NYU Startup School: Customer Acquisition

I started the company we launched 2014 in April 2014 prior to that I was at Stern getting my MBA and actually it was after our orientation where I wasn't the Frank's office and I told him about my idea it was very rough around the edges at the time didn't really know too much about it but what he really pushed me to do was to keep working on it refining it polish it off and just figure out what problem we're solving and most importantly who our customer is and everything that goes along with that you know if you guys have read this is not like a plug at all if you've read any of the press we've gotten last week my wife and I we talked a lot about the customer in all of our interviews and everything so that's the most important thing we never focused too much pre-launch we did to a certain point I should copy at that but after a certain point we didn't want to get too distracted by fundraising because you can get bogged down by that over time but we have a good idea that we had faith in and if we can build good enough and strong enough customer base that really believed in it and followed us like then the rest would kind of follow suit on top of that we thought at the time we were solving the problem and it was actually quite easy to identify the customers for us at that time because we were the customer ourselves so we moved into a new apartment we went shopping for sheets and it just we couldn't find the right solution so this was in 2012 when we first kicked around the idea I should wear flashy yeah yeah sure right right into that so we were moving into our apartment and at the time I just gotten glasses from Warby Parker and I read a lot of articles about direct-to-consumer businesses and you know something you learn in you know kind of like startup when I want is like stay focused and hours down focus focus focus on that stuff so a lot of these businesses were really finding these like pretty huge niches around a very very focused product line where we Parker but no those is no you brick-and-mortar brand everything but their whole thing was like pants with a better fit or so on so if you're solving like one very specific problem on a specific product then then you know the market will will tell you if you're right or wrong if you're truly solving a problem for us it was look we were moving to apartment we went to ABC home which is really really nice in Union Square everything was super expensive over there then we went to Bed Bath Beyond and everything was really cheap and in between there was no like story or connection we didn't know what we were buying it was all strictly on price or everything else you buy like these days there's information there's a story and there's you know more that goes into it consumers today like to like really get to know the products that they buy no matter what vertical is in it's like you want to be really it's because there's so much information out there that you want to feel really confident that you've kicked over every stone and you got the best option for you you know if if you're buying a car you know not everyone is going to be able to afford a Ferrari but if you want it right but you're going to do the research into the best car for you at your price point and everything on that that experience didn't really happen in our space where we were at the time we kind of felt like we were out on an island so at the same time you know I was really like kicking this around I'm like look everybody in the room has bed sheets I bet very few of you could buy telling me what brands of sheets you sleep on and I was like a common threads because there's no brand loyalty and then it was like who was getting marketed to about sheets even though everyone has them it's like something that's like so obvious but like you're never given value propositions you're never given like products or differentiate errs or anything like that so we're like why is this happening it was kind of puzzling to us to do it so we thought that there was this void in the market of price and quality and if you think of like anything you buy if it's like on a curves like the curve turns and slides down a certain point where you're just paying for more but like the car is not any faster or more luxurious or not any bigger or smaller so the car is a good example but for anything else so there was nothing really that was the spectrum wasn't really there for our space at all and we wanted to like figure out who cared about it and what it looked like on that front so what we did to prove this was we went and we hit the streets so we did a lot of customer surveying we went to those stores first and foremost and clicked to free guys you can get whatever information you want on your customer base or research if you say you're working on a school project like easy unlocks anybody so they'll give you time if you ask them like the you know green fees people everybody ignores them right but like if they were like I'm a student just doing research like you'll give them ten seconds and then you got to make the most of that ten seconds at that point so it's like you're asking questions three or four questions there are methodologies to doing this but it's about like getting the information you need without leading them so we thought first of all the most obvious shoppers for our product we're in the stores already so you we went to Bed Bath Beyond then we're hanging out in the in the aisle and we're like what are you looking for and they're like oh just buying sheets you come in here to get something specific know you're shopping on price or in quality kind of but like everybody's answers are like kind of machine wash no one knew for certain what it was and then once you you can't really tell them what you're doing cuz when you tell people you lead them they tell you what you want to hear so there's like practices to do this better but we started getting around to the point that like people just kind of went to their de facto channel whatever it was and just walked out of there with something in their price point so if you're a Bloomingdale's person or a Bed Bath Beyond person or an Amazon person you're probably going to run there and like shop based on price and run out of there for this product so we thought there could be a better solution where what if we inspired people to come to us with different tactics so what we did was you know we thought we would have we'd have to resonate with our customer bid well get to who that is in a second but we wanted a brand that was a brand it was more than just a product it stood for something and it was cool and people wanted to like be associated with it and then at that point you get to make sure the product is great and then it's about building the connection with your customers so in any market you're going to have your early adopters and I guess if you are you guys like do you familiar with like what the funnel looks like of customers and you know how that works anyone that doesn't make sense so we targeted like the super bottom of the funnel which was the low-hanging fruit to us so these people were the most likely to convert to us because a they were our target demo they were predisposed to buying online and they were in market so we could capture these people and get in front of them at the right point then those were the easy people and then at that point what we said was our hypothesis was look if our product