B-Side: Case studies and celebrity impact on retention and pricing

00;00;00;02 - 00;00;07;10

Patrick Campbell

So basically, Lindsay Lohan endorsing Provo. Well, is actually a really big deal from profit.

00;00;07;10 - 00;00;26;15

Ben Hillman

Well, recur. It's Protect the Hustle where we explore the truth behind the strategy and tactics of B2B SAS growth to make you an outstanding operator. On today's episode, we're talking about case studies and celebrity impact on retention and pricing. Patrick, take it away.

00;00;26;21 - 00;00;48;08

Patrick Campbell

All right, everybody, welcome back to another episode of Protect the Hustle, The B-sides vaults. You're hearing here is Patrick Campbell, CEO and founder of Prof. Well, a couple of housekeeping items before we jump into some really, really cool data, or at least data that I think is pretty cool. For one, we just crossed $13 billion of subscription and annual revenue on profit.

00;00;48;08 - 00;01;08;29

Patrick Campbell

Well, so our benchmarks are now by far the best and most comprehensive on the market. We're pretty excited about this. So excuse the brag and you can sign up for powerful metrics. It's completely free if you want the most accurate, thorough of subscription financial metrics on the market, go out and check those out. Another little bit of a breaker slash request here.

00;01;09;08 - 00;01;30;12

Patrick Campbell

We're hiring across the board. If you are looking or even think you could be looking or know someone who's looking for a gig, I would love to chat to you or them. We have sales product analyst roles, we have ops roles, we have customer success roles. We have everything across the board. We have openings in Boston, Salt Lake City, Rosario and remote.

00;01;30;23 - 00;01;45;21

Patrick Campbell

I will make sure that you are they have a really good experience and I'm also happy to hook you up with a referral bonus as well as if we hire anybody. And then the final housekeeping item here, I'll be in Boston for a bit pretty soon here. So if you're around and you know, obviously want to safely hang out, let me know.

00;01;45;21 - 00;02;06;23

Patrick Campbell

I'm up for walking around the common coffee, brunch, breakfast, whatever. I'll be in town visiting our headquarters there and giving some some more stuff. So with that, let us jump in. And today we are going to be talking about not only things like case studies, but also influencers and celebrity endorsements and particularly their impact on willingness to pay and retention.

00;02;07;04 - 00;02;25;16

Patrick Campbell

And the reason I'm bringing this up and the reason I wanted to talk about this in particular this week is because you're seeing more and more of this fragmentation happening in the world of media. And because of that fragmentation, you're all of a sudden seeing just this rise even more so of not only influencer marketing, but also more endorsements happening.

00;02;25;18 - 00;02;41;25

Patrick Campbell

And because of that, it's, you know, worthy of asking like, is this actually working? Should it work? And ultimately, if it does work, how much does it work? And so we're going to jump into that. And so it's kind of, you know, maybe set the stage a little bit more here. You know, in a world with seemingly infinite options and also infinite marketing.

00;02;41;25 - 00;03;02;18

Patrick Campbell

Right. To show us all of those options, consumer purchasing behavior has changed pretty dramatically. We've gone from this place of inherently trusting brands by default, you know, After all, why would they lie to us to distrusting brands by default? You know, turns out they lie or at least stretch the truth all the time. Now, the result is that most marketing has shifted to needing to reinforce trust.

00;03;02;27 - 00;03;26;11

Patrick Campbell

And the way we do that is a couple of fold. So for one, we have freemium in free trials, we have money back guarantees, we have plenty of content This whole world of instead of pushing things out to people, we now want to pull them to us and make sure that they can either, you know, try before they buy or at least feel like they've spoken with the brand enough to make sure that they're not making a bad purchase, that they're comfortable making that particular purchase.

00;03;26;11 - 00;03;45;01

Patrick Campbell

And one particular kind of piece of content that's been on the rise has already mentioned has been this world of influencer and celebrity endorsements. And we've seen this a lot in the consumer space, but we're seeing it more and more actually happen in B2B as well. And so as I said before, as media continues to fragment, we end up trusting these individuals over institutions.

