Backing the Next Generation of Consumer Brands with Tina Bou-Saba
With over 20 years of experience in the consumer ecosystem, Tina Bou-Saba is an active investor across beauty, health and wellness, e-commerce, and more. She’s the cofounder and managing partner of Verity Venture Partners, where she backs generation-defining brands and the tech that supports them. Tina’s personal investing track record spans many top emerging brands including Olive & June, Rae, Kosas, Hydrant, Saie, and Huron.
We sat down with Tina to run through her diligence criteria, ecommerce enablement drivers, evolving consumer appetites, clean tech stacks, and the new fund she’s raising at Verity.
Diligence Criteria: Sticky Customers & Organic Reach
Over the course of her career, Tina has gained a deep appreciation for the power of brand and customer loyalty — two key characteristics she looks for in potential investments. When Tina evaluates a brand, she asks:
- Is there a sticky audience that’s making repeat purchases?
- Are there loyal customers who share the brand organically and even form communities around it?
- Does this company have a clear customer acquisition edge?
In terms of metrics, Tina looks at repeat purchase rates, product margins, percent of customers on subscription, social media data, and a healthy mix of paid and organic acquisition strategies. She points out that while average order value and other traditional ecommerce metrics are useful to frame diligence, she prioritizes evaluating the broader business model, community engagement, and how founders creatively leverage data.
In her words, consumer brand investing requires identifying categories that can hit a high multiple exit over a five to seven year period. The industry structure in many consumer categories is centered around conglomerates, so as a venture investor, Tina focuses on unlocking exits in the branded consumer ecosystem.
Outside of consumer, Tina sees a massive opportunity in the enabling technology space and is actively investing in the field. Her experience working with emerging independent brands over the past five years has given her insight into what infrastructure tech brands are using, what tools they actually need in real-time, and which software tools aren’t mission-critical.
“As we think about the eccomerce ecosystem, at its core are branded consumer businesses. Adjacent to them are the tools that support those businesses, including enabling tech like Tydo. That’s a segment we’re actively tracking and investing in.”
Verity’s Value Add: Collective Operating Intelligence
Focused on backing early-stage companies, Verity is looking to lead or co-lead most of their investment rounds. Typically, they’re writing checks from $750K to $2.5 million.
In terms of engaging portfolio companies, Tina and her business partner Matt Levin leverage their collective consumer and retail backgrounds to up their advisor and operating networks.
Having straddled the investor/operator line for most of her life, Tina likes rolling up her sleeves and helping founders navigate the weeds of their businesses. This is a different approach from many early-stage investors, but one which differentiates Verity. From firsthand experience, Tina knows that early-stage brands are looking for genuine value-add partners — folks who can really help them think through the day-to-day and smaller decisions, such as which retail term sheet to take, while also helping them navigate larger strategic issues
From her vantage point, there’s a unique opportunity right now for a firm that has expertise both on the consumer product and service side, as well as on the enabling technology side. That’s the Verity sweet spot.
“Investors have to straddle two priorities: portfolio construction and sourcing and winning great deals, while also zooming out to a 30,000 foot view of what’s going on in the ecosystem and how consumer preferences and behaviors are shifting.”
Leveraging Data as a Competitive Advantage
Consumer brands have access to seemingly endless amounts of data, but most companies, especially smaller brands, are leveraging very little of it. While some of that might be due to bandwidth or a knowledge gap, there’s a clear opportunity for investors to help brands engage with their first-party and zero-party data and implement quant-driven growth tactics accordingly.
Tina specifically recommends that brands start by cleaning up their tech stacks, or at least outlining and establishing hygiene best practices. In her words, Tydo’s a great place to start.
For companies who do one to ten million in sales, the hardest part is bandwidth. Their data strategy falls through the cracks because they’re constantly fighting fires. It’s just not a priority.
The other piece of the puzzle, Tina points out, is a lack of education and awareness of what’s possible with data. There are so many tools out there, but it’s hard to decipher how a tool impacts a specific function. Again, that gap in knowledge can be partially filled by experienced and engaged investors.
“For me, the question is around how we can help cut through the noise and support founders of fast-growing consumer brands by clearly defining best practices, and partnering with founders to execute accordingly.”
The Future of Consumer Brands: How to Win
It’s never been easier to launch an independent brand, but it’s also never been harder to grow and scale one because of the hyper-competitive nature of the ecosystem at large.
Consumers have an insatiable appetite for newness, but according to Tina, the winners will be the emerging brands that form authentic connections with consumers, and build communities with real meaning and longevity.
While a hot brand might sprint out of the gates with a ton of press and attention, that doesn’t necessarily mean that its underlying business model, go-to-market strategy, and operating margins ensure healthy growth over the months and years to come. Rather, true brand durability derives from a loyal audience, product that delights customers, and clear acquisition advantage as it relates to unlocking organic growth at scale.
“That’s the core of Verity’s thesis: backing brands that aren’t necessarily the flashiest, latest, greatest things. Rather, they have genuine longevity and durability, driven by passionate customer communities and supported by sustainable business models.”
- What to pledge
- How to improve
- Which tools will set you up for success
I think the most important thing brands can do in 2023 is to better manage their customer data—both ethically and effectively. There’s an opportunity for brands to know their customers better than ever before—a clear benefit for both the customer and the brand. When you manage your data correctly, you’ll create stronger and more personalized ads, creative, site experiences, and so much more.
This is a classic: Let the data guide you. Go where the buyers for your products are and communicate with them on a personal level (i.e. by persona and funnel position) and nurture those relationships (past, present, and future customers). It’s possible—all through data.