is great and we get these early adopters that are if we make them evangelists that like love the product and if we treat every single one like like an M like a VIP and they are part of the team and helping us with the R&D then they would tell one person and that person tells one other person and so on and so and so on and it grows exponentially as the ripple effects go out so we really really concentrated on this bottom part of the funnel before you're like really prospecting to people with billboards out in Times Square where that's really just a shot in the dark that's not like good customer acquisition tactics early in the game most of times you see only like more mature companies do that because they've already like eaten up everything that's the bottom of the funnel we're like the low-hanging fruit people are then otherwise you're just kind of like shooting in the dark at that point so the most important thing to know is like who your customer is first of all so historically the market was 8020 purchasers in skewed towards female so I thought Mott that guys are very underserved in this from an advertising standpoint and a service standpoint in songs I thought there was a big opportunity that if they were marketed to in the correct way that displayed the right value propositions that they would be likely to purchase and change their habits and first you have to know what their habits are so first its who is your customer and then the next thing is what are they doing presently so if there's odds are you're not solving a problem that's like unheard of sorry if like you guys I think you are but there's very few out there that are like totally unheard of like even if you think of it uber there were taxi services right and everything it's like really it's just a differentiator of that type of thing so it's what are they presently doing because what you have to identify who they are what are they doing and like where are they in general so for an internet business like ours there and it is huge they're everywhere and there's the downside of that is there's so many competitors that it's about differentiation anyone could chime in if you have any questions about like about this going forward so the best way to so we really have to build a connection with those early adopters and kind of focus as much as we could so we knew if I can speak anecdotally about me like we knew the texture we knew the texture of the sheets we wanted but we weren't textile experts we knew that we want them to be light we have all these adjectives and like when we express them to people people like yeah yeah I'm looking for that and then like you kind of know that there's some things like going on over here those people agree with you and you kind of need that there's a mixture of things like people are going to tell you know along the way or start up all along the way that it's a bad idea and not big enough and that stuff but you always have to listen to the nodes and the yeses and the people that you like really solving the problem and then you just got to like drill down on those people and figure out what are they presently doing and who looks like them so I'll get into like the website in the in a second and like how we do customer acquisition but that's like the high level 30,000 feet of like how we evaluated like who it is and then I can get them does anybody any questions yeah okay great so our business lives totally online so there's a lot of information that's available online about anybody so Facebook is a great example Facebook has data on everybody and demo data geo data your interests your buying habits and so on so it's really really easy to get targeted the more you target and customer like data the more expensive it gets to prospect and feel so it's like a a push-pull relationship of if your pool is so small and so focused then from a customer acquisition standpoint you're in the pink a lot of money for those people so there's actually like an equilibrium over there of like we're net is wide enough to capture the people that you want but also like maybe some other crap that's in there also so you get a good deal on it just kind of the way to think about it because if you end up overpaying for those people then a the product is still iterating in the early phases so you have to leave yourself margin for error you know what replacing stuff better service and so on so you need that latitude so you can't go too narrow you also run the danger of getting yourself into a ditch at that point that your market isn't probably too small at that point if you have to go that deep from the get-go so it's important to like kind of know the lay of the land um if any guys done like market sizing and stuff for your products like any exercises on like Tam Sam like oh that's everybody they may not know what I'm talking about at all sure okay so there's many bubbles Franca's literature hummus but it's like your total addressable market and your serviceable market and it kind of gets smaller right technically you know the biggest market is like all humans and then like men and then like under 20 year old men and then like you just get lower and lower until you find out like who like your total who you're solving the problem for and then it's how big is that market so that's like an exercise that should be done on every single business to know that you're actually there's enough customers out there to satisfy what you're doing and what you're going after on that front so we did that we were in the launch pad and we did a bunch of those those exercises to kind of figure out that yeah there is a market there then it was as I said back at the beginning it's what are they currently doing so in our case it was they're going to those stores their channel as I said so they're going to Bloomingdale's their Bed Bath Leon or so and so how do we change that habit so what that involves is really understanding your customers journey in their present solution so customer journey is how they're arriving at that decision to purchase whatever you're selling there's usually a long except for like even chewing gum with the cash register right like that's strategically there because like it's such a short journey it's like all it's 50 cents it's right here and I'll walk out with it right but like for other things there's like you have to figure out what they need to know and what research thing to do so we have a very very what's called a full funnel approach because it's hard for a new brand new brand to be like or new anything to just be like hey buy this because there's so many other factors around there so you need the supplemental information and that's all it's personal there's no silver bullet in this whole entire thing that I'm talking about it's like a long process of really understanding your ecosystem so for us what we found out worked really really well was media because there was no media attention on the space that we had so if we got you know press and that's what my co-founder does for that's her expertise is press and PR then we had to like plant that kernel in people's mind so fast forward Inc well we ultimately figured out was everybody in this room has bed sheets and everybody is going to purchase bed sheets at some point in the next two years or so I could virtually guarantee it it's just a question of are we going to be top of mind when that decision point comes for all of you like we're going to be the relevant