How Obvi increased LTV by 20% with Fondue

Case Studies
Fondue Team
November 7, 2023
“CashBack is incredible. As a customer, you feel like you’re getting more value. On the financial side of the brand, you’re giving so much value yet not adding substantially to your bottom line. It’s very rare to see a win-win like Fondue.” - Ash Melwani, Co-Founder & CMO of Obvi

About

Tired of standard supplement brands, eCommerce industry vets Raj Shah, Ash Melwani, and Ankit Patel founded Obvi with a simple mantra in mind: Health and wellness can (and should) be fun! Through effective wellness products in delicious flavors, Obvi incentivizes its community members to invest in personal health. 

Challenge

Discounting often leads to one-time purchases that hurt profit margins

After diving deep into their financials, the Obvi team realized they’d paid out too many discounts in an effort to compete with bigger brands. 

While coupon codes successfully converted first-time buyers, only a handful led to return purchases or brand loyalists. At the same time, the brand did not want to stop offering incentives altogether, since this might harm conversation rates and leads.  

Obvi needed a new strategy to: 

  1. Convert website visitors into returning customers (not just one-time purchases)
  2. Incentivize sales while maintaining profit margins, which was the biggest pain point of discounting

Enter Fondue and our CashBack incentive, which helps Obvi meet both goals. 

“Larger brands discount by huge amounts. We needed to reconsider how we strategically compete with them and limit the cash bleeding from our bottom line. CashBack really accomplished that for us.”
Obvi Super Collagen Protien

Solution

CashBack is the best of both worlds: higher-value incentives for lower costs

According to Ash Melwani, Co-Founder & CMO of Obvi, his team was initially blown away by the numbers on CashBack: 

  • Not every customer needs a discount to purchase, so roughly 50% of all shoppers never claim their CashBack — increasing profit margins. 
  • Of the shoppers who claim their CashBack, 40% choose to redeem it as store credit — driving second purchases.

So, they ran an A/B test to compare Obvi’s standard 15% discount vs. a 20% CashBack offer. The results spoke for themselves: Obvi shoppers strongly preferred CashBack to discounts. 

From there, Obvi added a bonus offer: Shoppers could receive an additional 25% CashBack if they redeemed it as an Obvi gift card. Ash emphasizes that this CashBack strategy provided customers with more value and converted them to repeat purchasers. 

“We give customers money to come and shop with us, and the process is so seamless. Why not use your CashBack? That’s how it improves retention.” 

Results

Thanks to Fondue, Obvi increased LTV & saved topline revenue

Since implementing CashBack through Fondue, Obvi can protect their bottom line while bolstering metrics across the subscriber lifecycle. Take a look at the results: 

  • 20% increase in customer LTV
  • 12% of Obvi’s topline revenue saved
  • 25% increase in subscription opt-ins

To put these numbers in perspective, Ash reports that when Obvi relied on discounting, they gave away about 15% in topline revenue. Thanks to CashBack, that number has dropped to 2.6%.  

Looking forward, as Obvi’s community of 400,000 grows month over month, the team plans to double down on CashBack to drive more repeat purchases and strengthen their core customer base. 

“The initial data behind the potential of CashBack is what really sold us. Fast forward, and we’ve seen entirely positive net results across the board — thanks to Fondue.”