It is hard to imagine a category more relevant to consumers during a pandemic crisis than telehealth. But the D2C company Ro was especially well positioned for a locked-down clientele because it had built itself as a full stack of solutions. In addition to three online health clinics —Roman for men, Rory for women and Zero for addiction treatment — they also have a network of pharmacies for prescription and home delivery. But according to Co-founder and Chief Growth Officer Rob Schutz, you sell telehealth by targeting the ailment, not by trying to sell the idea of the D2C doc.
MP: You're part of that new generation of direct-to-consumer brands. Tell us about the growth path over its first few years and your major acquisition channels.
Schutz: When we launched, we were a new model, not just direct to consumer. We are full stack. We provide the onboarding experience, the ability to chat with a physician, the opportunity to have your prescription medication fulfilled through the Ro pharmacy network.
A lot of the ad networks didn't quite know what to do with us.
We were able to see early on that both organic and paid search were valuable as channels. Intent is very high in health care. A lot of people will go onto Dr. Google and look for certain conditions or look for different solutions, and the high-intent channels that are lower down the funnel are a great place to play. That's really where we started.
We pushed the envelope pretty
quickly. We were on TV by month four. [It] forced us to think a lot more about our voice and our tone and our messaging very early on.
MP: What was your response to the pandemic when it hit?
Schutz: In early March, we got a volunteer team together that was able to build the first telehealth assessment for COVID-19. Someone could come online, input information about where they've traveled, if they were experiencing symptoms, what contact they've had with other folks who may have been exposed. And then based on that, they would be assessed.
If the risk was high, they would be connected for free to a doctor or medical professional who is licensed in their state to talk with them about what's next. [It] really brought telehealth forward several years more quickly than we had anticipated.
MP: But your media plan up until this point was very condition-driven to begin with,
Schutz: That's right. We have found speaking to someone at eye level — if they're experiencing ED, if they're experiencing vaginal dryness — talking to them about that specific thing is much more powerful than talking about telehealth and a doctor in your pocket.
MP: That's interesting when it comes to how you educate and brand and get the market to adapt to a new model. In this case, you're leading with a specific answer to a specific need rather than selling the category.
Schutz: Totally. The challenge that companies have faced when they're trying to go direct to consumer with telehealth is being a little bit too broad. They say, “We're the doctor in your pocket. We can help you with whatever you need," and consumers [say], “Great, next time I have a sinus infection, I'll download your app.” Being much more specific and precise allowed us to actually expand much more quickly and grow at a pace that we could never have anticipated.
MP: What volume did you see from the crisis?
Schutz: We wound up partnering with close to 100 companies to offer a free COVID assessment and brand a page for them to offer to their employees or to their customers or a set of freelancers or gig workers. We worked with companies like Uber and Postmates and Codecademy. Uber rolled out the service to all of their U.S. drivers, and we saw tremendous amount of traffic from that.
When it comes to more of the core products … we've seen a tremendous uptick in terms of search traffic in general driven heavily through organic. But April to May, we saw about a 40% jump in organic search traffic driving people to site. There's been massive growth in areas that are a little unexpected. When you look at our smoking cessation product, Zero, we've seen almost 100% month-over-month growth just in people coming in wanting to quit smoking.
When you look at treatments on Rory, which is our women's vertical, we've seen almost a three times growth when it comes to conditions like sleep or vaginal dryness.
MP: Did you change your media mix at all either to help control that influx of new patients so you knew that you could
handle the supply or simply because you didn't need some of these channels anymore? There are certain companies that turned their TV off because, simply by nature, this was a situation to favor
Schutz: If you're a DoorDash or a Grubhub, you probably don't need to be running your paid social ads anymore. We took a cautious approach early on where we said we don't know what the world looks like. It's mid-March, it's foggy out and we can't see 10 feet in front of us. Let's slow down a bit to make sure we understand what the world starts to look like. You want to look at things like retention rates and your cohort analyses, you want to understand average order value and are these cohorts that you're bringing in as valuable as previous ones have been from specific channels.
Rory is a great example of found areas of opportunity. We launched our first Rory TV campaign last month. It's more a matter of efficiency of
media and demand, and where we see areas of efficiency, we will continue to press and make investments to continue to bring in new patients and see if we can help them.
MP: Did cost of customer acquisition go up or down?
Schutz: It really depends on the channel. CPMs dropped on paid social. When you look at the averages starting in mid-March through early May, when you look at TV, you will see a similar drop in advertiser spend, which opens things up a little bit.
MP: Were you competing with everybody else trying to try to grab those search terms?
Schutz: We've always been very aggressive around search, both on the paid and the organic side. I know that there were areas of efficiency as some folks pulled out but, by and large, you didn't see as many people dropping out of high-intent search volume for businesses like telehealth where people were searching specifically for these terms or specifically for what you offer. You saw people trim a little bit more in higher up the funnel channels. So when you look at an out-of-home or a TV or even paid social, where you're doing a little bit more push instead of pull, some more people drop out. But that's definitely started to recover, if not fully recovered, at this point.
MP: You mentioned that you were paying close attention to your metrics and the kinds of audiences they were attracting during his time. What did you learn from it? Were these shallower or lower-value audiences that you were getting despite the higher flow?
Schutz: If someone comes in for the first time, they can understand the convenience and how much friction it cuts out of the process. We've seen people sign up at higher and higher rates for multiple conditions on our platform because they are so comfortable with dealing with their physician. So we've seen a steady proportion of people who are high value, high quality.
Part of that is also the demo that we go after. Many people may not realize it, but the average age on Roman is almost 50 years old. There are other companies who are doing great job building businesses that are more focused on your 20-something Instagram audience. We're really focused on that slightly older demo that needs to interact with their healthcare professional more often.
MP: You're in a category that was just made for this crisis
and in some respects it sold itself. What was the biggest challenge in all of this? What was the thing that you didn't see coming that you may have learned a hard lesson about throughout
Schutz: It was surprising and gratifying to see that it became less of a question of how valuable telehealth is compared to in-person care. Discussion accelerated and the CDC is recommending telehealth, the federal government is recommending people stay home and use telehealth.
We were very proud of the work we did with the assessment and some of the other areas we've invested in to be helpful. But we also realized that the best way we could be helpful over the long term is to build amazing products and services for patients through telehealth.