like you're going to remember us at that point so that's the challenge we have on customer acquisition standpoint because our time horizon could be really short or really really long to them so then it's how do we build that relationship with customers over time is is what the problem we're solving up so for us the first step with media so people read about us in in vogue for instance and they say you know one of the editors will say you know I just tried this these sheets they're amazing you know blah blah great now the person that read vogue they think about us you know for that second and they're probably gone but what we have to do is linger around long enough in all of these different channels and I can only now speak digitally because that's like our brand is like a digital native a brand on that stuff but it's being in those channels and just lurking around long enough so pause there for a second anybody have any questions about what I mean by okay a really good question so we had very little money to start so we couldn't afford to buy so we had to earn it to get the ball rolling so okay I can go a little deeper on this so when you have no money the only thing you have is the product in your reputation to some market out there so the product has to be great and you have to be solving a problem and if you're going to get it as earned advertisement you have to solve that person's problem so we'll have to Kate for you so if you have a technology product you know you probably want to like really resonate you need those people that are advocates ambassadors and and that really are influencers and I'm still seeing someone that's like a Wired magazine or you know anything in the tech space if it's TechCrunch or Mashable wherever it is that they live you need those people to advocate for you because when you're if you think about it that's where your customer lives right it's a chain effect that person the person you want to buy your thing ultimately is listening to this person right so your goal is to get to that person in that channel and if you can't buy it which some cases you can't you have to earn it so what we did in our case was we did that exercise and we said look guys aren't really marketed to with this product so if we put it in GQ for instance we got in GQ magazine then we would inspire people like blindside them and say you know you should be thinking about this because you're a guy and your mom probably your last bad sheets is kind of what our what our hook was in that sense but we have to resonate with them in order to get to all these other people because it's very expensive to go one by one to all your different customers so you target the influencers that go that go in front of that now now that we've matured we know where to buy stuff also because we know like content online there's a lot of sponsored content out there so a lot of these publications you can buy either ads or content in general and put in front them and it serves the same purpose would you have to be able to afford that as matures in the early stages it's about earning it and really resonating it has to be authentic at that point so that in some in some ways that actually hit on like what we do and we try and mimic this all over the place so first we did a little GQ then we did it in vogue and if you think about it like a go web or octopus right with arms like they're not although if you think about it that way they all come to the center like on their own journey but in reality they don't they all like pass the ball back and forth in the funnel as it gets down so you have to think about the customer acquisition as a funnel and how you're going to move the ball down and it's usually not a slam dunk it's usually a lot of like ball rotation for a basketball analogy that you have to pass the ball around and there's cost involved in all of that so what I mean by that if someone's not going to read GQ and just go buy from us we we figured that out but they're going to read GQ and remember us and then they're going to see a Subway ad and then they're going to see a Facebook ad and all those little pieces are going to consciously convince them that like oh these people are either they're big or they're really important or they're really awesome there's some value propositions out there and then when you create this like storm with like putting it in the blender then they all work together if all these factors that make sense to you guys you can't rely on like one thing that's just like this is amateur hours like people that think about so the first thing is like I thought when the business grown to hire like a digital marketing guy there's no digital marketing person that doesn't exist there's content people there's social media people they're search people now if you think about how these all play with each other they also be very very closely related because does anybody have any idea how we track the subway ads that we've run on just go you try but there's a lot of leakage on that so what happens when it's on like RetailMeNot which is usually a two days in or any of people in Arizona using your subway code so then that that breaks real fast but that's like the logical might be most people have like subway like at the code because they for attribution purposes anyone else have any suggestions that close you can't do that though you know I'm not to do from when they shake out how do you hear about okay so it's you're putting pieces together right so post purchase survey is important and no matter what business you're starting that's like a really really critical piece you should have person presumably already checked out and you're just collecting free data at that point you have really nothing to lose so we have a post Burgess survey that says where'd you find out about us again doesn't paint the whole picture but then as I said of people like the attribution bouncing around get to look at other factors of this so what is the lift we got in New York City from the month prior if sales by zip code from last month to this month then she put those for you could see a little bit with the promo code usage okay you filter that the post purchase survey you filter that as well for how much you're getting from that and then you look at the leakage as it goes over into other channels so Google search like how much direct traffic you're getting to your site and how much organic search you're going to your site these are generally the only way people are organically searching for your brand or your product is if they know about it that should be something that's assumed for you guys so how do you get one step above that and make them know about it or like there might be two or three steps above that but it's about knowing like how they got down the journey what's their search and they know your branding or top-line your searching it's on you on the site or on the app or whatever it is to close the deal because they already know about you it's about communication at that point so before you can like really seal the deal with a our case if it's free shipping or like we're referral or like whatever it is you need to like create value propositions across the board to these people so that might be different for different people so now as we've gotten more sophisticated we have pieces of content that would say like 8 reasons you need to buy Brooklyn and sheets we did a V testing on this people reading that piece of content