlphaPet Ventures combines the business areas of e-commerce, digital brand building, cross-channel sales, and digital services related to pets in one hand. The company sells premium pet food and accessories via its own e-commerce platforms. The focus is not only on efficient online sales but also on the digital brand development of high-quality brands and products. In the market, the company has asserted itself with a profound customer focus against strong, established competitors and convinced a demanding target group.
In the webinar, Dr. Markus Wübben, Co-Founder and CDO of CrossEngage and passionate CRMer at heart, and Jochen Missel from Alphapet talked to each other about exactly this digitization strategy. Jochen is a fresh dog owner – and has been leading the fortunes of AlphaPet Ventures as Co-CEO and the subsidiaries Pets Premium and ePetWorld as Managing Director for over three years.
Digitalization meets Alphapet
The original question for the interview was: How can customer data be collected, cleanly organized, and then optimally used at D2C companies? So how do I create a unified data source to make relevant products available to the right customer groups and segments? How do I then use this data on the digital channels? And how do I turn it into perceptible brands with long-term satisfied customers? How has Alphapet managed to successfully navigate the path of digitalization and customer-centricity?
For Alphapet, digitalization doesn’t just mean e-commerce and setting up a website; according to Jochen, it’s much more about creating transparency in all processes along the entire value chain – from purchasing to after-sales service. That may sound simple, but it’s a daunting challenge that Jochen and his company have to overcome.
For example, they can now track in real-time how much revenue was generated through which channel during which period. This allows for ad hoc analysis at any time and the ability to act immediately if needed – and not wait until the end of the month when reporting is completed.
How Does Alphapet Measure Its Success?
Jochen also addressed the KPI’s that are most significant to Alphapet. First and foremost is the retention rate. It tells how many customers make a repeat purchase. The higher the retention rate, the more regular active customers there are in the overall customer base. Jochen also adds that in the pet food business, the retention rate multiplied by the contribution margin in a given period gives the future customer lifetime value (CLV) of a customer for that period. Why? Customers who own a pet need to buy food for their faithful companions on a regular basis. If they don’t do it at Alphapet, they’ll do it somewhere else. The recurring purchases (as in subscription business models) strongly characterize the business.
“Mathematically, the step from first to second purchase is by far the biggest lever in our business model.”
– Jochen Missel, Co-CEO, Alphapet Ventures
Want to learn more? How is customer segmentation done at Alphapet? According to which criteria? How does the company deal with rising acquisition costs for new customers? How does it deal with customers who were not satisfied?
Learn more in the webinar recording: