In this podcast, we talk to Vincent Bourzeix, the Chief Marketing Officer of Try The World, a gourmet food subscription box that curates tastes from around the world.
Find out how he took his subscription service from 500 to 50,000 customers.
In this episode, you'll learn:
- The benefits of offering an annual subscription plan
- How they use Facebook Lookalike audiences to target their ads
- What is churn rate and why it will be crazy at the beginning and stabilize over time.
Listen to Shopify Masters below…
Show notes:
- Store:Try The World
- Social Profiles:Facebook,Instagram,Twitter
- Recommended:Chargify,Simon Data,Stripe
Transcription
Felix: Today I’m joined by Vincent Bourzeix from TryTheWorld.com. Try the World is a gourmet food subscription box from around the world and was started in 2014 and based out of New York, New York. Welcome, Vincent.
Vincent: Thank you so much for having me, Felix.
Felix: Tell us a little bit more about the store, well, I guess the subscription box and what kind of products are in them. I guess they change every month but I guess, the gist of it. What do you usually include in each box?
Vincent: Yeah, yeah, thank you so much for asking me this. Basically, every box is centered around a country and it comes with seven to eight gourmet products. In there, you’ll find both snacks but also cooking elements and you’ll always have a beverage as well. Every box comes with a culture guide where you can find more information about each of the products. You can learn a lot about the artisans that are making them.
你也有推荐的食谱chefs that are creating the boxes. For each of our boxes, we collaborate with the [inaudible ] chefs. For example, right now, we’re doing Portugal and the box has been created by Chef George Mendes who has a Michelin Star restaurant in New York City. In this guide you have recipes made by the chefs and you also have the reason why he picked all of these products.
Vincent: Yeah, sure, so the [inaudible 0:02:36] founders, that were both at Columbia University doing grad school, kind of shared a passion for both food and travel. After doing an incubator at Google where they also looked at the subscription box model that was getting very popular three years ago with companies such as Birch Box and Bird Box, they decided that they wanted to put kind of the each country in a box.
当你考虑去度假country, you’re mostly thinking about experiencing the food and the art. It’s obviously easier to put a gourmet product than big painting in a box so they basically chose the food angle. You also have to take into consideration that online food is the second fastest growing ecommerce after fashion. You had these two trends that kind of converged to create this unique product that is Try the World that provides the best gourmet product from around the world to your door.
It’s very important to notice that 90 % of the product that we put in our boxes are not available yet in the U.S. so it’s really about finding the local artisan, what the local really eats, and really working with these unique producers to bring their amazing product in the U.S.
Felix:是啊,这不是一个问题,但我真的很喜欢the idea of you including more information about the products inside the box, because that ... You want to ... When you send these boxes [inaudible 0:04:15] subscribe to a few different boxes and that’s usually one of the best parts, is learning more about what am I actually getting. I don’t want to just get the products inside the box. I want to learn more about where it came from and all the stuff you describe makes a lot of sense
I think that anybody out there that is thinking about getting into subscription boxes or already are selling them, definitely include more information, like what is the story behind it. Because it makes it much more enjoyable, at least for me personally, to open up a box and then see, wow, this is like I’m learning all about these things and there’s actually a story behind this box. It makes me look forward to the next one, so cool.
You mentioned that you were going to grad school you said that you had cofounders that you were, I guess, brainstorming this idea with at Columbia University. Then, after grad school, you went in to an incubator at Google. Was that the next step?
Vincent: Yeah. Yeah, there was an incubator at Google, then another incubator at the Columbia Entrepreneurship Center. Then there was a first round of fundraising that was about a bit more than 18 months ago. Then that’s really when we were able to recruit full-time talent and were able to invest more in marketing and really start growing the subscription very, very fast.
Since then, to give you an idea of the scale back then, in summer 2015 we had about 500 subscribers and we grew that ... 2014 ... and we grew that to, in 18 months, to more than 15,000 subscribers. We [inaudible 0:05:52] very fast. That was very interesting.
Felix: Yeah, that’s definitely amazing growth. When you were incubating at Google then at Columbia, were you incubating the Try the World idea or was it something else at that time?
Vincent: No, it was the Try the World idea. It was like building the first box. It was trying to figure out the fulfillment center situation, trying to figure out the first roast channel and also fundraising the first [inaudible 0:06:21].
Felix:敬畏ome, so how long were you at these two incubators?
Vincent: These two incubators [inaudible 0:06:26]. I was not there personally but these two incubators lasted for three months each.
Felix: I think this is an interesting idea. Not many guests that I have on have gone incubator route but it certainly seemed to help you gusys out a lot. How did you get into an incubator? How do you find the right one for your business, your business idea, and then how do you get a ... What have you done? Not what have you done but any tips on how to get accepted into an incubator because it is a selection process, an application process? Not everybody that wants to get in will get in.
Vincent: Yeah. No, I think the cofounders, Ken and David, were first at were at Columbia University so it was easy for them to get into the Columbia Entrepreneurship Center as it is very helpful and trying to be very, very active to help the New York startup environment to really grow extremely fast. Then it’s about really pitching, not only an idea that is amazing and exciting, but that also makes a lot of sense in a business sense. It’s also about having a very robust business model.
Felix: If you want to get into an incubator, do you need to have revenue already? Or how much of your business needs to be developed before it makes sense to even approach an incubator?
Vincent:这实际上取决于孵化器。为the example of Columbia, that I know a bit better, there is no need of having already revenue. They take ideas at different stages. Some of them are really, really at the very basics and it’s all about building the website or building the interface and launching the MVP. For some of them revenue already exists and they’re a bit more advanced, so it really depend on the incubator.
Felix: Makes sense. When you are inside an incubator, for anyone that’s not well-versed in it or had never been in an incubator or incubator space, what goes on there? Do you just have an office? Do you work by yourself? Are there mentors? What is the, I guess, benefits of being in an incubator rather than just working on your own?
Vincent:是的,所以不同的资源给出to you. Some of them are office spaces. As you said, usually in this incubator was like five to ten other startups. [inaudible 0:08:41] different resources. They have resources available for you but, on top of that, there is a lot of mentoring that goes on. It’s a lot of former entrepreneurs that went through these incubators, also lot of introductions to people that are close to the incubator. You can think about investors obviously but also resources on the marketing side, on the technology side, on the operational and logistics side.
It’s really ... it helps. It’s really an incubator. It’s really to help accelerate Googles and I think that it can be very beneficial for a young startup, especially for people for whom it’s the first time that they build a startup. I think it’s very helpful to go through an incubator.
Felix: Yeah, and usually, when I hear the word incubator, I think about technology incubators, people that are building software apps or platforms that are technology driven. Are there incubators specific for ecommerce or, if you have an ecommerce store, does it still make sense to apply to an incubator that seems to ... When you say Google, I think, “Oh, it must be a technology incubator but you guys are ... When I think of you guys, you guys are ecommerce, so.
Vincent: Yeah, absolutely. On the ... I think it’s also that the kind of culture and different coasts. On the east coast, the startup community is very much around ecommerce for a lot of it so there are incubators that accept more ecommerce type of startups versus maybe on the west coast where it’s more technology-centric. I think that maybe something that is at play here but, once again, it really depends on the incubator.
Felix: Very cool, and for your particular case, and you don’t have to go in to any details or anything but, are there, I guess stipula ... what’s the stipulation? Are they taking a percentage of the company if you go with this incubator, or is it just free space and free mentorship? What’s the , I guess, the tradeoff?
Vincent: Usually, there is a lot of free space and free mentorship. In the case of Columbia, they’re really trying to build kind of a pool of successful startups from Columbia University, especially on the business school side. So there, it’s really for them to build a community of entrepreneur from that school source. [inaudible 0:10:56] network I think of entrepreneur.
Then, for Google, I think it’s also showing the value of the Google products for their startup community. They can be very helpful there. They are very scalable, so I think it’s also getting business in the long run for places like Google.
Felix: That makes sense so, with the Google incubator, what, I guess ... You said that they wanted to that [inaudible 0:11:19] incubator space to encourage people to use more of their products. What specific products were you using at that time that made your company, I guess, attractive to them?
Vincent: I don’t know about then but today we’re still using most of Google softwares in our day-to-day life and it can be like the simple calendar, Gmail, Drive. This is like the environment that we use on a daily basis, so from that standpoint, I think that we’re successful.
Felix对,是有意义的。酷,所以你说你们pent two, I guess, sessions in two different incubators. After that, or during the end of the second one, you were working on the fundraising. You said 18 months ago. What was that experience like?
Vincent: I think it’s a lot about networking, meeting with a lot of people and really convincing them that you have not only a viable product that can generate revenue but also a good vision on the longer end on where to take this project to the next level. Then it’s really about finding the right partners that can also give mentoring, I think, that can give contacts, that it can really contribute to the project and be a good fit that can help you grow.
Felix: Right, so I think most of the listeners probably also don’t go down this fundraising route. When does it ... I guess, how do you determine if it makes sense to go down a fundraising route versus just self-funding it yourself?
Vincent: Yeah, I think it depends a lot on how you’re thinking about growth. I think we had very high growth objectives and the only way to scale very fast was to be able to do investments that were heavy, not only on the product side obviously but also on the marketing side. That justified fundraising, because we could have been a sustainable small business but we had high ambitions and we wanted to kind of scale quickly our model, so then it becomes kind of necessary to do the first round of fundraising.
Felix: That makes sense. Do you think that this is specific to businesses that want to create a subscription box? Does something about that business make it more capital intense?
Vincent: It makes it kind of intense a little bit in the beginning but, to be honest, it’s an interesting model that allows you to also get recurring customers. It can be expensive for our customers but then you usually are able to keep them in the long run, so it’s an interesting business model that requires some investments. A lot of times on the product side if you need to source the product a long time in advance, which is our case, but it’s, again, a case by case scenario and it depend a lot on the sourcing facilities that you have and what type of product that you’re selling in your box.
Felix: For anyone that does want to go down a fundraising route, you said that a lot of it is just a lot of networking, a lot of meetings, a lot of, I guess to some degrees, pitching your product and your idea. What is, I guess, the very first steps if someone wants to go down that route? Is it just developing a network? What do you recommend someone that maybe doesn’t have a network and wants to start a business that does require them to fundraise? What are the beginning steps for that?
Vincent:是的,当然。No, it’s as you said, it’s really beginning to develop a network of people that can introduce you to different individual investors for us. For example, through the Columbia Alumni Network we were able to meet with a lot of people. The Columbia Entrepreneurship Center also invested in Try the World in the first place so it was very helpful for us to convince other individual investors to join in the [inaudible 0:15:16]. It’s definitely a lot about network and finding people that trusts you even more than your idea and that are willing to really take a bet on you and your idea.
Felix: Yeah, I’ve heard that before and it’s interesting that sometimes the team or the founder matters a lot more than the product itself. Can you say more about that? What is it? What are they looking for, I guess, in a person that makes it their sole foc ... not sole focus but the primary focus rather than on the business itself?
Vincent: Yeah, for sure, I think and I definitely agree with you, that people look more for talent than for an idea. I think that, even if you think about Try the World, I think that the reason why we were able to scale very fast is mostly because it’s the talents that were in the company and that executed perfectly the strategy that went in place. Then, what are the qualities that investors are looking for? I think it’s good to have some previous startup experience. I think it’s [inaudible 0:16:26] I think in the New York area that they can have consulting financial backgrounds in the first place. Kind of popular among investors given that a lot of investors are themselves very much from the financial industry. I would say it’s very much a case by case scenario but you have an edge if you’ve already built a company in the past for sure.
Felix:太棒了,所以我想谈谈并用gin for this idea. You mentioned that there were these trends that you guys recognized, that the subscription model was becoming more familiar, more and more popular by the big brands. Like you mentioned Birch Box, Bark Box another really big popular one too. You also recognized that more people are buying food online. Was there some kind of process to recognized these trends, for someone out there that is thinking about starting a business or maybe in the early stages and wants to make sure that they catch kind of like a wave of, I guess, rising interests or trends like you guys were able to catch? How do you recognize these things coming? Are you doing anything in particular to, I guess, be able to see these trends coming?
Vincent: Yeah, there’s a lot of market research to be done, to be honest, to make sure that you’re on the right path and you find the right trend. A lot of [inaudible 0:17:48] analysis coming from different places, going online on different publication. Even, for example, a place like Chargify, which is an app that works for Shopify that we use for recurring billing. It’s publishing a lot of very interesting articles a lot on the subscription box model. It’s a lot about reading all of the literature that’s out there to make sure you isolate the signal versus the noise about the product that you’re trying to put together. Yeah, it’s a long process to be honest to make sure that you identify the right need.
Felix: For this kind of market research, are there specific websites or tools you recommend people check out or use to do their research?
Vincent: You have a few. It depends on how much access you have. You can do a ... I honestly recommend going on Boost, like Generate [inaudible 0:18:39] and say do a research on Google on your product and on the market studies that exist. If you can afford some $10,000 market studies that are published by famous companies it’s good, but if you can’t, another good way is also to talk to leaders in the industry or influencers going to talks, conferences about your product to be able to meet with people that are actually doing the work in the field that you are interested in.
Felix: Okay, that makes sense. The tools and the websites sound like they’re really expensive for anyone that’s starting out. Maybe outside their budget but a good way to, I guess, attack this qualitatively is just to immerse yourself in the community. Talk to the influencers, the people that are already making progress or working in the industry. Yeah, that makes sense because they usually will have a higher level view. They have the experience already. You might as well hear from them directly, the people that are already inside the industry.
Cool, so let’s talk a little bit about the growth. You said you went from 500 to 50,000 subscribers. What was that, over a year?
Vincent: It was, yeah, pretty much over a bit more than a year, like 15 months.
Felix: Wow, that’s amazing. What do you guys, I guess, credit the growth of that to?
Vincent: I think it was both a very good market fit. I think we created a product that was really popular and really kind of almost viral. People were sharing it almost naturally but we also had a very efficient paid marketing strategy where we relied a lot on digital marketing to where it’s going to fuel the growth.
Felix:敬畏ome, so let’s talk a little bit about the marketing strategy. Is the marketing ... I’m not sure how much experience you have outside of the subscription box service but do you find that the marketing is going to be different when you are predominately selling a subscription box versus a more traditional ecommerce store?
Vincent:
I think that the advantage that you have when you’re selling a subscription box is a longer average lifetime value because of the inherent nature of the subscription to renewal. You would have more retention compared to an generic ecommerce where more people come for just one or two buys. Usually that allows you to have a higher cost per acquisition. A higher cost per acquisition gives you more room for testing and scaling so I think that the subscription box model has this advantage.
Now I think, though, the places to recruit subscribers are usually more depending on the types of product that you’re selling. For example, for us, Google AdWords is not a big source of traffic and of revenue, because there is not so much intent for a product like Try the World. Nobody’s, unfortunately, yet looking for a subscription box with gourmet food from around the world. It’s more on places such as Facebook or Pinterest that we’re able to get people excited about our product with very nice visual and interesting offers.
Felix:敬畏ome, yeah, I think that makes sense, what you’re saying about subscription services. Because there’s that repeat purchase, the lifetime value of the customer is higher which means that you can invest more and also test more with the kind of ads that you’re running.
Were you able to identify the lifetime value before you started investing in these PPC campaigns? How did you know how much you had to, I guess, play with to acquire a customer?
Vincent: That’s an excellent question and it’s very difficult for any subscription box model to model the lifetime value of your customers. You have to make pretty strong assumptions to be honest, especially in the beginning. We also launched different plans that allowed us to kind of get a better preview of how long people would stay. We launched about like ... Again, about 15 to 18 months ago, we launched plans that were semi-annual and annual. Here thanks to this plan we have more security in terms of revenue on the long run and in terms of lifetime value. That represented a big amount of the new subscribers that came in so it was actually a very helpful move.
Felix: I like that. I want to talk about this more. [Inaudible 0:23:13] discussion again, really popular in the software kind of SaaS world of subscription services where it’s annual versus monthly. Can you talk a little bit more about this, what the benefits are with offering also a annual, I guess, plan? They basically have to pay everything upfront, is that correct?
Vincent: Exactly, that’s absolutely correct but, because you have more security on how long this person is going to stay, we’re also able to giving them better value. Usually what every SaaS or even subscription box does is, if you susbscribe for a year instead of a month, if you commit for a year instead of for a month, we’ll give you a certain amount of discount. Those discounts can go from 15 % to 30/40 %. This is actually a very good value, both for the customer and for the business. It’s really clearly a win-win situation.
Felix: Yeah, I think that makes sense but, can you say a little bit more about why it benefits the customer as well. I think what you’re getting at is that now you have the kind of cash up front that you can now reinvest into the business a little bit sooner. Which obviously will benefit the customer as well. Is that what you’re getting at or can you say more about why it benefits the customer, for anyone out there?
Vincent: On the customer’s side, let’s take the example of Try the World. If you subscribe for the monthly plan, you pay $39/month per box. If you subscribe annually you pay $29 per box. You’re saving $10, you’re saving 25 % on every box you receive, so you’re getting amazing value out of this. On the business side, we’re getting more revenue upfront so it gives us more possibilities to invest and continue to invest both on the product side and continue to invest on the marketing side to continue acquiring new subscribers.
Felix: Do you sell these annual plans right off the bat? I’m looking at it now. It looks like you buy ... You’re saying it’s $29 per box if I subscribe for 12 months or $39 per box if I just subscribe monthly. You also have a six month plan as well. Do people come in and say, “Let me just buy the annual plan right off the bat, or do you usually have to upsell them after they’ve been on the monthly plan for a while?
Vincent: That’s a very good question. We have a lot of people, between 30 and 40 % that subscribe for long-term subscriptions, so more than a ...
Felix: Wow.
Vincent: ... one box at a time, depending on the months. Then we’re also offer them to upgrade once they’ve been subscribers for a while. We kind of make it so that they’re getting refunded for the extra that they may’ve paid in the past. It’s really good value to upgrade as well.
Felix: That’s awesome. I think that, at least as a customer, that makes sense to me. I might not commit to paying over, I guess, it’s almost over $300 right off the bat but if I got to try the product out for a while and really understand the value of it, then I might be much more likely to say, “Let me save some money. Let me subscribe to annual plan because I plan on being on it for a while anyway.” That makes a lot of sense.
Cool, so let’s talk about the other, I guess, the strategies itself with PPC. You said Google AdWords didn’t work out too well because not many people are searching for Try the World subscription boxes. You said Facebook and Pinterest worked for you. Were you doing ads through there or is it just the organic kind of posting on social media? Or were you buying ads through Facebook and Pinterest?
Vincent: Yeah, yeah, yeah. No, no, no, thank you for asking this. We do a lot of ... We do paid campaigns as well as ... Obviously, we have a strong following. We have about 150,000 followers on Facebook only so we have a strong following. We’re also doing paid media, on Facebook especially. There, we’ve been developing strategies, working in conjunction with Facebook, for more than 18 months. l that’s kind of our biggest driver of growth historically.
There we developed a lot of strategies on different content and different audiences we’re able to target, because the kind of trends and power of Facebook, the really competitive advantage is the quality of the targeting. There are many strategies that are helpful for different businesses.
Felix: Let’s talk about. Let’s say someone wants to launch a marketing campaign on Facebook and maybe they are also interested in selling subscription service. What do these ads that you guys create look like and how do you determine who to target with these ads?
Vincent: Yeah, so basically we have two main type of campaigns, some that use lookalike audiences as you mentioned and some that don’t. If you first look at lookalike audiences ...
Before we go into more detail, the definition of this is basically you’re able on Facebook to upload a list of email addresses. Let’s say you have 10,000 customers. You include the 10,000 customers onto Facebook with their email addresses and Facebook is going to be able to match them with Facebook accounts for 2/3 of them. Then, with this 2/3 of accounts based on your customers, they’re going to be able to create an audience of 2 million to 20 million people that you will be able to target and that will be the closest people to your subscribers, to the people that you uploaded the email addresses of. This is a very powerful tool where basically Facebook does the job with regard to finding the best people, the people that are mostly likely to buy your product. This is something that is very powerful, very scalable.
Then, as I was saying, you have different sizes of lookalikes. You can go for what is called a 1 %. You can do a targeting of 1 % lookalike that’s going to be very close to your subscribers, so really, really high quality leads. On these people, you can be very aggressive. You can have an objective of only having them to click to your site and then your site is supposed to be able to convert them. Versus on the larger audience of 10 %, which would be between 20 and 25 million people, if you target the U.S. There you need to be probably a bit more conservative in the type of bidding and budgeting that you do. That’s where usually it’s recommended to have an objective that is not click to the site but conversions on the site.
Facebook advertising offers different type of objectives that will allow you to scale at different levels and the bigger the audience, the more you should go towards a conversion optimized type of campaign.
Felix: Yeah, that makes sense that, if the audience is larger, you might not have everybody that’s your target customer. You want to be more conservative about the one you pay, only pay when you have a conversion or whatever the objective is. Why not also apply that to the smaller audience that is target? What are the downsides of having a ... only paying per conversion for something that’s smaller?
Vincent: Yeah, absolutely. It’s the scale basically. It’s that, if you pay per conversion on a smaller audience, you will not be able to show your ads to as many people as if you were doing a CPC campaign. It’s basically, if you have a smaller objective, you should almost always do targeting towards conversion. If you want to scale faster and have more spending, sometimes you have to move towards less conservative bidding and bidding on the clicks.
Felix: I see, because Facebook will ... The algorithm will optimize for conversions which means that, if you have a smaller audience and if you’re targeting or if you only want to pay for conversions, they’re going to diminish the kind of pool of audience to show your ads to. Cool.
