Best Practices
01.07.2022
TLDR
Hydrant, a hydration product company, achieved rapid growth by tailoring its marketing approach. They used multivariate analysis to target distinct audience segments and develop unique value propositions. Engaging niche communities on platforms like Facebook provided valuable user insights that shaped their product development and messaging. Hydrant's products were designed to integrate into users' routines, encouraging repeat purchases. Expanding into retail spaces also influenced their branding approach. This strategy helped Hydrant establish itself in the hydration market and maintain brand consistency.
Hydrant was founded in 2018 thanks to a partnership between University of Oxford graduate, John Sherwin, and private equity investor Jai Jung Kim. As a biology student, Sherwin noticed that many of his peers were experiencing symptoms of chronic dehydration without realizing it. At the time the $28 billion hydration market was dominated by sports drinks marketed towards high performance athletes. Sherwin observed that hydration is a problem that everyone faces, so he created a product that is designed to teach its users how to make hydration a part of their routine.
While Hydrant was designed to solve a common problem Sherwin quickly realized that marketing designed to appeal to everyone ended up reaching no one. Hydrant experimented with Facebook and Google ads, conducting multivariate analysis to determine which messaging converted which audiences. From here they were able to develop several distinct value propositions to reach their most high-value audiences. These value propositions were united by one theme—driving repeat purchases.
In their first year, Hydrant did about $40k in revenue. Within two years of their 2018 launch they experienced 60 times explosive growth driven by repeat customers - their repeat purchase rate is over 40%. While you can buy hydrant products individually online or in-store, their subscription service accounts for half of the company’s business.
By opening up nontraditional lines of communication with users (like through the comments section of their advertising - see above), Hydrant was able to shape unique value propositions for their distinct audiences. In turn this allowed them to develop a strategy that fosters repeat purchases. Let’s see how they did it.
Approach digital marketing as a forum for communication to drive product development and develop value propositions
When Hydrant initially launched their company on Shopify, they struggled to define their brand. Sherwin believes that everyone could benefit from Hydrant, but as he says, “you don’t want to boil the ocean with your marketing dollars.” Instead, they looked to digital marketing as a line of communication between Hydrant and its various audiences. It was here that they began a multivariate analysis - this means that they launched campaigns using the same creative with different copy. This allowed them to test a variety of different value propositions to see how audiences responded.
“The copy might say, drink this after sports to get hydrated. Then a second version of that ad might have exactly the same image, but then it might say, drink this first thing in the morning to wake up with a rush of hydration. Then we might have four other versions of that ad. We would pick different audiences based on demographics. We were definitely looking across age ranges, where in the country people live, but also interest based,” says Sherwin.
Below you can see an ad marketed towards one of the niche audiences that Hydrant identified - rock climbers. In the company’s early days, Hydrant identified a group of climbers on Facebook that would discuss their products. From here they engaged with them in comment sections to save on ad spend. Once this community became more robust, they began investing in ads that cater directly to this niche audience (see below).
They began digital marketing with Facebook, Instagram and Google, and analyzed the comment sections for similar audience insights. Hydrant is active within these comment sections - in fact, the company has a Slack channel where comments are funnelled in to inspire product development or messaging. They will answer questions, offer information, and give advice on how to use products. In fact, the feedback they received here lead them to develop their sugar free products, as many users said that their products weren’t compatible with their sugar-free diets.
While reviews offer feedback from current or past users, ad comments can be used to source insights from potential users and untapped demographics. “The feedback loop is fast, so one month of testing can get you enough data to dramatically change the way you look at your business, and improve your customer acquisition,” says Sherwin.
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Integrate products into users’ routines to foster repeat customers
Early on, Sherwin knew that onboarding and education would be essential, as they were marketing a product that users may not know they need. By sourcing user feedback from ad comment sections, Hydrant eventually developed four staple products that are meant to be used four times throughout the day. Once they were confident in their messaging, they opted to put their value propositions on the front of their packaging. “What surprised me the most is people use the product the way you tell them to,” says Sherwin.
Again, the inspiration for these four products was sourced from user comments. Users were always asking if they should drink Hydrant before or after their morning coffee. Sherwin was inspired to circumvent this problem by creating a product that can be taken instead of coffee. Similarly, users were reporting drinking it right before bed (a use case Hydrant was never marketed for), so they created their sleep product.
Hydrant’s four core products are based on audience insights, and are designed to be integrated into the user’s routine. While they initially marketed towards athletes, the company has successfully managed to educate a more broad based audience to understand the need for hydration first thing in the morning. Sherwin reports that 60% of their customers across age ranges use the product every morning.
Complement D2C efforts with retail partnerships for greater insights
Beginning as strictly D2C, Hydrant began to spread out into retail spaces throughout 2020. In six months, they had expanded into more than 8,500 brick and mortar stores. Without the benefit of marketing data or ad analytics, Sherwin treated this expansion as a trial by fire for Hydrant’s branding.
What they initially found was that their messaging (at the time, “wake up with a morning rush of hydration”) was able to tell consumers what the product was, not why they should buy it. This lead them to shift their messaging to be outcome-oriented, both in store and online.
Their new packaging (shown above) features “immunity” as the central message. For Sherwin, the packaging should display the “core of what benefit your product provides to a customer.”
Hydrant plans to take the lessons they have learned through their digital marketing efforts and retail expansion to upcoming product lines. Similarly, these will be wellness-based, outcome driven products guided by user insight. Sherwin is currently focusing on creating distribution channels like gyms, offices, yoga studios and spas that have low capital investment.
Hydrant was able to distinguish themselves within the hydration market by opening as many lines of communication as possible to identify their high-value audiences, and deferring to user feedback when it comes to their value propositions. This strategy culminates in products that encourage repeat customers, and ultimately creates longevity and consistency for their brand.
