By Priya Rao. This article originally appeared in Glossy on June 5, 2019.
Behind Needed’s come to market strategy Though supplement company Needed, which launched in May, is focused on being direct-to-consumer first, it is courting health practitioners (doctors, naturopaths, nutritionists) to drive online growth. Unlike wellness companies like Care/of and Ritual, which focus only on selling directly to consumers without a network of sellers, Needed is using its 250-plus practitioners, like clinical nutritionist Lauren Rashap, with 11,300 Instagram followers, and Stephanie Greunke, a dietitian and personal trainer with 16,900 followers, to act much like micro-influencers, said co-founder Julie Sawaya.
When a practitioner joins Needed’s program, they receive product, education materials and a unique code to give to their patients or clients. These codes are meant to track a practitioner’s referrals. Practitioners — who don’t actually hold any product inventory à la Avon — receive 15% commission off of a client’s three-month subscription (which can range from $50 to $75 a month), and consumers receive 10% off their first month’s order if they go through a practitioner. In many ways, Needed’s model shares similarities to what salon stylists are to the professional and prestige hair space.
Arguably, it is also a way to get around the challenges DTC-only brands face, such as the costs of digital ads and customer acquisition. “We don’t expect performance marketing to be our primary means for customer acquisition. Referrals through practitioners is the focus,” said co-founder Ryan Woodbury. “Practitioner-supported DTC offers a lower CAC; stickier customers, given the weightiness of a practitioner’s recommendation; and increased retention.” — Priya Rao