#3 - How Geologie leverages first-party data to accelerate growth

Welcome back to Don’t V*LOOKUP ☄️ , where we explore how top commerce operators and practitioners leverage data to make critical business decisions.

Geologie, a hyper-growth personalized skin, hair & body care brand, is known for racking up “best of rewards’, and this episode is no exception. The ensuing article will not be nearly enough to cover the breadth of valuable content from Stephen Racano, Head of Growth @ Geologie, so make sure to tune into the full recording below. 

🎯 The TL;DR on what you’ll learn in this post 🎯 

1. How first-party data drives personalization and higher LTV

2. How Geologie leveraged first-party data to expand its TAM

3. Why data accuracy is the #1 issue facing brands

4. Stephen’s north star KPI and go-to tools to lower the barriers to data-driven decision-making

*for more from Stephen, tune into our full-length interview above:

» Why SPF and retinol are key ingredients to an everyday skincare routine (yes, especially for men out there)
» How Stephen’s background in SEO and building in-house analytics for agencies has informed his data-driven tactics 
» How young and scaling brands can leverage free SEO tooling to get ahead of the trends and competition
» More on why data accuracy is the #1 issue facing brands

 📊 Behind Stephen’s data-driven marketing approach 📊 

While Stephen has been with Geologie since their launch in 2018, his DTC experience extends well over 10 years — having built in-house analytics teams and measurement solutions on behalf of agencies.

Through countless brand audits, Stephen came across the all-too-common reality that most brands couldn’t trust (or weren’t even aware) that their data was not accurate. Tracked revenue and transactions were often 10-15% off, which ultimately can lead to poor downstream decision-making.

With recent restrictions in third- and first-party data collection these trends are getting even worse.

"You need accurate revenue, contribution margins, and CPAs so that you can know how much to invest with confidence," he told us in the interview. 

Stephen and his team’s approach to analyzing and actioning on collected data is highly centered around consistently hitting their forecasts, which provides a different level of performance accountability.

🥇 First-party data collection as a growth accelerator 🥇 

The initial key to scaling Geologie’s business is their deep understanding of their customer base through their pre-purchase personalized quiz.

Why?

First-party data collection.

Collecting first names, asking what problems consumers are looking to solve, and whether customers are new to skincare has greatly impacted targeting and personalization efforts as the business has expanded.

Audience segmentation has also been key to understanding the differing customer cohort unit economics (more on this topic in the north star metric section), building high-value LTV customers through loyalty (loyalty customers have a 2x higher LTV), and expand the TAM through product line extensions.

Yet the most significant insight for their growth came through first-party data that hinted to a shifting customer demographic.

🚦 I saw the signs, and it opened up my TAM, I saw the signs 🚦 

While Geologie is now a 50/50 unisex split across its various product lines, the brand launched exclusively targeting men’s skincare.

Stephen and his team recognized the slowing signals of peak demand in men’s skincare post-COVID through looking at search intent from tools such as Similarweb and Google Merchant Center (by analyzing brand impressions + CTRs), other proprietary data sources to look at competitors' growth trends, and — of course — evidence from their pre-purchase survey.

While Stephen considers the shift to also target a female demographic a “happy accident” and a necessity given the macro trends on men’s skincare, the direction of their product line extensions and available data supported their conviction:

• YouTube is a significant piece of content marketing, and the data suggested increased engagement (e.g., search intent for do-it-yourself skincare routines) for women

• Social proof: As the “Best of awards” and press mentions extended outside of the male-dominated (e.g, GQ/Esquire) to unisex publications, the increased social proof supported broader targeting. Winning the 2022 ‘Oprah’s Best Unisex Skincare’ award was the most impactful social collateral to unlock paid media efforts

• Paid media tests demonstrated strong and scalable LTV / CPAs across female focused audiences

**Most importantly, SEO-related activities are evergreen and lead to more profitable growth over time. Stephen believes that while 2023 marked the year of profitability, 2024 will be back to brand building.

**For those who didn’t appreciate the bad joke title to this section, please refer to this video**

 🔢 Importance of data accuracy 🔢 

While the growth of Geologie is admirable, the most interesting insight from Stephen is his view around the importance of data accuracy to make confident business decisions.

This should go without saying, but we agree.

Stephen already highlighted that most brands' revenue tracking can be up to 10-15% off (I’ve personally seen this 30%+), and included his “must-haves” for building a critical data foundation.

1. Tracking revenue and orders (based on transactional data, e.g., order IDs) with <1-2% differences each day

2. Ensure consistent order IDs are passed from your transactional platform (e.g., Shopify), data storage (Google Analytics, a data warehouse like Google BigQuery), to data activation platforms like your ESP (e.g., Klaviyo)

3. Measuring how well your forecasts match up to the actuals (Stephen challenges his team to be within 1-2%).

Only after feeling confident about the steps does it make sense to go deeper to analyze various channels and attribution models. Often, brands prematurely jump right into the latter stage.

🔎 Main takeaway 🔎 

Leveraging first-party data to identify trends within your own and competitors businesses can be a significant competitive advantage.

But most important — make sure that your tracked revenue, orders, CAC, contribution margin (really any data you’re basing your business performance on) are accurate. Inaccurate data leads to inaccurate decisions.

⭐️ North star metric & key data tools ⭐️ 

North star metric:

• LTV / CAC (Lifetime Value / Cost per Acquisition) 

*Stephen stresses that the blended Cost per Acquisition (CAC) needs to be all-inclusive of marketing efforts. This means not just including paid social and search but also brand marketing, freelance/agency resources, SaaS fees (really anything that facilitates a potential sale).

*LTV, which Geologie bases on Net Revenue less COGS, is viewed over the short term (30, 60, 90 days) for payback periods and longer term (12, 24 months) given that Geologie is heavily subscription-based. Payback periods ultimately depend on your cash balance and working capital needs (e.g., do you need shorter periods to reinvest in other marketing efforts).

** Beware of averages! Getting as granular as possible on cohorts is important, as different customer audiences can have vastly different LTV and CPA that ladder up to the blended metrics.

Key data tools:

• Similarweb - View organic and paid SEO trends for your brand and competitors using first-party data.

• Google Search Console - Track top keyword searches and trends for your brand.

• Google Merchant Center - Track brand impressions and CTRs for your brand and competitors.

• Google BigQuery - For storage of first-party data such as transaction order IDs from Shopify.

» For the full run-down of insights from Stephen @ Geologie and from our other expert guests, don’t forget to check out our Youtube channel or Spotify channel.