first versus that piece of content as the second touch point and third put touch point at every single channel so what it turned out was that that piece of content this is just like a very perfect example for you guys that piece of content resonated much better from conversions with females rather than males so what do we do we split it into two of so now we've two different 8 reasons 8 reasons for guys eight reasons for girls they don't know the difference because they're being pushed in two different channels so the guy reading GQ sees these value propositions the women reading both vogue reads these propositions they don't know about each other so while you're climbing up to like understand your customers it's while you're building this like ladder in this one all you really need to understand what these people want and sometimes you have to go out and talk to them other times you can research data online but it really involves in my case I did the first 5000 customer service tickets that came in with people questions about the products and about the sale and like you learned about the products and what people are really looking for on that front if that makes sense but it's about it's really really about not understanding who they are and where they are and putting the pieces together and marrying them so you can make it more sticky in those places like the trick here and then it's replicating that over and over and over and over again so that exercise we did in New York at the subway we probably will replicate it in other markets and just do the same exercise over and then you get to testing we see ok it is well then once you get down to numbers in customer acquisition right it might be cheaper for us to use the same methodology in San Francisco than it is in New York so then that's where you want to focus your attention I'm not saying that's true but it's that might be the case and you have to understand that because there's different costs to all these things of how they interact with each other at every touchpoint goes here here we get some kick questions - yeah you're like still so young have much money from marketing before like you were saying stuff how to make these larger collocations like Vogue or GQ did you do anything influencer marketing like more social platform yeah we did very little paid social stuff at the get-go it was all organic and it was all with influencers the way we did it was we the same methodology of did like if you're reading GQ like again it's about who is that person so who are they following on Instagram what brands do they like and that's like kind of where you need to be you know hovering around there's a lot of sophisticated tools in there so Google has a tool called GSP it's called it's like an inbox tool for I don't favorite scene in your email like the top two lines are like two random brands but that like we're selling you something kind of in there and like your promo box you guys now that I guess how they get there it's it's a look-alike of certain brands in your inbox that Google could target they have the data so if I know you shop it ever Lane I'm going to target you because that is a more likely conversion than somebody that you know is totally cold and random so it's like it's about whittling that down the social paid social is can be expensive depending how you have target on what your product is so you have to make sure the economics work oh man I don't know the nature of all your businesses so it's or what you're working on but you know simple back-of-the-envelope is and I again I'm not like your accountant it's not I want to be able to probably but but like how much gross margin you have for your product is generally like the upper limit and probably I wouldn't touch that but I like how much you could pay to acquire for a customer so if you're selling something for a hundred bucks and your gross margin 50 bucks without going crazy I would say you have an absolute Maxima $49 to go up to and then you have to figure out how that slices so it costs a click and that Google inbox is a dollar twenty-five you know getting the sponsored post you know wherever it is response or kind of you know if it's an influencer has your payment for us it was product that's usually the best thing to do first trim points between your own money it's try the product you can have it for free you have to be able to gift your product if you're not willing to do that then you're going to get not going to get very far codes are okay to use it are good to use but again there's leakage out of that stuff like when you're first starting it's obvious it my job became much more complicated over the last six months or a year because it's hard to see these like lists of what's going on in early phases if you hit something that works you're going to feel it you're going to know it instantly and like you have way more downloads purchases whatever it is like right at that moment you know and then my advice is to like scale with that because you're hitting a note with your customers at that point so in the early phases we didn't have the sophistication for it now we have affiliate links that are buried in and like redirects so we can cook you people and we can follow them around with ads and so on so for in you guys know how to like retargeting works in ads goes yeah so you can't retarget somebody that's never been that's not familiar with you it's like fundamental to the rule so it's about getting that pool and those people are much cheaper once they're near retargeting pool then cold people what you're going down to so it's about getting them to click on your site or just read about you and once you do that you're like halfway home because then it's about what else do they need to close the deal did they need photography do they need an article do they need someone and you're just feeding them on this journey that most people do it in some way and then you got to replicate that over and over and over and over again so if you know they're going to click you know for us it's it might be an article in a business publication and then like okay whatever and then they see some photography and like a sponsor because we target them so in Instagram sponsored ad great they're a little inspired or thinking about it then they get a deal of free shipping or something like that and like subconsciously we're just like pushing and pushing and pushing but it's like it's really knowing what your funnel looks like it's like square one fund and influencers live there sorry those tenants like to answer question you got to be able to give away for free so I would say like no matter what yeah I actually when I was in business school we had like a workshop from somebody from Mercedes that came in and this is like exactly the answer for you when they launched the CLA coupe they gave it to like the top ten Instagram influencers they complain they gave it time to drive for a week you know Mercedes for a week and I said you know document it and do it and I was like really kind of tip off to me I was like I guess it works small and big it's like the same thing you need people to get it for free and love it and then show it off to everybody's like kind of the playbook and then resonates I haven't heard but like yeah Mercedes is pretty innovative to do that so for us obviously we're going to take the sheets back but like we said enjoy it you know if you can photograph it or write about us great making