00;03;45;01 - 00;04;05;09

Patrick Campbell

In essence, these people become their own institutions no matter how small their following might be. And therefore we want to influence essentially our audience based or prospect based through their influence. And so the big answer is, you know, should you embark on influencer marketing or even celebrity type marketing? And so we're going to walk through this in detail.

00;04;05;09 - 00;04;19;21

Patrick Campbell

There's going to be a lot of data. And of course, if you are listening to this and you don't get access to the email, go to protect the hustle dot com to get all the data we're going to reference a little bit easier to view the data than it is to explain the data over audio, but you can also sign up to get the email in your inbox.

00;04;19;21 - 00;04;38;16

Patrick Campbell

You don't even have to leave your inbox once you get that email every single week. So let's first talk about case studies. These are the original influencers. Now when you make a purchase, you start from a place of dissonance, right? You may want the product. The product may claim to solve what your pain is or give you the value that you seek, but we don't definitively know, right?

00;04;38;16 - 00;04;56;21

Patrick Campbell

So depending on the price, the impact anticipated and the effort required, you may end up, you know, in this world of analysis paralysis where you're never going to make a decision. Right. Another way to think about purchasing behavior is to go back to, you know, your chemistry class or even like your seventh grade science class when you learned about kind of activation energy.

00;04;56;21 - 00;05;14;08

Patrick Campbell

Right? So for some sort of reaction to take place, it needs to get over, you know, the threshold of activation and energy. And if the activation energy is like eight out of ten, you know, there's different things you can add like a catalyst in order to get that activation energy to the point that the actual reaction will take place.

00;05;14;17 - 00;05;41;09

Patrick Campbell

And in kind of a sales sense, these can be things like the tribe before you buy. They can be things like the content or they can be like these influencers or these endorsements, know case studies and social proof can help kind of calm these nerves and all of a sudden make that purchasing decision actually much easier. After all, like if you see a logo of a brand that you think that you're like or a person in a role that similar to yours, you start to trust that you're not going to make a mistake.

00;05;41;09 - 00;06;03;00

Patrick Campbell

In essence, you see yourself in them and they're happy. Therefore, you should be happy too. Now, this is great in theory, but you know, again, what does the data show us? So I put together a study where I measured willingness to pay without any case studies or social proof. And then I asked a similar group of people, basically their willingness to pay based on different levels of social proof for the same types of products.

00;06;03;00 - 00;06;22;24

Patrick Campbell

Now, the result I have for both B2B and in DTC, but basically, here's the summary In the world of B2B logo ribbons or even in DTC, this whole concept of logo ribbons, which would just be like, you know, reviews essentially they're basically table stakes at this point. They don't influence willingness to pay much at all. And in a previous iteration of the study, we ran it a couple of years ago.

00;06;23;05 - 00;06;45;26

Patrick Campbell

These things did boost willingness to pay by roughly about 5%, and now they're essentially at zero. Now, what's also interesting are things like quotes and case studies tend to increase willingness to pay by about 10% or more, which is pretty significant. And if I pull up the data now to kind of talk you through it a little bit, what we did in both DTC and in B2B is we had just a simple testimonial quote.

00;06;45;26 - 00;07;01;16

Patrick Campbell

We had a mini case study which would kind of be a little bit more than a quote, but not quite an entire landing page or a video. And then we had kind of a full case study. And I'm going to talk about the medians, meaning the boost in willingness to pay basically a testimonial, quote, boosted willingness to pay by about 10%.

00;07;01;16 - 00;07;27;03

Patrick Campbell

A mini case study, increased willingness to pay by about 15%, and then a full case study increase by 20 to 25%. So essentially, these types of case studies, again, we're kind of showing we're supporting data here that essentially, if you include these types of things, those viewers, especially those who are particularly influenced by this kind of social proof, are actually willing to pay more, which thereby will also affect your conversion rates as well.

00;07;27;16 - 00;07;50;20

Patrick Campbell

Now, this is also really, really fascinating when we start to look at retention. So what I did here is I looked at a group of users across a bunch of different subscription products, and I measured that if their purchase was influenced by a referral, a case study or any semblance of social proof, I then separated them into two buckets those who were influenced and those who were not influenced and basically measured their retention relative to median retention.