We recommend that Shopify brands analyze and update their websites using data-driven decisions. Using analytics tools such as heatmaps and scrollmaps can help brands better understand how customers are interacting with their store.
Store owners tend to make assumptions about the way customers interact with their website. Most never go back and analyze their design choices to find pain points or areas of opportunity. By using heatmaps and scrollmaps, they can see where real customers are clicking and concentrating their attention. Leveraging this data, brands can start to iterate on design and make their online store experience streamlined and intuitive.
Hotjar provides a simple way to implement heatmaps, scrollmaps, and recorded user sessions on your site, helping you acquire incredibly informative user data. Additionally, it gives you the ability to create on-site surveys, which allows you to obtain direct and often critical feedback from users about their experience.
Test various attribution models and analyze the impact on your business. At Fifty Six, we are always here to help our clients identify and optimize their approach—a critical step in any successful marketing strategy.
If I’ve said it once, I’ve said it a million times–Customer Lifetime Value. And even more importantly, Future Lifetime Value (FLTV). With the ever-growing importance of first-party data, it is crucial that brands take a good look at their CRM and FLTV metrics.
Stop allocating budgets to low-hanging fruit that doesn’t move the needle on conversion. Think about what’s really going to improve your CX and the return of undertaking different initiatives—not just on what’s top on your list of bugbears on the site!
One of the best ways to understand your customer behavior is by using HotJar. Their heat-mapping and screen recording tools shine a light on where customers are navigating to and from on your site, where they're rage clicking and experiencing frustration, and where conversion is dropping off within real life customer journeys and flows!
Understanding your customers’ pain points via data and analytics , will allow you to work with your CRO/CX Agency to solve customer frustrations and improve conversion.
Rewind backs up all product, customer, and order data for Shopify sites—essential since Shopify itself doesn’t provide this solution. It's saved so many of our clients time and money from administrative accidents.
Never miss an update from Tydo
33% of customer service inquiries are pre-sale questions. What does this mean? If you’re not investing in customer service, you’re missing out on revenue-generating opportunities.
The benefits of elevating your customer experience:
- 10% to 25% increase in AOV for customers who engage with live chat pre-purchase
- 21x higher conversion rate for customers who reach out via Live Chat or SMS compared to other site visitors
- 87% of customers who have a great customer experience will make another purchase
- 72% of customers share positive experiences with 6 or more individuals
Gorgias is our favorite Helpdesk platform. They can reduce costs by 35%, primarily by decreasing the average ticket handle time. Their machine learning algorithms are trained on millions of ecommerce-related interactions across Gorgias’ customer base and provide accurate, automated replies for the most common ecommerce inquiries. This helps our agents resolve tickets faster, which provides the customer a seamless experience.
Trust your agency! Agencies do the same things across multiple brands and niches, so we see the trends and have the practice and experience!
Don't be afraid of data and insights. If customers aren't clicking on your emails, try a new CTA. If your ads are driving good metrics at a small spend, start scaling. If your customers are complaining about a product, look into QA! If the data tells you something isn't working, let it go and try something else!
I'm supposed to say Tydo, right? 😉
Double down on differentiation. There will be a lot of headwinds this year and standing out from the crowd will set you apart.
A picture is worth 1,000 words. A video? Probably millions. In ecommerce that value translates into engagement, acquisition, and retention—everything you need to impact your bottom line.
At soona, we've seen the we've seen the impact of creative and the continuous split testing of it yield results. Our resolution is to challenge ourselves and double down on innovation and creative optionality so that each brand we work with can distinguish themselves in a crowded sea of D2C ecomm. We'd love to see our brands share this resolution and keep pushing the creative limits.
Klaviyo. We're using it to power our email and newsletter at soona too!
Optimize your returns strategy! This can lead to valuable customer insights, enhanced user experiences, and increased revenue and customer loyalty.
Brands need to dive deeper into understanding their customers to set themselves up for success. Conduct research to gain insights into customer needs, preferences, and behaviors. By doing so, you can develop targeted strategies that will enhance customer experience and boost overall retention.
Right now I would say Gorgias. Having a good customer service tool is crucial to building strong customer relationships.
Start paying heavy attention to data, specifically around retention. We see a lot of effort put towards acquisition with the assumption that once someone buys, they are your customer forever. Instead, get to know your customer, understand their needs, and analyze their behaviors once they are on-site and judge their sentiment after they have visited. Work with a retention focused and data-driven agency to implement tools that contribute to repeat business and customer delight. It will pay dividends.
When surveyed, about 80% of ecommerce merchants think that they are delivering a great experience to their customers. However, when the same customers are surveyed, only 8% of those customers think that they are getting a great experience from the merchant. Now, more than ever, retaining loyal customers is an essential part of any online business and you should spend time with your customers to judge their experience with your website and products and offer improvements based on that feedback.
Tydo's report cards are an essential tool, along with Klaviyo for email and SMS, Recharge for subscriptions and memberships, Okendo for reviews and surveys, Rebuy for AI driven collections and upsells, Loop for self service returns... each tool is great on their own, but their strength as the ultimate tool comes from when they are used together!
Never miss an update from Tydo
Report Cards is a customized glimpse into your business, delivered to your inbox for free.
Report Cards consolidates all your key metrics across platforms for an at-a-glance pulse of your business.
Discover metrics for every team member so they can stay updated with the right data on a daily, weekly and monthly basis.
It's free because we believe everyone should have access to the basics.
Portfolio is a hub for analytics across multiple Shopify stores. The perfect tool for agencies.
See an aggregate view of all your data for all your stores in one place.
Make real time assessments on marketing initiatives across every storefront you manage.
Analyze the performance of one store versus another in seconds.