it personal also for the low-hanging fruit people it's important to relate yourself to the brand as the entrepreneur that was huge for us and it's still huge this day because people don't like to buy from companies or brands they like to buy from people so for us what's important is we have like that's very kind of like a Main Street approach to our business where it's like we're so nice to you and we're accommodating you and we're pointing you in the right direction with our products that you don't get that on the store and that's what differentiates us so I think if we could just replicate this over and over and over a thousands of times then it really the network effect kind of grows and grows and grows yep sure well again I would start with you you have to have a hypothesis of who they are right you have to know you're solving some sort of problem like nobody just starts a business they're like it's totally random right so it's about identifying what they're presently doing and where they are and why they're there you have to ask these questions and then you have to go out on the street and on the street so to say we did on going on the street but like you can do it online for serving like what the present solution is that you're substituting for is really what it is I can't tell you what that is because it's not like a that's not a secret it's like you should know that in your heart but of like who you're who you're arc typical customer and then once the company grows right like thinking about Apple right and with some guys in a garage that was like it was only if you if you've read anything or see anything but it's like they had this a community of like builders of like building their own pcs right this is true you could fact check me here on this right right in their garage and they would go around at trade parts yeah but as an Apple guy having them but it's a yes they would have like it was like these you know technology focused groups and you know they had a really good product they solved the problem for these people where they could you know substitute parts and all that stuff to go in there and then it eventually just grew to mass market because they solved such a problem so well for that focus group and that'll be like a great example of I'm saying it's like they're not going to go and open an Apple store to everybody right they had to start with like the core technology people and then once you get those people believing in it and then it grows from there so you have to like focus focus focus on who you're solving the problem for yeah I don't have like a direct answer with oh okay um you know questions here promptly I can yeah yeah yeah we're really message did you already have product yeah so you have to for Kickstarter you have a product we have very little money so we had we had enough money to make a video that was well produced so it's something else in the early stages it's like a fake it till you make it type mentality so nobody wants to buy from something that like looks crappy or looks unfinished especially if they're not your friends and family nobody to spend money on something they don't think like it's great solving the problem so for us having like a high production video and like really communicating the value propositions is really really important so we put our money into that to begin with that was in that was the proof of concept so our customers of really what it was so the way we did it this exercise that I keep like repeating over here is what are these people doing they go to the they don't they don't really know where they're going they go to Bed Bath Beyond and walk out there with something random so if I could just get in front of them and then push them to my area it's on me at that point they're in the net right so to say so it's like a meter like you know pull a fish out of the water and close the deal because so what we did then was in our case we had prototypes of sheets made we paid for it out of pocket we had about 100 sets we wrote handwritten notes to these editors so I spoke about before or bloggers we targeted who they were so we said we're going after these customers they read this publication we need to get in front of these people and we delivered it with handwritten notes to be exact to Vogue or communist cold and we actually got placements in about 35 of them which is really high conversion that they wrote about us and you could see it on our Kickstarter over there and that's like what gets the ball rolling and then you think about it at that point nobody wants to go eat at a restaurant it's nobody in there right so like you walk by and nobody wants to go in but you see a packed restaurant regardless of what they're they're selling for what cuisine is you want to go and see what it is so it's about creating that and that's why having a lot of it 360 degrees saturation when this stuff is really really important so people that don't know about you they believe it from a distance what's going on so that's really what we build but Kickstarter was like the test tube for that really tool for need requisition is I'm still the money that's a really for the background is that it's like often picked up or left summer of the cookie Holly I see that way yep but before that what we doing so before we could afford the subway or anything like that so we're sitting over thing that's a each have to go an organic route I'm sorry oh no I mean like the ads are really expensive there um but uh well the question is like what were we doing like for free or for cheap early on it's being humble and talking to people it's like the most important thing in square one it's you have to take feedback and iterate quickly so because again you have to be focused on this group of people that you're servicing and your key might not fit the lock from the get-go but you have to listen to their feedback if you if you know in your heart that it works even better if you're in that group because you understand it better but it's not you have to iterate really fast to make it work there the odds are you don't get we couldn't go back to the same people right be like on our sheets are better now trust us if we can come by the first time like it's never going to happen right here in one shot of it but the flip side of that is you make a first impression every single day to new people so you can iterate you could see if it works better another way and like continuously test don't think that you're married to any other to any one color product or anything you could constantly keep testing it but testing and talking is the way to do it really there's no silver bullet like we didn't have money like until recently like we built it all because we knew our margins you have to know your economics you know how much you can afford to pay and when you're growing you want to push as far as you can you want to pay as much well of course you want to pay as little you can per customer but your rope is essentially how far you have to go and you want to maximize that opportunity for yourself and every single one is different and like I said as that ball pings around right we pay for an impression on the subway then we pay for a click in Google then we pay for those ads you're seeing around on the retargeting and all the eat away at the margin we can make sure that all those touch points you know we're still making money on that so it's like understanding the full picture really how to do