Also, so let’s talk a little bit about the Pinterest strategy, then. What is the strategy over there?
Vincent: Yeah, so Pinterest launched an advertising platform about almost a year ago now. We were in [inaudible 0:31:23] in the first place. Basically this is a very new platform that has a very interesting demographic, a lot of women looking for travel, food, fashion, creating boards. There is a lot of saved pins that people keep. It’s like they keep this product in mind for the future. It’s a very different platform but also very interesting for us, because of the demographic. There, it’s pretty much the same story as Facebook even though the [inaudible 0:31:55] is much simpler.
为example, you don’t have video. You don’t have many different formats. It’s basically pins that will be sponsored pins and over there you choose both the image and the text. What is very popular over there, if you want to get some [surability 0:32:15], is doing a content heavy post. Let’s say for Try the World it would be like developing a recipe or a how it work type of pin that is linked to a longer article. Those are very popular. You can also work on the more offer side where you would give an offer on the ad directly.
Felix: I see, so you have two strategies.
Vincent: Yep.
Felix: One is more like content marketing based where you say, “Hey, there’s a recipe for” whatever it is and then they click on it. It brings them to your site, which then has the recipe and then that’s when they get exposed to your brand. The other way is to actually try to get them to click to a product page or a category page. Where are you driving them to with the more, I guess, aggressive approach to advertising on Pinterest?
Vincent: Yeah, absolutely. Usually, we have some landing pages that we developed specifically for different platforms and for different offers. One of our popular offers to get a ... When you subscribe, you’re able to get a free Paris box. Historically it was a Paris box, with your initial box, so you get two boxes the first month. That was a very popular offer that we ran for a long time and we would send ... For example, we would have this offer on Pinterest that would say, if you subscribe today you can get a free box. Then it would lead them to our landing page where you would have a few more call to action and a checkout.
Felix:
Awesome. Do you think Pinterest makes sense for every industry? Can it work outside of food, outside of fashion? Can you also make this work even if you’re not in those industries? What do you think?
Vincent: That’s a great question. I think that, given the demographic and the parameters of the platform, you would find most success with product to consumer groups that people can buy, but it can also be like even electronics or these things. I think, if you have a headset to sell, I think it can work out well but, if you have a SaaS for example, I think it would be much more complicated to start there.
Felix: Okay, so basically, if you have a product that you’re selling directly to consumers, it works well. If you’re selling to business, Pinterest probably doesn’t work as well.
Cool, so let’s talk more a little bit about the subscription service. I think one big ... and I want to get into the analytics in a second but, I think one of the big data points you might look at or you probably look at is related to churn. Can you maybe explain to the audience what is churn and ... Yeah, we’ll start there.
Vincent: Basically, churn is on a ... We look at it on a monthly basis. It’s the amount of people that cancel their subscription. Which is an extremely important variable to look at, because you spend a lot of time and money to acquire someone to join your subscription so you want them to be happy and to stay with you as long as possible. It’s very important to measure the churn and the actions that you can take to make basically the customer happier, every time you send him a box in our case, so that we have less and less churn in the long run.
Felix: Oh, yeah, can you say more about that? I think that that’s probably the biggest concern is that you launch a subscription service and then the biggest fear is that, if someone buys it for one month and then all of a sudden cancels it. What do you do and that you include in the box or like what do you do for the customer to make them say, “Let me stick around for another month?”
Vincent:是的,当然。首先,我们开发更多more content to make sure they have the possibility to really enjoy each and every product that they receive in the box. To give you an idea, we developed a series of videos to show them different recipes that are made directly by the chef in front of them, kind of an extension of the experience online, not only with the culture guide that we include in the box. We’re trying to always provide more content, always provide more value.
We also have a big focus on listening to our customers. There it’s like, after each box that you receive, we’ll send you a survey so that all of our subscribers can tell us which are the product that they really love and what would they need in the next box to make them even happier, et cetera, et cetera. It’s always, so, being very attentive to what the customer is saying and how the customer is feeling about the product.
Finally, I would say that there are small initiatives that matter a lot to the customer. It’s sending them a postcard once in a while. It’s sending them a special offer that is only for subscribers. We recently launched a program where, for every country that we do, we actually send two of our, a couple of our subscribers, to the country so that they can actually experience the cuisine over there by themselves. It’s always trying to innovate and make our community happier and happier.