00;07;50;21 - 00;08;10;04

Patrick Campbell

Now, the results basically showed that those who came in via social proof were retained a much higher rate than those who weren't. And not only were they better at retaining than those who weren't, those who were not influenced by social proof actually had worse retention than the overall median. To give you some numbers here, basically, those folks were not influenced by social proof.

00;08;10;13 - 00;08;28;26

Patrick Campbell

They essentially had 5% on a relative basis, less revenue retention. And those who were influenced by social proof essentially had about 10% plus better retention. Now, this output basically threw me for a loop a little bit because you would think that the product would stand alone. After all, if I don't like the product, I'm going to leave, Right?

00;08;29;03 - 00;08;52;14

Patrick Campbell

Even if I came in with some sort of, you know, celebrity endorsement or some sort of case study. Right. Well, initially, like, you know, I basically thought that that concept of the product is so important and the social proof kind of couldn't live in the same universe. But I think what's happening here is that the folks who came in influenced by social proof, end up giving the product more of a chance if they aren't getting value, they think that there's this problem.

00;08;52;14 - 00;09;16;23

Patrick Campbell

Well, you know, Judy, at Notion really liked the product. I should, too. Let's try another month. And on the flip side, those not influenced by social proof end up being more skeptical. And I'm going to need to noodle on this a little bit more. But this kind of explains some of the phenomenon that we typically see, which is, you know, why is everyone loving this product that objectively is worse than this other product, while oftentimes it's because there's a little bit of a critical mass kind of phenomenon that's happening.

00;09;16;24 - 00;09;33;26

Patrick Campbell

And so before we get into the celebrity side, you know, what should we do with this? Well, you need to at least have basic logo ribbons or quotes on your site and in your marketing for your existing customers. You got to invest heavily in case studies that go deep on your products value and the work to align those case studies, the different leads that you have and proffer.

00;09;33;26 - 00;09;58;24

Patrick Campbell

Well, you know, especially in the context of this data, we personally have kicked off a pretty big project around written video and even kind of graphical case studies across our product lines and verticals. And you're going to start seeing more of that from us in the future. But I think the big thing here to kind of think about to put this in a different context is if your product is so similar to the market or even if it's not that similar, if it's not ten X, then it's really hard to find a space right now where you can build a ten X product.

00;09;59;12 - 00;10;18;00

Patrick Campbell

You're just better off basically putting together some sort of, you know, kind of social proof blitz, because ultimately that's why people are going to come to you, because they're going to think that there's some other, you know, fairy dust on your product. Now you have to back that up with your product. But ultimately, if your products are great, you got to make sure that you're bringing in those right type of people.

00;10;18;00 - 00;10;43;01

Patrick Campbell

And there's no better way than bringing in that social proof. Now, another thought that kind of stems from this is to include some of your existing customer marketing. These case studies, meaning, you know, showing these existing case studies to your existing customer base. Now, this didn't really intuitively make sense at first because, you know, they're already customers. But based on this data, I feel like you can create some sort of FOMO that will actually be beneficial to start the right conversations with your customers.

00;10;43;01 - 00;10;59;00

Patrick Campbell

So put another way, you know, sending a case study to someone who maybe isn't as a retained customers, they should be or their engagement isn't as good, kind of reminds them of, Oh, this person's getting this out of the product, maybe I should get this out of the product as well. So let's move on to talk about celebrities for a second.

00;10;59;07 - 00;11;25;00

Patrick Campbell

So this is where things get interesting. Basically, what we want to look at is what happens if I have someone famous or influential or at least famous or influential for the field that I'm in endorse my product. Is this a smart move? You see this a lot of times. In fact, there's companies that their entire strategy is wrapped around essentially, you know, launching brands off the names of celebrities and having some sort of relationship with that particular celebrity.

