"Why Do I Want the New Flavor More Than My Favorite?"

0:00Crumble [music] Cookies, five out of the six cookies are new every week. That's actually the same thing as frozen yogurt because six out of the eight flavors are new every week. You know what hasn't done that yet is ice cream stores. I haven't seen ice cream stores switch their all of their flavors except for just like chocolate and vanilla every week. They don't do that. So there's probably an ice cream store like disruptor who could make that switch. Fro Yo did it first. They just did it to cookies. We ordered the Crumble Cookies just cuz we're like, let's try these ones. But like after some period of time they're just cookies. Uh but that variety like keeps you that your extends your LTV. So I've been thinking about that as a principle in terms of how to extend lifetime value with any kind of consumer facing services or products.

0:42Like how can we just create consistently rotating new flavors? I will try all of the flavors of a brand and then I won't really buy much more after that. Even if I have a favorite, I'll still rather try a new one of another brand than go back to a favorite of that one. I just love novelty. I think a lot of people do. They also know that the more options you give someone, the more total food they'll eat. It's like we think about total food as like a proxy for LTV.

1:12Like the more things they'll consume. Oreos figured that out and it was like, okay, we'll just [ __ ] put limited flavors every weekend. And so people were like, oh, let's see what carrot cake Oreos taste like. You can see that there is a point of limiting returns on it though. Crumble doesn't have 100 cookies every week. They have five new ones. And then you can get them all in one box. So it's one purchase and you get five new ones. So it's really one buy, but you get lots of variety with one purchase. Also, those are all of the ones that we're talking about are snacks and desserts.

1:42So people may like consistency with like breakfast. They're like, this is the breakfast I like to eat every day and they'd use the same flavor. But when it comes to like snacks and desserts, things that are like not every day or like they're not fundamentals, then maybe that's where like maybe you wear the same underwear brand. You're not like trying to rotate your underwears, but if someone drops a hoodie or drops a belt buckle or like an accessory, it's the impulse disposable income purchases more than like the foundational purchases.

2:11It's the limited edition drop for consumables. >> Does it increase complexity though? >> Yes. That's why people don't want to do it. Cuz it's harder. I think what Crumbl has done is that they have like 10 variables. At the end of the day, it's butter, sugar, flour, vanilla, chocolate, caramel, whatever. I think it would totally work for a brewery. I'll bet you if every you have two main beers that are like the house brew. It's like a Yeah, exactly. A pilsner and an IPA, [ __ ] hefeweizen, whatever. Like the main core and then everything else rotated every week.

2:41>> I think it depends on the intention cuz like some people go to restaurants because they want consistency. Like they want to be able to know, even if it's not the best chicken, they just want to know what kind of chicken it is. Versus some people Some people go out to eat for like, "Let's try something new." So it's like you're trying to cater to both crowds. >> So you have the limited staples and then the remainder of the menu rotates. Frozen yogurt, you just put droplets into the vanilla and it becomes cinnamon. We were talking about the brewery thing. I think it would totally work for breweries. I'll bet you it'd be interesting if the brewery instead of having like 100 beers had a six and every week they were new.

3:20Because then you're like, "I kind of want to try all of them." And how many guys would have six beers to try all of them? Right. If you If there were 20, then you might have three. Cuz you're like, "Fuck, I'll just pick the few that I think I'll like." As far as the consumer's concerned, the consumer won't care about the operational complexity, just care about buying it. So I think it's the whatever the consumption cycle is of the person. So if you go to get beers every week, like the rotation cycle I think should be every week.

3:47I think you can also think about the business model from the front end that way cuz like Built Bars have it because the way that they actually they're vertically integrated so they own their own manufacturing plants. >> Oh, wow. >> They they own everything. Every bar is manufactured the same way and they just change the filling. With just again, it's just it's for you. They thought ahead of time that they wanted and every week they drop a new flavor.

4:13And even on the site as far as the last time I checked, they have a couple of mainstays and then the rest of all of the flavors still rotate. Sometimes you'll get the staple and one of the limited editions and if they only had staples you don't buy as much. Think about how you can add variety. I think this would actually be a pretty interesting YouTube vlog which is like how to add variety to a business to drive more sales. And then just there's [ __ ] nine examples of businesses that disrupted by by having by thinking ahead of time with their operational efficiency for how can I deliver on variety.