Felix: Yeah, I like that. I think that this is a really important point. When you focus on your products and you focus on creating really great products, that does go a certain distance to keeping people around. The subscription services that I’m a part of, whether they are products like yours or software that I use, what really gets me to stick around is that they spend a lot of time after I get my box or my subscription, not necessarily teasing me but in helping me build anticipation for what’s coming next.
I think that that’s what keeps people coming back over and over again is that they think, “Oh, man, I can’t wait for what’s coming next month because not only ... It’s great what I have now but then maybe you guys are putting out is encouraging me to stick around to get that next box.” I think that’s a important point. No, don’t just work on the products but then also work on ... Almost like you’re building anticipation for the next box with your customers.
Do you find that ... I have a question from one of the listeners in my Facebook group where they are asking. They just launched a subscription box as well and her numbers are all over the place, 10 to 40 % churn depending on which month. Does this kind of stuff stabilize over time? Was it like this for you guys early on too, where things are jumping all over the place and then over time you were able to bring that down? What was the experience early on for you?
Vincent: Yeah, definitely. You have your two elements, both when you scale and you have both more months and more historical data but you also have more statistical significant cohorts. You have more people in each of the cohort. If you have 10 people that subscribed last month and 15 this month, and you’re looking at churn, it’s not really statistically significant so it’s very, very hard to use this as a source of data to define churn or even acquisition and customer acquisition.
Felix: Makes a lot of sense. Let’s talk about the procurement process. I think one of the challenges with a subscription box service, especially if you are starting off by yourself or you have a very small team, is that you’re not just creating one product and then focusing all your attention on the marketing. You’re creating a product, focusing on a market and then next month you got to basically put out new products again. What is the process like? How do you make sure that you’re able to stay on top of the basically new six or so products that you had to put out every month?
Vincent: Yeah, absolutely, it’s a tremendous amount of work to be honest and the product team at Try the World is more than almost 15 people now that literally travel around the world and work on sourcing the best product for the ...
Felix: What an awesome job.
Vincent: It’s a pretty cool job too.
Felix: Yeah.
Vincent: It’s a lot of work, especially that we basically integrated an all the supply chain. Now we have the luxury to actually work directly with all the producers in the different countries we feature in our boxes. Then we do all the work logistic-wise to bring this product to the U.S. but it’s true that, when we started, we obviously had to work in a more scalable manner.
We’re working, in the first place, with importers in the U.S., so basically people that had the inventory of different products from different countries. Then we worked with exporters from different countries and then finally were able to work directly with the producers. Obviously, if you have just one person working on it, they can’t travel around the world every day to source different products. It’s also production is something that needs to be scalable as well.
Felix:敬畏ome, so do you guys plan these out for many months ahead of time? If someone is starting out, maybe not at the scale that you guys are at yet, how much prep do you think that they need to have before they now say, “I’m starting a subscription service.” I imagine that’d be a bad idea to, say, to launch one and only have one month prepared.
Vincent:是的,当然,我的意思是,我们……在我们的阶段,we source six to eight months in advance so we have a very long time before we ... from the moment we start the process and the moment we actually fill the boxes. You definitely need to plan in advance and we recently launched a new product, which is called The Snack Box by Try the World. That was kind of a new experience of restarting everything.
There we also ... Obviously, we had all the experience that we’ve accumulated but still you need to kind of rebuild new processes that are slightly different. It’s definitely been a rush to be able to produce all those new items on a monthly basis with customers. It started about two months ago.
Felix:敬畏ome, so when you are procuring these, or not procuring but when you’re putting together these packages early on, did you have these custom made packaging at the time? I think that’s a big question two is like actually actual packaging for a subscription box. Give us a little more details on how you guys came up with your packaging. Who did you work with? Not who did you work with but how did you work on creating a package for a subscription box?
Vincent: Yeah, for sure, so there we worked with a designer that was in-house, that made all the design. Then we tried to get samples. We found a few partners, again, through the network of people we already knew in the space and that allowed us to [inaudible 0:43:01] the first prototypes. Then it’s about ... What we do is work with a fulfillment center that handles ... We work with a lot of third parties so for post-production of the non-edible items, so the box, the print papers inside.
Also we worked with a fulfilment center that helped us scale a lot, that handles all the receiving the products, stocking then kitting the boxes and putting the boxes together and then shipping. It’s also figuring out the right partners that can help you with a small scale in the beginning but then helping you ramp up quickly.
Felix: Cool. Do you think that’s necessary to start off or you think starting off with like a non-branded box?