00;11;25;10 - 00;11;43;04

Patrick Campbell

What does it do? And there's two axes that are interesting here where an influencer or a celebrity can actually influence. One is just the spread of the product, and then the other is obviously in the conversion and the price point, which we'll be looking at from a case study perspective. Now for REACH, there have been many, many articles written on influencer marketing, so I'm not going to spend too much time there.

00;11;43;04 - 00;12;00;22

Patrick Campbell

But this is new to you. The idea on a basic level is that your celebrity or influencer has a larger audience of your target customer than you, so presumably they could spread your product more quickly. This is why when you know my first startup job was a company called Bar that made customizable jewelry, we were always trying to get on Oprah.

00;12;00;22 - 00;12;25;07

Patrick Campbell

And this is also why when you watch a YouTube video, you're getting ads for VPNs or Honey or, you know, Seatgeek when you know, events were happening previously. Now, what's more interesting and what we're going to explore here with some actual data is that celebrity and influencer impact on willingness to pay in retention is much, much more interesting because presumably you have someone more influential than someone similar to you endorsing the product.

00;12;25;20 - 00;12;49;08

Patrick Campbell

So what I mean by that is you have someone you admire or you looked up to on some level that's influencing the product and that therefore is influencing your purchasing decision. So in some cases, that's Ryan Reynolds with Mint Mobile basically saying he owns Mint mobile. Right. And it's amazing. Right? And therefore you should buy it. And then on the other hand, you have someone like Rachel Ray, you know, kind of a famous chef basically saying this is the Rachel Ray line of products.

00;12;49;08 - 00;13;08;11

Patrick Campbell

If you want to cook like me, make sure that, you know, you buy my products, my cookbooks, my cookware, these types of things. Now, to measure this, we ran the willingness to pay study from above that we already kind of talked about, but we use different levels of endorsement. The results are below or I'm going to describe them right now from A, B to B and DDC and go to protect the hustle dot com to actually get the data.

00;13;08;11 - 00;13;27;14

Patrick Campbell

But here's some really interesting takeaways. So even if the celebrity or influencer had nothing to do with the product, it still influence willingness to pay. Put another way, if you have Lindsay Lohan or Ryan Reynolds endorse Provo, well, we would actually see a bump in conversion and willingness to pay. And neither of those endorsements are in the works, just so you know.

00;13;27;14 - 00;14;04;10

Patrick Campbell

But if you know Lindsay Lohan or Ryan Reynolds and they think they'd be willing to endorse a subscription, financial metrics suite of products, let me know. Is that the big thing here is that when the celebrity or endorsement aligned with the product, somehow the willingness to pay shot up. So what I mean by that is, you know, Bobby Flay, for instance, all I can think of or cooking people and actors clearly within this particular post or file here, but when Bobby Flay endorses a cookbook that has more weight than if Bobby Flay was endorsing a car, and then niche influencers have a lot more impact than nonaligned celebrities, even if their audiences aren't that big.

00;14;04;13 - 00;14;27;09

Patrick Campbell

So this is likely because, you know you're going to trust Jason Lemkin saying something about profit. Well, more so than Mike Tyson. So to kind of go through this data and a little bit more detail, basically a celebrity endorsement that's unaligned, you're actually going to typically see in the world of consumer, you're going to see about a 10% boost in willingness to pay an influencer endorsement that's aligned.

00;14;27;09 - 00;14;45;00

Patrick Campbell

You're going to see about a 20% boost in willingness to pay. And then a celebrity endorsement that's aligned. This is like Bobby Flay in his cookbook. You're typically going to see about 23% boost in willingness to pay. And in the world of B2B, it's almost exactly the same celebrity endorsement that's on a line. This is the Lindsay Lohan example about profit.

00;14;45;00 - 00;15;05;20

Patrick Campbell

Well, about 8% influencer endorsement. That's a line this would be like Jason Lemkin, 23% boost in willingness to pay and then celebrity endorsement aligned. This is as if, you know, Ryan Reynolds actually was an owner of Mint Mobile and also created some sort of new technology in the telephony space because he was so smart. That's about 24% here.

