Growth Secrets of a $1.6B Cloud Pharmacy

ForHims.com generated $1m in their first week… & the ‘cloud pharmacy’ is expected to hit $380 million this year. 

So what’s their secret?  & how can this inspire our own growth strategies? 

DTC pioneer, hims & hers, offers: quick, discreet & affordable prescriptions by mail. For conditions men often find embarrassing. Facing stiff competition from fast-scaling brands such as Manual, Numan and Sons

The race was on to acquire customers quickly. It’s safe to say, Hims is winning that race.

Here are 3 Key Lessons from Hims’ 104% YoY Growth

As the pandemic made telehealth essential, Hims condensed a 2-year growth plan into 90 days. Here's how they thrived in those 3 months.

Differentiation

Founder Andrew Dudum’s vision was to win customer loyalty with easy-to-use experiences & innovative design.

Hims also focused on building education & awareness into their service. Customers could make informed decisions about which providers & treatments to choose.This differentiated Hims, built trust, increased CVR% & drove repeat purchasing.

Holistic Growth

In 2020 alone, they; released home COVID-19 test kits, therapy services & Spanish-speaking services. This not only increased the sie of their market, but also the life time value of a customer as Hims were able to resell these customers on other products.

Hims also absolutely crushed with their performance marketing. They make >70% gross on sale. Well within the comfort zone for scaling using online ads.

But the real secret to ads success is optimising the whole system.

They drove ROI through optimising; 

• Increased Ad CTR with distinct and stylish creative
• Ad CTR%, 
• Landing page CVR% via offer testing
• Customer life-time-value (cLTV)

Hims were able to deliver exponential growth by juicing each part of the system.

Retention Over Acquisition

Acquiring new customers is up to 5x more expensive than retaining them.

Hims prioritised fierce loyalty to customers and a focus on patient care to achieve impressive customer retention. Achieving a cLTV of $325 after three years.You simply cannot succeed with ads if your cLTV is anything lower than $150.  This high cLTV gave Hims the advantage to spend more than their competitors to acquire the customer.

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So Hims have absolutely killed it. But, it’s important we don’t forget the main lesson here:

Performance marketing doesn’t create success. It amplifies it.

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Their business was primed for success from the start.

What made their business model so effective: ‍

• They were differentiated against competitors
• Their product fit the needs of their market perfectly 

‍They were primed to succeed using online ads:

• Their retention strategy drove a high cLTV of $325
• Their margin on sale is >70% 

Their execution was timeless:

• Adapting to the changing environment
• Optimising the whole marketing system to compound growth
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If you want to blow up using ads, focus on building something that CAN blow up.

Think:

- USP & PMF

- High Margin & High LTV

- Optimise the whole system