Vincent: Everybody start ... We started with a white box for Valentine’s Day, in the very first day in 2013. That was non-branded and that was a very small scale kitted in the ... at Columbia. Everybody should start with something like this which is a prototype that is, unfortunately, usually non-branded. Still try to use a sticker of the brand.
Felix:敬畏ome, so I know you were mentioning before we got on the call today that one of the things that you focus on is analytics. I think it’s super important, I think, in a business like yours, because there’s so many moving pieces. Are there specific tools or apps that you guys rely on to keep track of all the data?
Vincent: Yeah, I mean, we have a couple tool that we use. Obviously there are tools that are free like Google Analytics. I recommend everyone who sets an ecommerce to use that. Then, on the more on the marketing side, so really driving traffic to the site, we work with all the platforms we have. For example, Facebook ads manager has a lot of data available that we monitor.
We have two data analysts in house so we have a lot of data that is coming in and a lot of data that is being analyzed on a daily basis. Then we have a couple of other tools that we use. A company that we really like that is called Simon Data, that really help us scale on our retention marketing. It’s basically working on reducing churn all the time. Then you have some more refined attribution models that you can use, but that’s usually for more advance purposes.
Felix: What are the, I guess, most important data points that you pay attention to on a day-to-day basis? If you open up, I guess, Google Analytics, what do you recommend people pay attention to when they open that up?
Vincent: Yeah, absolutely, that’s a great question. For us, I would start first with kind of the business objective. I think that the biggest one is acquisition and churn on a daily basis. How many people are you getting to subscribe and how many people are you losing? Then another very important one is cost per acquisition on a daily basis to make sure that you can afford the marketing initiatives that you’re running right now.
Then, on a more day-to-day online, through Google Analytics, theKPIthat are very important is both traffic that is coming to your site, so how many people are you bringing in on a daily basis or on a monthly basis, and the conversion rate, how many of these people that you’re bringing to the site you’re able to convert into sales. For us, it’s subscribers.
Felix:敬畏ome, and are there Shopify related apps or what are you using to handle the subscriptions. I know you mentioned Chargify earlier on to handle these recurring charges. Are there any other platforms that you rely on to help manage this entire process?
Vincent: Yeah, we have Stripe. Like many businesses we have Chargify and then we’ve ... That is an app of Chargify. Then we have a custom database on top of that.
Felix:敬畏ome, so there’s no subscription service specific app that you need to start a business like this?
Vincent: No. I think it’s you usually need something for recurring billing, for which we use Chargify. There are few competitors. Then we just work with Chargify.
Felix:敬畏ome, so what’s the story for the remainder of this year? What are some goals that you guys want to hit for 2016?
Vincent: Yeah, absolutely. We have some pretty ... We have just launched a new product, as I mentioned, that was pretty awesome. We launched, so, the snack box. It’s five snacks from five different countries every month. It’s pretty much half the price of the signature box so it’s really exciting. It really ... A cool new product with a new branding, so we’re hoping to grow this new subscription fast as well.
Then we have a lot of ambition on developing the ecommerce. With every product that you receive, either in your snack box or in your signature box, you’re able to repurchase the product on the ecommerce that we have on our site as well, so ...
Felix: Like a one-off basis?
Vincent: Exactly. Yeah, so if you really, really like those cookies from [inaudible 0:48:19] from France, you can purchase them. You can purchase as many as you want in the ecommerce. That’s super exciting for us. Continuing to grow that because that’s also how we help the brands and the partners that we work with that follow us on this adventure. That’s how we also help them to grow their brand in the U.S., so it’s really super important.
Then it’s continuing to develop amazing content that both or subscribers and people interested in international food in general can enjoy.
Felix:敬畏ome. Thanks so much, Vincent.
TryTheWorld.com is the website. Anywhere you recommend our listeners go and check out if they want to follow along with what you guys are up to?
Vincent: Yeah, I recommend going on the site. We change the country every month. You can definitely follow us on Facebook, on Instagram, and also we have a pretty cool Snapchat that is handled by our amazing social media manager [inaudible 0:49:11]. I recommend following that as well and reading some article on the amazing magazine that we have.
Felix:敬畏ome. Thanks so much, Vincent.
Vincent: Thank you, Felix. Pleasure.
Felix: Thanks for listening to Shopify Masters, the ecommerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com for a free trial.
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About The Author
Felix Thea is the host of theShopify Masterspodcast, the ecommerce marketing podcast for ambitious entrepreneurs, and founder ofTrafficAndSales.comwhere you can get actionable tips to grow your store’s traffic and sales.