00;15;05;20 - 00;15;25;17

Patrick Campbell

So, long story short, the better thing to do is make sure you have someone aligned somehow and also influencers who tend to be a little bit cheaper than an actual celebrity. And there's a line where, you know, influencer crosses into celebrities. So any Kardashian or Jenner that would endorse your product, there probably would be, you know, much, much better, you know, lift.

00;15;25;24 - 00;15;43;21

Patrick Campbell

But if you can't find those and you have somehow an end to a celebrity that's not aligned to your product, go for it. Actually, this kind of brings me back to the Gary Busey ads that Grasshopper did a long time ago, you know, in that whole ad campaign that they did. And if you want to laugh, just look up, you know, YouTube, Gary Busey, grasshopper.

00;15;43;21 - 00;15;59;09

Patrick Campbell

I think they're pretty funny ads. But the basic idea is like basically if you can get a celebrity or influential to endorse your brand, you should, but not before you consider, you know, all the data here because there's some interesting retention data. So I looked at the number of products that had celebrity influencer endorsements, and admittedly it wasn't a ton.

00;15;59;09 - 00;16;20;16

Patrick Campbell

So this is a limited sample set and basically connected to the retention of those particular companies. Essentially, alignment is so, so crucial because those celebrities who are aligned with the product directly had much higher retention. So to give you some data here, basically the celebrity endorsements that were on aligned, the retention tended to be 10% less than the median to those customers who were coming through.

00;16;20;16 - 00;16;47;04

Patrick Campbell

For Lindsay Lohan endorsing profit, well, their retention engagement would be about 10% less, whereas the influencer endorsement that's aligned, Jason Lampkin talking about all that typically had a 15% higher retention. And then celebrity endorsement that was aligned had about typically 13% higher retention. So you're looking at a world where it's always better to be aligned. But there's still some things, especially if you're in the world of DTC, that you might want to use if you're not necessarily caring too much about retention.

00;16;47;04 - 00;17;01;17

Patrick Campbell

And I know everyone says they care about retention, but you know, their activities don't always follow it. So what should you do as a business here? Let's break this down. You know, as media becomes more and more fragmented, I think you absolutely need to work to have an influencer marketing campaign. Even if you're in the world of B2B.

00;17;01;28 - 00;17;19;11

Patrick Campbell

You should realize, though, that it's more than just a spread play. It is about that conversion, it is about that willingness to pay. And as a result, you probably want to make sure that you're pushing your higher priced product through these channels or even do some sort of dynamic pricing on the channel folks that come through on. We're about to do something like this at profit.

00;17;19;11 - 00;17;34;25

Patrick Campbell

Well, it's not quite out yet and I don't want someone else to jump on it, so I'm not going to go deep into it, but I'll do a full write up after we've launched it and have some good data. So just keep in mind that no one is doing this really in B2B and we're hoping to be kind of the one of the first to do this in B2B.

00;17;35;06 - 00;17;57;26

Patrick Campbell

Now with that, there's one other thought that I had this week, and so if you allow me to kind of go off on a tangent here and that really is around Discovery, plus the new kind of streaming service from Discovery, it kind of combines the Food Network, Discovery Channel and a bunch of other fun channels. So where this is starting from is, you know, I was thinking about influencers, I was thinking about their impact kind of on retention and willingness to pay.

00;17;57;26 - 00;18;18;11

Patrick Campbell

And basically I am long on Discovery. Plus I think Discovery Plus is probably going to be I don't think it's going to be Netflix. It's probably not going to be Disney Plus, but it is going to be the winner of that second tier. And I think that what I'm so fascinated by is that discovery plus basically has everything that we just talked about in spades.

00;18;18;26 - 00;18;34;20

Patrick Campbell

What I mean by that is, you know, one thing that we kind of learned and studied about Disney Plus is that while content is everything when it comes to streaming networks, the ID shown with content was even more important. What I mean by that is that franchises like Marvel Star Wars at all are why people signed up in droves.