it and for some people a long consideration item you need a lot of information a lot of touch points it was something cheap and like a gag gift then it's pretty easy to communicate that and it's pretty cheap to do sure for sure depends on what you're doing but there's different tactics we've used so no matter what you're selling email is really really valuable in a really really important Channel most people myself included would be like I have I hate marketing emails and that stuff but like they really work with the general public and you have to understand we test of course timing cadence like everything on that so see like when the propria time is to deliver that message you know for you get really good at a certain amount of time right like there's snowstorms so we're sending comforters down product emails on those days because we know people are home and we know that's what they want to buy at that point to get smart but it's about being in the right places places and lurking around that stuff for partnerships so Harvick on that email we found with relatively cheap to convert people if we can get their email address so capturing it was one you have to offer them something in advance when you come to our site we offer you either a gift card or something or free shipping or some kind of incentives that we continuously test we get your email well then at that point we're just trying to like stay with you over time partnerships that we've done is something like sweepstakes at hope so we'll go to like-minded brands that are complementary and we'll say you email your list I'll email my list we put them in a pool whoever enters the sweeps and we split the email so we shared an elf not everyone signs up 5% people sign up but 5% of my lists I'll trade you for 5% of your list and hopefully I get some customers so you get some customers after that's like a good way to share similarly we've been approached by a lot of the mattress companies that are out there in the box mattress in a box and they all want to do like post purchase deals with those turns and so after you buy mattress we recommend this and and we work out a commission with them that make sense it's again knowing your economics and you know like what's beneficial to them it's meaningful they want to drive you business and what makes sense for you that you can make the sale so it's about really understanding economics of landscape like what your guardrails are I'm essence but those are also like touch points for us right so for customer journey types those that talking about here that person doesn't know about us they just bought a mattress from mattress in a box then they see us in the post purchase email or pop up and they went to our site Monica okay yeah I could use some sheets let me go shop around now we have to just saturate them they have to read our article if it's a see our ad is to see us everywhere and hopefully you know we hear this a lot and hopefully it happens often enough that it like someone's like oh my sister just bought or my brother just bought they're great or someone once you have that personal stuff gonna be easy at that point so it's about really getting those people and for us look we focused in as far as low-hanging fruit again that I said we went after our base was like in Brooklyn and like downtown Manhattan so we ran subway ads they are targeted first and we did like street team type stuff it's about just knowing where the most likely people are really Jessica didn't work on your game oh yeah um you know wheat the tough question on the spot actually no it's okay yeah yes it was there is there any channel that like just let it in and work for us for a customer acquisition not every channel were like look Instagram not that great honestly like it's a very photogenic item in stuff attract ability and Instagram its I'm very data-centric so if I can tracked where a cell comes from every one of those touch points I'll always put more money there because I know what's coming back if there's an element of unknown I don't so Instagram is great for engagement it's great for displaying your product but for scale it's not that huge because you're at the mercy of what your reach is or the influencers reaches and then only a small people actually purchase like if you're on stir gram like how often do you leave Instagram when you see something and do something else and so we put marketing dollars in there but that's what we found it's like most you'll see it's like huh okay we keep going great we need people to like move to us and it's like a very very tough proposition so Facebook's a little easier for that for that like forum because in like the newsfeed there's like all kinds of crap in there but when you see something a video that works and that stuff then people are more likely to click away and that's like I said it's one up you know we've tried every subway product pretty much at this point there's the brand trains there's like the single cards there's the station tailors and they all some work better than others really anecdotally we've heard that like the brand trains which is like the whole take over are great they crush for most brands for us they didn't crush so much the station's been better for us and then it's about understanding why it's like I'm packing that like in there's reasons it's like the creative the location you know and the habits of the people so once you're like drill down right like we're totally prospecting cold in Union Square when we put an ad up there most people probably didn't know who we were before them both important the messaging the little nuance things like the messaging is big enough and it's provocative enough that people take notice because in the subway there is moving you're walking in the cars you're sitting there and you reading right so it's like different mediums of communication the messaging has to be different in the value proposition has to be different right so we didn't nail it in the carves when people are sitting down reading but we nailed it when people were walking by and they saw like all the cool creatives and stuff so it's really about understanding the forum and that stuff iterative so you keep the good thing about like Facebook your Instagram or Pinterest is that you could constantly refresh it and keep trying stuff it's like always it's pretty easy tough question I think else guys um help me answer any questions Frank um so have you decided when to go to channel like if you're killing it on Facebook ads or do life when I was so strong on that like you're try so it acts which have an algorithm for firing off you never move on it sound like you abandon ship and move on you want to add to it and when it's you have like a complete funnel then everybody's seeing you everywhere so you're only trying to supplement it more it's really what it is you don't want to be like that I love to flat out didn't work then you abandon and move on right that's why you don't want to like gamble the whole company on like one thing before experimenting but you always want to add to it what's going to face book is the widest breadth of anything out there because they just have so many users that are engaged so much data so you can go as high as like as low as people that like you know in certain zip codes and that have bought our products or have liked our page to as broad as like you know have read a certain magazine once upon a time like really and it's like cheap for