Ramping up sales of a relatively new (in terms of marketing effort) retail/personal product is a costly process. The U.S health and beauty market is an immense market with numerous competing products that create a cacophony of competing messages. Cutting through all the noise and convincing customers to buy your offering requires potent tactics and frequent repetition. (as a way of validating my comments, I had a career in marketing and taught it at Temple U.)
What I am most impressed by is the rapid movement to correct initial missteps. IMO McLaughlin, being a novice in consumer marketing attempted to minimize costs by contracting his customer service operation, with sub-par results. This is a typical mistake of a novice and he probably initially ignored the advice of his JV partners, who have much more experience. Since customer service is a very critical aspect of sales generation and retention, McLaughlin should have produced a focused effort in-house where he could control its execution. You are correct to point out the decline in sales growth in month 3, but it was clearly due to poor customer service performance. The move in house, according to the company has already energized new sales and sales retention, reduced operating cots and will increase margins.
IMO the company is on the right track and I look forward to a resumption, even an acceleration of sales growth and in profitability in Q2. All in all, a good developmental quarter for IMMD!
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