Yahoo Finance How we reached profitability by educating Gen Z for free
As a startup founded by millennials and catering to Gen Z, we’ve learned some things about connecting with a cohort that often perplexes older generations.
At our women’s health company Winx Health (previously known as Stix), we reached profitability by slashing our entire marketing budget—without sacrificing growth. We learned that the road to profitability is not easy or linear, but it is achievable. And we achieved it by giving our customers something completely free.
The days of venture capitalists’ enthusiasm for pay-for-play are long gone, and to build a company that can sustainably grow while focusing on Gen Zers, you need to slowly earn their trust and confidence. Gen Zers are savvy and sick of the direct-to-consumer marketing playbook that millennials have grown so accustomed to. Your typical twentysomething today knows when she’s paying for your expensive Meta ads or fancy packaging, and all she actually wants is a quality product that solves her problem.
We launched our company in 2019, in the heyday of a time when you could acquire customers for pennies on the dollar from simple, aesthetic Meta ads. Through the past five years, the algorithms and—more importantly—customer behavior have shifted. Brands can no longer just pay for their customers. We found a better way to appeal to Gen Z, one that gives them something of value, doesn’t shove products down their throats, and lets them discover our brand on their own terms.
Gen Z is different
Gen Zers behave wildly differently than prior generations. They can see straight through the BS. They’re inclined to skip Google and use TikTok search, where they can find authentic tell-all-style videos from their peers, rather than paid-for search ads from big brands with deep pockets. So, when truth and quality matter more than influencers and pretty packaging, brands must step up and cut through the clutter.
Among young consumers, 81% appreciate brands that provide educational content about their products before making a purchase, and according to a report by Morning Consult, 54% of Gen Z adults trust online influencers and educators. This is a generation that wants to be well-informed by the brands and influencers they trust. And when 98% of the generation is connecting with products and brands on social media before they make a purchase, these are stats that businesses cannot afford to ignore.
A few years ago, we spun out a simple educational platform to cover vaginal and sexual health topics that we could use as content for customer service and email marketing. Our goal was to simply provide auxiliary information to our customers about our products and the problems they solved. Because we expected to use the resources provided as supplementary content for our other marketing efforts, we didn’t invest money into it.
Within a year, organic traffic grew exponentially. As the traffic on this part of our site increased, we started sharing more and more resources to help visitors. We still didn’t expect any return on it, considering we invested nothing other than time into it, but we were hoping it would at least establish trust with our consumers. Fast forward to today and it’s the biggest lever that’s allowed us to slash our marketing budget entirely and become profitable.
While our brand sells at-home diagnostics, treatments, and preventative supplements for vaginal and sexual health, we don’t market those products at all. This might seem counterintuitive, but it turns out that when people need our products, they find them on their own—and we have our educational platform to thank for a large part of that.
By providing something free and of value to Gen Z, we’re able to cut through the noise and grow without dumping dollars into unreliable marketing channels. Brands need to show up in authentic ways and provide real value to make it in today’s competitive climate. So how can businesses leverage Gen Z’s consumer behavior?
Invest in educational content: Providing valuable and educational content builds trust and informs your consumers. This approach resonates well with Gen Z, who value authenticity and knowledge.
Leverage organic growth: Focus on creating content that can drive organic traffic. This not only saves on marketing costs but also ensures that your audience finds you through genuine interest.
Utilize social media wisely: With 97% of Gen Z using social media as a primary source for shopping inspiration, having a strong and authentic presence on these platforms is crucial.
Build trust over time: Offering free resources and valuable information can establish long-term trust and loyalty, which can ultimately lead to meaningful revenue and profit.
Gen Z values transparency, education, and authenticity over flashy ads and superficial marketing tactics. By offering valuable, free resources and fostering trust, brands can build a loyal customer base that supports sustainable growth. Investing in your consumers' knowledge and well-being doesn't just benefit them; it creates a ripple effect that drives organic traffic, enhances brand reputation, and ultimately leads to profitability. This approach is not just a trend, but a fundamental shift in how businesses like ours must operate to succeed in today’s competitive landscape.
Jamie Norwood is a cofounder Winx Health, formerly known as Stix.
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