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Retention Teardown: MeUndies $75 Million Strategy

by Kristen LaFrance
March 11, 2020

When I was a kid, I never would have imagined that my dream job would entail writing about undies, but here we are. And boy am I excited to dig into this one.

As we should all know by now, retention is the name of the game for successful ecommerce stores. Whether you’re running a subscription program or selling single purchase products, the brands finding success are working their butts off to bring customers back again and again.

To build deep, meaningful customer relationships that stand the test of time, and extend customer lifecycles as far as they can.

It’s a game of retention, and MeUndies is winning. $75 Million winning.

Today, we’re going to assess MeUndies’ framework for retention to uncover how they continue to succeed in today’s subscription economy.

We’ll look at 6 key areas: Products, community-building, vision and values, flexibility, email engagement, and exclusivity. Let’s see how MeUndies stacks up (spoiler alert, it’s all good), and what you can learn from this subscription mastermind.

 

When did Undies become Fundies?

Launched in 2011, MeUndies had a unique approach to the marketplace and started as a subscription service. This subscription allowed them to deliver a unique experience to their customers that blended surprise, convenience, and quality all in one.

Now, MeUndies also offers a la carte items such as lounge pants, socks, dog bandana, and more to serve a different kind of customer. Although their subscription still accounts for roughly 50% of their revenue.

According to Jonathan Shokrian, Founder of Meundies, the company has now sold over 10 million pairs of underwear and is projecting to end 2019 with at least $75 million in annual revenue.

That’s some serious success. And so much of it is based on MeUndies’ ability to not only acquire customers, but create long-standing relationships with them.

From their high-level vision all the way down to technical bits of the experience, MeUndies has retention and community in mind. So let’s check out their retention playbook.

 

1. Exceptional Product Experiences

I’ll cut straight to it: MeUndies products are super high quality (I own both the socks and undies), fun, and hold up to the price point.

What’s unique about MeUndies product is its ability to evolve with current trends. Because they consistently release new prints, they can stay relevant to what’s happening within the lives of their customers (hello, retention gold).

As their customers lives and interests evolve, MeUndies can evolve with them, too. Providing timely and unexpected experiences with the brand.

For example, leading up to the 8th and final season of Game of Thrones, MeUndies cleverly released their Dragon print.

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This evolving product also acts consistent customer data to fuel future releases. MeUndies can follow trends on what customers really want, what they get excited about, and what they are most likely to purchase, increasing not only LTV, but even AOV as well.

And, it allows the brand to take a passionate stance on cultural movements. Like they’re recent pride campaign with Griz:

Now onto the delivery experience. No matter what products you are shipping, there needs to be some “unboxing” feeling to it.

Remember: If people were just looking for a 5 pack of any underwear, they’re going to order from Amazon. Products in a box.

But if they’re coming to MeUndies, they’re looking for something more. And MeUndies does a great job of doing this (and has lots of room to play with new ideas).

The packaging is bright, fun, super on-brand, ever-changing,and gives you that “Ah! My package came!” feeling right away.

(Plus, it can spark some pretty good convos with your mailman. I speak from experience.)

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Image Source

Great products (with great feedback loops) + exciting delivery experiences are major contributors MeUndies success with retention.

For deeper insights on unboxing, I highly recommend checking out Lumi’s Youtube channel.

 

2. Commitment to Community

It’s 2019. By now, I can just about guarantee that every single person who reads this post has bought something online. Online shopping is no longer new and noteworthy, which means digitally native brands have to bring more to the table.

Essentially, you have to become larger than the products you sell or the convenience of your site.

You need to become larger than life.

MeUndies built an entire community not only around their products, but their mission as well (see above). This community is where Meundies’ success truly derives from.

For Example, the MeUndies instagram has 345k foollowers and the hashtag #meundies has been used 22,000 times.

That’s twenty-two thousand happy customers providing MeUndies with organic, free marketing. And we all know how powerful word of mouth is.

MeUndies has worked very hard to build this community, and they prove their dedication to it again and again on Instagram.

From sharing real, honest pictures and stories from their fans….

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To celebrate the people who are truly living out their mission….

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To this… MeUndies Founder directly defending his community, vision, and values where his customers are engaging.

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On top of all of that, they are providing their community with valuable ways to keep the brand front and center in their lives.

Here’s my favorite little trick: Each new underwear pattern they release is also released as a phone wallpaper. They’re adorable, they allow fans to bring the style and brand into their most treasured space (smartphones), and provide organic reach to new customers as well.

Also, this is super simple for the MeUndies team, but provides a deep level of value and dedication to the customer.

At the end of the day, yes, this is all still commerce. MeUndies is trying to make more sales.

But it’s become commerce that doesn’t feel transactional. It’s relational.

The community aspect of MeUndies continually drives sales, repeat purchases, subscription activations, extended LTVs… but most importantly, it continues to drive a deeper connection with their customers.

Meaning, when their customers’ lives change, MeUndies doesn’t need to go searching for a new customer base. They can simply change with them.

 

3. Dedication to Vision & Values

I’m constantly doing brand teardowns, and the thing that truly makes brands stand out is often their dedication to vision and values.

Customers want to share values with the brands they buy from. They want meaningful, deeper stories behind the products they buy.

MeUndies may just be one of the great pioneers in this brand shift. MeUndies saw a hole, not just in the market, but in the experience of buying underwear and honed in on that.

Their mission? “To inspire confidence and individuality through fun and comfortable underwear, because when you feel good, anything is possible. It’s almost about redefining what sexy means.” –Bryan Lalezarian, CEO of MeUndies

This mission is one that resonates with millions of people all around the world. That larger vision is ultimately what makes MeUndies way more than a company selling fun underpants online.

Consumers flock to MeUndies to feel something bigger than a new pair of undies. They come for the community, the support, the validation.

They come because MeUndies promises to really see you exactly how you are.

You don’t need to live up to a beauty standard to fit into the style (see: Victoria’s secret) or have unnaturally chiseled abs to be comfortable in your briefs (see: Calving Klein).

“We just want people to aspire to be exactly who they are.”

So the mission is incredible, but the dedication to it is where MeUndies really thrives.

From emails like this from Shokiran himself….

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To ads truly honoring their values…

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To genuine reinforcements of that vision….

MeUndies hits on this mission again and again with their customers. And because they do this, the brand connections become deeper and the brand loyalty skyrockets.

Why would you leave a company that not only provides a necessary item, but makes it fun, encouraging, and inviting as well?

 

4. Subscription Flexibility

Customer experience is something I harp on again and again when talking with eCommerce companies.

When you’re selling products on subscription, allowing that subscription to ebb and flow with your customers’ lives is absolutely imperative.

Skips and delays may sound like a game of chance, but data shows people who skip have a 60% likelihood of processing on the next renewal, about 30% will skip again, and only about 10% will end up cancelling.

 

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MeUndies customers can quickly sign in, change sizes or colors, add or delete items, and even skip or cancel memberships all together.

This makes it so easy to remain a customer on the membership. My only suggestion to the MeUndies team would be to make the skip a month option easier to find/access for the customer.

Remember, it’s all about keeping the subscription active, even if that means allowing for it to pause and skip.

Use a tool like GetARPU to make this extraordinarily easy for your customers.

 

5. Engagement in the Inbox

Every single time a customer comes in contact with your brand you should be delivering a great experience. Which means you have to look at the entire experience, from the broad overview down to specific customer communications.

For MeUndies sake, we’re going to be looking at some specific email touchpoints that MeUndies is rocking.

1 – The welcome email

From the get-go, you want to set up the customer experience to be wonderful. The welcome email is the very first email your new customer gets.

In MeUndies case, it’s a welcome to the membership.

MeUndies kills it here with a cute opening note, clear branding, great imagery, and everything the customer needs to know about the recent order and the upcoming subscription. 

It addresses every concern, question, or insecurity all wrapped up in one beautifully delivered message.

 

2 – Dunning emails

Failed payment recovery campaigns is where most eCommerce brands really fall short in the customer experience (even Chewy isn’t that great at it).

But it’s a pretty dangerous place to neglect the customer experience. If you don’t believe me, believe MeUndies. They’ve clearly invested in these campaigns. 


Remember that keeping the subscription active is your #1 priority, so don’t risk a passive cancellation simply due to untrustworthy, off-brand emails with poor customer experience.

Take a look at this dunning email from MeUndies:

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This email is clearly coming from MeUndies (based on branding, template, and tone) so the customer knows this is a valid request. 

It keeps things lighthearted, directs the customer exactly where they need to go, and keeps the brand experience positive. 

These emails can be really tricky to master. Here are some dunning best practices. See how your emails stack up, there’s no reason to risk churn at this volatile customer moment.

 

3 – Customer Feedback:

This is another area I see many eCommerce and DTC companies falling short: gathering authentic customer feedback (and doing something with it).

We’ll dig into this more in the next section, but this email shows the customer how dedicated MeUndies is to truly providing an experience and product that their customers love (and want to continue to buy). 

ecommerce-retention_MeUndies Feedback

Bonus: MeUndies actually does use this feedback to inform future product launches, campaigns, and engagement strategies. *chef’s kiss*

Email is one of the best ways to consistently engage and retain your customers. Here’s a list of 9 more retention emails and examples from top companies (and of course MeUndies made this list).

 

6. The Exclusivity Factor

I saved this one for last because it’s one of the best retention tactics MeUndies has pulled out of their hat in the last few years.

Although they began simply as a monthly underwear subscription, they have since turned that subscription into a membership program. Hear why directly from TJ Stein, VP of Customer Experience at MeUndies.

Now when a customer opts in for the subscription, they are actually opting into so much more than a monthly delivery. With the membership model, subscription customers get a new level of exclusivity and value from MeUndies.

In exchange for signing up for monthly orders, MeUndies members pay a cheaper price for their underwear (for women, $14 a pair as opposed to $18), get first access to new products (also at a discount), and access exclusive prints just for members (released monthly).

Even more than that? They add a real emotional and aspirational pull to the membership.

The way I see it, MeUndies customers are drawn to the membership for a few reasons:

1 – To save money!

It simply makes sense financially. Why pay $18 on underwear when it could cost $14? If I don’t like them, I’ll cancel.

2 – To feel special.

We all want to feel like VIPs. This is what a membership hones in on. MeUndies prints are exclusive and highly sought after. If you’re a member, you’re first in line.

It’d be like breezing past an entire line outside of the club, winking at the bouncer, and strutting right in through the red velvet rope. *Beyonce style*

3 – To be seen.

We all want to belong. MeUndies membership allows people to be welcomed, seen, appreciated, and if they’re lucky, even featured on MeUndies social feed.

4 – To be heard.

Life moves fast, society changes everyday, the newscycle is 24/7. Sometimes, we just want to be heard.

MeUndies encourages their members to provide feedback and thoughts on the product and the brand direction. MeUndies not only hears their members, they enact change based on those opinions.

Adding this layer of membership atop a subscription opens up so much potential for driving deeper customer relationships, gathering customer data to improve future releases, and guiding the company’s decisions.

According to Shokrian, members account for half of MeUndies customers, and spend three times as much overall as non-members.

That’s the power of building deep customer relationships. MeUndies is not just a brand selling underwear to their members, they’ve become genuine, close friends with their members.

And it’s a lot harder to cancel a friendship than it is a simple subscription…

 

MeUndies in Brief

See what I did there? 🙂

MeUndies continues to impress me with their dedication to their values, mission, and customers. They are a truly customer-centric company.

Think about it this way: MeUndies isn’t selling some new and innovative products. They’re selling a new and innovative experience. And there’s a little piece of their playbook every single eCommerce company can snag.

Hone in on your values. Become larger than life. Delivery quality products with an abundance of customer surprise, delight, and engagement. Build a community of raving fans. Develop personal relationships with customers, allow for flexibility, and focus on every single detail in the customer experience.

10/10 stars for MeUndies retention.

What impresses you the most? Let me know in the comments below or tweet directly at me.

 


ABOUT THE AUTHOR

Kristen is the lead on all things education, retention, and community-related at Churn Buster. She’s obsessed with creating meaningful customer relationships and showcasing the human side of eCommerce businesses.

Kristen has worked with hundreds of top companies (including ButcherBox, LOLA, and Four Sigmatic) to improve MRR and build deeper connections with their customers.

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Kristen LaFrance