00;18;34;20 - 00;19;01;05

Patrick Campbell

It's not a critically acclaimed documentary. I might go to network because of a really cool documentary. I might go there because a House of Cards, which was the really big first hit there. But the problem is that documentaries and things like House of Cards, they help, but they're not everything because I'm going to burn out after five seasons of House of Cards, but I'm not necessarily going to turn off ever something like the Food Network and Discovery Plus is the only second wave streaming service that has this phenomenon.

00;19;01;13 - 00;19;20;06

Patrick Campbell

You have Chip and Joanna Gaines, you have Oprah, you have Alton Brown, you have Guy Fieri of Micro and just a long list of others that give discovery plus basically Marvel and Star Wars franchises, but on a reality and home television level. And I think what's really fascinating about this is that it's a long tail. It's not as expensive.

00;19;20;14 - 00;19;51;11

Patrick Campbell

You might not know of any of those people that I just mentioned, probably, you know, Oprah, but I will tell you that there are huge fan bases, not Star Wars level, but very, very large fan bases for every single one of those people or the couple of Chip and Joanna Gaines that I mentioned. And what's really, really fascinating is that that amount of people not only brings in people from a retention perspective, but also boost that willingness to pay and so I looked at willingness to pay basically these celebrities or these influencers, depending on how you want to define celebrity.

00;19;51;20 - 00;20;13;14

Patrick Campbell

And basically it's just up across the board. So, for instance, Guy Fieri boosted willingness to pay for something like Discovery plus by about 10%, Alton Brown 12%, Micro, 12%. Chip and Joanna Gaines about 18%. They were going to form a Magnolia network. And basically Discovery plus, I'm pretty sure came in and was just like, Nope, we're going to basically buy this up and form it into discovery Plus.

00;20;13;27 - 00;20;36;08

Patrick Campbell

And they're seeing a scenario where they're essentially combining everything into one, which is really, really amazing because the content, if you've ever had, you know, Chopped and the Food Network on in a hotel room, you end up watching six episodes because it's so bingeable it's so, so Bingeable and Discovery plus can basically shoot these types of shows until I die.

00;20;36;09 - 00;20;53;19

Patrick Campbell

Like they don't need to have like $10 million per episode and, you know, crazy amount. It's the reality and hope television that basically is the stuff you put on the background or the stuff that you watch while you're checking email and these types of things and your fans like me, you know, we also tend to or are willing to, you know, watch other content and discovery.

00;20;53;19 - 00;21;08;28

Patrick Campbell

Plus I don't know everything on there, but if I'm watching, you know, something from the Food Network, all of a sudden I'm going to go, Oh, this is interesting. Let's watch something else. And the wheel basically returns and you're retained forever. So I think Discovery Plus is going to end up having some of the best retention out there.

00;21;09;09 - 00;21;27;00

Patrick Campbell

And no other streaming service, not a single one besides Disney Plus and Netflix has anything close to what Discovery Plus has. So I'm really, really excited to see this because I don't think like Paramount Plus and like James Corden and, you know, maybe some sports that they're not going be able to have everything, but like Paramount Plus is going to have it.

00;21;27;11 - 00;21;42;16

Patrick Campbell

And so I think you're going to see, you know, the combination of so many niches with Discovery Plus is going to be so powerful so that you to all find that interesting. I think that there's some good takeaways for your business just in terms of like bringing people in. But we can save this for another day. And I think that's enough analysis for the day.

00;21;42;16 - 00;21;57;15

Patrick Campbell

So if you found this useful, would love for you to share it on a social media channel of your choice. If you're in the email, we've got some social share buttons all primed up for you at the bottom of the email, or you can just take the link and basically copy and paste it into wherever you're going. If you got any feedback or thoughts, obviously ship me an email back.

00;21;57;15 - 00;22;06;26

Patrick Campbell

But with that, have a good rest of your week, have a good weekend and we will chat next week. We'll see.

00;22;06;26 - 00;22;47;15

Ben Hillman

Thanks for listening. If you enjoyed this episode, we'd really appreciate it if you left a five star review of this podcast or you equivalent rating wherever you listen or watch. Also make sure you subscribe to and tell your friends about Protect the Hustle, a podcast from Al Roker, the largest, fastest growing media network dedicated to the world of subscriptions.