And what we like to do for the first 3 to 6 months of launching a category, is to test into the category to understand the levers of the business, the optimizations to the customer experience that we need to improve in order to ultimately see the trend line towards what that gold standard looks like. Yemi talked about kind of a payback period on marketing. We obviously look at that, but we also look long term as kind of a lifetime value over cap type ratio. And so I would expect in the first 3 to 6 months, fairly small amounts of spend as we stage gate and understand the current ecosystem we’ve built and the optimizations that need to be met. And then as we unlock those different unit economic profile, more capital will come.
Yemi Okupe: To the second part of the question just likely the time that it takes to typically the financial impact. I think the default assumption for the new category launches typically that we expect is around 12 to 18 months to show a significant impact. That’s the result of the stage gating process that Andrew mentioned, sometimes for some categories we’ve seen that pull forward and accelerate but generally the safety assumption is 12 to 18 months.
Daniel Grosslight: Okay. Makes sense. And then, Yemi, maybe another 1 for you on the strategic pricing adjustment headwind. I think last quarter, you said $12 million to $18 million in the second half. What was the headwind this quarter? Do you still expect that to be $12 million to $18 million? And how should we think about kind of the run rate of that headwind heading into 2024?
Yemi Okupe: Yes, it’s a great question. I think that we run just a result of a few different behavioral patterns across the user base saw fairly minimal headwinds. And so that was one of the reasons behind why we were able to raise the guidance and the outlook for the rest of the year. And so I think that when we had provided guidance, there was a few factors that also played into this quarter, some of which we anticipated but not to the degree that they occurred. One thing that we thought we saw a lot of existing users that were on less premium skewed actually switched to a personalized product as well as longer duration subscriptions. And as a result of that, the subscription for more premium SKUs, we just see a benefit from that a greater share of the users are starting to opt and select the personalized product, but again, still carry premiums to the generics given the price points that we put those at.
And then lastly, the renewal rates for some of the cohorts, the legacy cohort, many of them are actually renewing at greater rates. And so the combination of those 3 factors largely offset the pricing headwinds that we’re expecting in Q3 that we see embedded in our guidance is that, that dynamic sustains into Q4 as well. And I think on after the hit, the second half of 2024, it’s very likely to be a tailwind that you start to get the full benefit of longer-term retention and then just lapping the monthly average revenue per subscriber dynamic.
Operator: Your next question comes from the line of Jack Wallace of Guggenheim.
Jack Wallace: Congrats on the quarter. Just wanted to dive in a little bit more to the marketing strategy. It sounds like there was a ton of testing and development of different channels and messages across all the different categories. I was wondering if, aside from just the pricing changes that we saw in the second quarter, if there was any additional benefits you saw there that are implied in the fourth quarter guide, thinking in terms of whether it’s yield on spend, whether it’s new subscribers are coming through the channel and higher retention rates. Anything there that would be indicative of better messaging and reaching customers where they are.
Yemi Okupe: Yes, Jack, I think maybe I can start with some of the question around the type dynamics and then just the broader marketing strategy. I’ll pass it over to Andrew. I think one of the things that we are seeing is just the mix of products that users are selecting fundamentally has changed. And so we with the pricing changes around longer duration as well as putting the personalized product at more attractive price point, more and more users are going towards that. We’ve seen that over the course of several months so that’s one of the reasons behind with conviction. And while the price points are lower than what they historically were, more users are selected them for the average revenue per user inherently is going up.
And so as a result of those changes, we do think that the benefits of that will sustain to the fourth quarter and beyond. And then I’ve mentioned in the prior question, when we hit the back half of 2024, we view the ability to start to really benefit from just longer retention patterns in the course that we do.
Andrew Dudum: The other thing I mentioned, Jack, from a marketing efficiency standpoint, we’re — I think Yemi shared in the remarks for new orders quarter coming from personalized products, which is up quite substantially from last quarter. We expect a large chunk — a large majority of the business to be these types of products in the coming year. And what we see also from a marketing efficiency standpoint, is just the demand and interest and intrigue in these types of products and the ability to personalize and have a conversation with the provider, but know that there are capabilities that can unlock and deliver more value than you would otherwise get somewhere else actually really does have a pretty meaningful impact on the efficiency of spend.
And you can imagine just the visualization in TV commercial, the story and the trust that is built when you see under the hood of the capabilities that are allowing this level of flexibility and customization and cross-category compounding into single treatment, doses and form factors that are more interesting or intriguing to individuals. And so that is something we’ve definitely noticed in addition to customer happiness, customer retention and stickiness that we think adds a kind of incremental tailwind into the spend as we continue in the next couple of quarters.
Jack Wallace: Excellent. That’s helpful. And then just a follow up on that. Have you seen any meaningful amount of prior customers returning specifically for these personalized products and or even aside from that, maybe different demographics being interested in products that maybe weren’t your explicit target demo a couple of years ago.
