A Return to Health

"What we've found over time is that we've become way more efficient," says Zucker of Vitacost's marketing. "I've been at Vitacost a year and we've been able to drive down the cost to acquire a customer significantly. Just in this Q1 vs. last year's Q1 we were able to drive the customer acquisition cost down by 37 percent in our paid channels. What this means is that while I can drive the customer acquisition cost down, I can actually spend a lot more to acquire more customers."

Customer acquisition has been a focal point for Zucker in his brief time at Vitacost. He's implemented a simple process to determine how much he can afford to spend on acquiring a customer: Identify the lifetime value of a customer, then figure out how much of that value Vitacost captures in the first year. That number is what Zucker is willing to pay for a customer. Vitacost is willing to spend more in certain channels (e.g., refer-a-friend, affiliate marketing) to acquire a customer because those channels have traditionally produced customers with a very high lifetime value to the brand.

Award-Winning Customer Service
One area in which Vitacost has excelled in recent years is customer service. The retailer ranked seventh in the ForeSee E-Retail Satisfaction Index for Spring 2012, the third straight year Vitacost has made the index's top 10. That said, don't expect Vitacost to rest on its laurels under Zucker's watch. The brand's executive team has made it a point to make the first email it looks at each morning be the customer surveys from the prior day. Their focus tends to gravitate to the negative reviews, whether it be a problem with shipping, pricing or the website itself.

Zucker also has a direct dial-in to Vitacost's customer service and sales lines, so he can check in to see what's going on in these areas at any time. He's also been known to mystery shop Vitacost.com to get the true feel of what shopping on the site is all about, from checkout to opening a product at home to returning a product. All of this customer feedback and insight is considered when the company makes any decision.
"For as good as these outside companies say that we are at customer service, we're nowhere near satisfied with where we are as an organization," Zucker says. "We tend to look — good or bad — at all the negative things that are happening and get frustrated every day. We are our own customers. We're not looking at a competitor or other people in this space; we're thinking how can we have the best shopping and mail experience."