those people but you're not going to get a lot of conversions so you have to like find that equilibrium but you're always trying to supplement it because once they with retargeting particularly it grows proportionally with the rest of your business right the more people you can fill the funnel it's that bucket lift then retargeting just kind of goes on cruise control in all these channels you got to make sure it's like robust around whatever channel around you make sure your bases are covered but it's about the first touch point of cooking them which is really important with with additional you guys know what I mean by cooking stuff everybody know that okay you know no no it's fine it's fine I know that was a question or like I didn't know so when you cookie somebody put a pixel on their their browser essentially when they hit your site then you know that they're on their site and that way like depending on the ad platform you can retarget them and show that person ads that are relevant so if you are on a product page and you were looking at blue sheets we would hope that the ads you're going to see around or a blue it's on the internet because you were expressed interest in that and that's like you were cookie at that point there was a pixel on our site that marks you that you're interested and that happens automatically you'll notice it actually in Safari on mobile it's a lot of sites show you on the bottom of the Chur and there's like a warning on it nowadays but that's important because now you can keep telling that message in different ways to the same person cookies last I think maximum six months I think they can that last but like if they don't you know you're buying cycle at a certain point you know people aren't going to transact if for some brands in one day in some two weeks or month whatever it is don't you think about a car versus cheats right like those people have to really work you for a month you know get to the dealer you read about our report do this so if it's like all this stuff they're trying to throw at you and they were throwing to you because you expressed interest and it's the cookie at work make sense so Google AdWords is one every single platform has its own pixel that it goes on the site and then you cookie them with that so we cookie you with everything Facebook Pinterest Instagram like every single one and it's a code snippet for retargeting because it's on there so you can see it's the models built that it's cheaper they let you market cheaper to somebody that's genuinely shown interest and the genuinely shown interest is having been to your site then so like someone totally random it's more expensive because irrelevant it might be irrelevant to them and odds are that's a big part and then you could tell the story at 360 degrees but again that's like the bottom of the funnel where they're on the site and you've kook heed them and you've already gotten them there but you have all these channels that are like how do you get them down to the site is like your challenge and you have to tell the story in your way that's relevant to your customers that's like building that bomb so most important thing like if you some Instagram might work really well right like really it's not stuff that's very very visual or the people you know they call it thumb Stoppers right like if you creative that that does that and then it's easier if you're selling something that's not easy to like show necessarily but that becomes more challenging about your channel you need someone to write about it and if you can't get that organically then ain't got to pay someone to do it in that point here's here's a great example actually on that note they'd like change the business at one point any of you heard of the cup of the site uncrate relations where it's like a very male driven site of like gadgets and gear trying to inspire you random things to buy we tried for ever to get on there to be like the issues are the best style counts I think we gifted them to all to everyone in the uncrate office it's the small teams right like 10 people never wrote about us we ended up offering to pay and it was I don't remember this was almost years ago at this point was to grant I want to say something like that which is a lot to pay for someone to do it with nothing to come in but I knew if I sold to this many off them and like you have to know your numbers on that so your conversion rate on the site that's whoever comes in what percentage are going to purchase how many users are they going to push to your site once there click through an engagement it's an all these metrics and you get kind of back into if it's a worthwhile deal for you so for us it was a gamble $2,000 we did it but we crushed it actually that day it was huge and way exceeded expectations and then we got a few hundred new customers that we like milked for like referral codes and everything to make sure they tell one other person and business has doubled double the doubles at that point from that it was like most kind of a turning point where you figured out that like you can buy in certain places like a certain type of media I would choose finder mushroom [Music] some tell you the laptop yes how do we get there metrics so you can look at tools like similar web it's a really good tool for that if you guys don't know that is it's something really really valuable to go to similar web comm or download the widget the Chrome extension and you could see a lot of data from sites to see if they're lying to you but usually they're they're trying to sell to you so they want to tell you how great it is so they'll give you the metrics most of the time but they're not always accurate in a large scale a big buy if they're marginally off like if they say click-through is half a percent but it's actually a quarter percent that like makes a huge difference right if we're talking about a million impressions it's like a huge difference so you have to make sure that like your worst case scenario is is still okay for you because nobody's showing you their Google Analytics like that's not going to happen sure sure so in uncrate example right well now we've got on great a few times now we really know how they're but when you have sites or audiences that are big enough you know how they behave at a certain point so with UNCHR a for instance like the first time was a gamble but they told us we get a million people per month or all use round numbers and genuinely generally they click through 5% we'll click through to a page two and then get like the full page on the item of the people that click through to that page one percent will click through to the site so we did the math a million to five percent so 1% of that that's the amount of people on our site then once they're on our site we know that we generally convert whatever was at the time when you've lower traffic your conversion rate should be higher but call it 5% at that point so you know anyone that comes into your site five percent of them will purchase so when you see if it makes sense to the more traffic you drive that conversion rate goes down and down and down because the funnel gets bigger and it's less qualified traffic so you want to focus the most qualified traffic and sometimes that's the most expensive but it works really you'd rather have the most qualified traffic at that point we focus all whenever you probably markets Facebook abject people out there and with that channel we do like