Inside Hims.com New Growth Strategy

Leveraging Growth through Cardiovascular Health

Apr 26, 2024

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Personalized, Accessible and Affordable

These three words really speak to me; they sound like exactly the kind of brand I'd want to give a shot. In fact, it's these very pillars that make people really trust and love Hims. The company went public in 2021 through a merger with a SPAC (special purpose acquisition company), with a deal valued at $1.6 billion.

Hims' appeal lies in its strong brand identity, particularly resonating with millennials. Hims has also been entirely “cash pay,” meaning it doesn’t accept insurance. Members pay a subscription of around $20-60 per month to have 24/7 access to online physician consultation and steady supplies of generic medications.

Expanding a Direct-to-Consumer (D2C) health brand presents unique challenges and risks. Some companies set themselves apart by introducing new features, expanding their product categories, and forming partnerships to improve consumer value.

Let's delve deeper into Hims' growth strategy.

Success comes from executing effectively across four key pillars:

In 2023, 30% of Him’s subscribers used a personalised product, doubling the number from the previous year.

The strategy to attract and retain customers relies on four principles:

Consumer-Centric: Focused on meeting consumer needs and desires.
Partnerships & Ambassadors: Utilizing celebrity ambassadors and forming partnerships with retailers such as Target and Walgreens.
Multi-Channel Development: Engaging in TV advertising and leveraging social media platforms like Instagram and TikTok.
Data Security & Privacy: Implementing robust privacy practices to ensure the safety and confidentiality of patient and provider information.

A recurring revenue model lays the groundwork for robust revenue growth and margin expansion, with noteworthy figures to consider:

90% recurring revenue from subscription agreements
A gross margin profile of 75%
Payback period of less than 1 year

Even more important, the growth in subscribers is propelling revenue expansion.

Over the past 2 years, the average monthly revenue per customer has remained stagnant. It appears that the introduction of new products and services is strategically aimed at retaining customers on the platform and encouraging cross-selling, thereby mitigating churn.

Despite the static average monthly revenue per customer, adoption and retention remain strong, driven by innovative products and services. Now, the company is shifting its focus towards an uncharted territory by expanding into preventive care, with a specific emphasis on preventive cardiovascular health.

Cardiovascular disease (CVD) is the leading cause of death globally, presenting both a highly complex issue and a substantial market opportunity.

- In the U.S., over $300 billion, or 15% of total health expenditures, is spent on managing and treating CVD.
- In the European Union, CVD costs €282 billion annually, with health and long-term care accounting for €155 billion (55%), approximately 11% of EU healthcare spending.

Clinical studies have shown that erectile dysfunction (ED) can serve as an early indicator of cardiovascular disease (CVD), alongside other risk factors. Leveraging its expertise in sexual health, Hims adopts a "dual-action approach" to address both sexual and heart health concerns. By personalizing treatments based on patient data, platform providers offer tailored solutions for individuals with ED and additional CVD risks, enhancing their awareness and treatment options.

Following consultation, if deemed clinically appropriate, patients receive a customized treatment formulation. This includes various dosages of ingredients from common ED medications and statins, all conveniently combined into a single tablet.

Building on its commitment to innovative health solutions, as a trusted pioneer in health and wellness with over a million platform users, Hims can uniquely facilitate sexual health treatment while identifying and connecting individuals with elevated cardiovascular disease (CVD) risk factors to preventive care. About 30% of Hims customers have factors elevating their CVD risk.

“If heart disease can continually be the top killer of all people annually, then the traditional healthcare system has clearly fallen short. Overcoming those shortcomings starts with removing the unnecessary barriers people face when attempting to access preventive cardiovascular care” said Dr. Patrick Carroll, Hims & Hers Chief Medical Officer.

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