4:50But not endless variety, constrain the variety on the consumption cycle of the consumer. Consumables you consume them and so like then you go into another buying cycle. You're not going to get variety of a marketing agency, right? The consumable of that would be the creative that's being pumped out. But in terms of like me as a customer buying you're going to get the same service. So I think it's more for high velocity many time a year purchases for things that consume quickly.

5:23Which lend themselves to impulse purchases. Apparel and obviously food and drinks. So it's like I would have framework this out and be like, all right. First things is let me give you an example of why variety is really can drive a lot of sales into a business. Then are you the type of business that can add it in? In order to do that you You short consumption cycle or you have the operational efficiency to do If you have those two things, then it's okay, now how do you execute it? So, you execute it by having your core staples that people always come back for, and then you have your variety box, which should be still constrained because if too much variety, you have the jam effect.

6:01You have enough that ideally somebody could have all of them. You think about it from an executive standpoint, right? So, somebody's at a big company and they're like, "We should do a limited lay a flavor." They do that. And then, they're like, "We should do more." It's yes and no. It's like, you need to do a limited enough sample that people will be able to buy all of them and still keep their staple, but not so many that it becomes overwhelming. And as soon as you miss out enough of the limited drops, they're not cool anymore.

6:27If every week Jeni's dropped nine new ice creams, I just couldn't keep up. I want to have enough that I can keep up with the variety, but someone should do that to ice cream. Right now, there's no ice cream chain that is modeling the variety that Crumbl and Yogurtland have figured out. People tend to be pretty particular about how they have their pizzas. If you had cheese and pepperoni, if you just had four very out there flavors, chili cheese dog pizza, and then like nachos pizza, and then burrito pizza, whatever. I'm just taking a stab. And like a dessert pizza, [ __ ] pancake pizza. Like people are like, "Holy shit." But they'd be like, "All right, I'll have a cheese and I'll have a small of the Right?

7:09>> Yep. >> And they're like, "Fuck, that was good." But like, you think about that when you walk in, it's like staple, four varieties. >> Yep. >> And I think it's right in that four to six, four to eight. For all you, I think it's way with more because you can get multiple. >> All right. >> But I know that Yogurtland does, I think, one a month, one new one one or two new flavor drops per month. And they have chocolate vanilla, and then they have a couple of the greatest hits. The cookies and creams are usually there. There's a couple of the more mainstays, but I think that what they're doing doesn't necessarily mean that there's not a better way they could be doing it.

7:43It's they're better than everyone else. >> What do you think of like mystery purchases? I don't >> Yeah, it's Yeah. To me, I don't I'm not a huge fan. >> I've never bought >> Right. >> mystery anything. >> I'm not a huge fan because what it means is you have to you're you have to confirm value on the concept of a surprise rather than what the value of the thing is. So, people buy based on the value of a surprise because surprises mean different things to everyone. Some people hate surprises.

8:12If they announce four times in a row that the surprises were insane, then what you're buying is just something that has a likelihood to be good. Does that drive more demand than just like having a rotating thing that you clearly sell? >> No. >> I don't know. A surprise hoodie versus this is the design. I think it's what's the utility cuz if you have like if it's binary with clothes. Either you like it and you'll wear it or you're probably not going to wear it. A cookie, it's hard to really [ __ ] up a cookie.

8:40>> No. >> It's more like you're like, "Oh, that's novel." It's more the newness of it than like that sugar, butter, and flour tastes bad in this combination. Like you can eat any of the cookies pretty much ever. >> No. >> The margin of error on the flavors is way lower. If you get some ra- random frozen yogurt flavor, it's still frozen yogurt. It's still cold. It still tastes ice creamy. If you have a hoodie that's just that's clearly not your vibe, you just never wear it. What are the elements that make variety work? It's like it has to match the consumption cycle.

9:09It has to be on products that are usually impulse that match that. It has to have a low margin of error associated with the purchase. If you buy margarita flavored seltzers, you'll still probably drink them. Even if you're like, "Man, I don't like these as much." The novelty offsets the fact that it's not your favorite drink. >> If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling road map that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so you can click here and you can check it out.

9:42Again, absolutely free. And since you're business owner, appreciate you and enjoy.