affinity stuff like that but it's not the best way to target on Facebook honestly like it's pretty loose like you for like people that like furniture or stuff like that or like you know certain publication doesn't generally work so well look like are really really really really critical so once your business built steam you have access to look-alikes so you can either look like your own audience or your own email list or something there's a common thread of anyone that's been interacting with you at some point you have to assume that they all wanted something from what you offered and they ended up on your site subway so if you luckily if you capture you know a thousand emails you can actually Facebook probably needs more this one maybe 5,000 emails or so you can put that into Facebook and then it'll give you a million people that behave the same way as those 5,000 people and those people are the most likely to convert you know theoretically they are because they share whatever it is this is a black box of Facebook but they share some threads of commonalities with the people that already were at your site and interacted with you that's that's generally better than just random affinity groups now let's let's say like a shortcut for you guys right but like I did it when we started I was like if they like IKEA and create in barrel I was like taking all these guesses right they just didn't work well with that stuff like you have to like accent on something a little more tangible Lenin's problem I guess guys I know some something to it by gathering those people like answer me yes so they really care about those people and let them try their project went up past conversion and some of them may do it you have to start with the most as I said how he gets like the influencers and people like that to advocate for you but honestly when we first first started on a birthday of Kickstarter it comes down to your friends and family people to you have to beg people to like advocate for you to be humble so what we did was to our family and every friend we had we said look if you just click the share button and Facebook you know that's like the most valuable button of all like it's great but like you don't get the breath maybe able to share it because then the shares in their entire network right so if you get a few people to do that all of a sudden you're in several networks of people and you know the people here don't know the people here so you're wider at that point but it's about going to them on a one-by-one basis sometimes and saying share share and like interact with it so you get that network spent so it's wide enough because you can only do so much of talking to people right you need it to get in front of the appropriate people and for us it was friends and family first and then influencers that were like super targeted and now we try a little broader stuff like like out of home stuff which is subway or billboards like that's wider but I wouldn't do that randomly that supplements the other stuff we Leon so if we didn't have a way to read it and we didn't know our metrics and the other channels then then it would be irrelevant so you have to kind of start small and focus and get feedback talk to the customers can't stress that enough your friend Andrea I'll be following you gotta find who is and really penetrates them be humble and talk talk and could communicate your value proposition and ask him would they solve a problem for you and not in those words but like you know is it something you'd be interested in you know you need to really go after you know again when we did like the market sizing exercises the reason why we like this business and we thought it was a good opportunity because our market is huge and everybody is a potential customer right but like you know if you have we've done this with other companies I mean I'm just gonna blind predict a fitness apparel company right like you don't want to target like obese people right you're wasting your time right you want to target like people that are into fitness that would be like you know it embrace your products you have to find those people whether they're not friends or family necessarily but you have to like go hunting where those people are and figure out what they're doing now and how you could get your product in front of them to try at least and if the product is good and they're willing to try it it should take care of itself theoretically it should are there any other game changers flexible I mentioned we're having a no $2,000 yeah there there been a few like checkpoints like that's on the flip side that was uncrate even bigger one was when we were on the skin so that was entirely different demo this is before they even had a revenue model I was lucky with the timing and everything so I said to them plug I know we have an overlapping audience just based on my surveying and everything I know they'd be interested in this so I worked out a deal with them of a revenue share on that I said plug the product and I'll give you X percent of sales that come through that you have to be able to track it you can use links to be able to track this stuff but I made it mutually beneficial for us and yeah that's another thing is like when you're going after if you especially like the early adopters we stuff you got to offer them something like nobody wants to do strangers or anything favor out of the blue you have to give them something for free or some kind of value proposition right this happens more often than not on our site so you go to Amazon you prime there's free shipping and everything else people are accustomed to do that our site does not have free shipping but if you give us your email address you get free shipping you know what no one wants to pay for shipping so everybody gets us our you know their email address the end of the day we're in the same spot except we have everybody's email address in the room the way we did it so you need to trade something at some point to uh need to really get them to embrace you no one want to be your favor so in that case it was a revenue share because it's about knowing your audience so skin is like millennial predominately females very engaged audience and you know we thought it would be a good good idea but we have to offer them something to make it worthwhile for them no there's no like hard and fast to rule on it really it depends does the answer some have been great like when we did the skin it was great where she did the skin a second time and it was not so great because there's fatigue certain audiences they already saw who we were and it wasn't a surprise at that point same thing certain mattress companies like we've integrated with it's not necessarily worth like the volume isn't worth it every sale is worth it and we appreciate every customer we have but like setting up landing pages that certainly these relationships require messaging you know we send an email they send an email to build a landing page and experience on the site so now for one sale and day for us it might not be worth the time of the resources it requires so it depends how big the opportunity is and you have to kind of evaluate that so the cost benefit analysis somebody who's so it goes

Channel: NYU Entrepreneurial Institute (Leslie eLab)

Views: 6,990

Rating: 4.9452057 out of 5

Keywords: NYU, NYU Entrepreneurial Institute, Startup School

Id: PmzoQeHQ_KI

Length: 57min 43sec (3463 seconds)

Published: Fri Jun 23 2017