How Greats Built a Footwear Brand With a 50% Repeat Purchase Rate

How Greats Built a Footwear Brand With a 50% Repeat Purchase Rate

greats brand

On this podcast, you’ll hear from Ryan Babenzien, Co-Founder of Greats, a Brooklyn-born footwear brand offering tastefully designed sneakers for men starting at $49. 

Find out how Ryan built a powerful footwear brand with strong customer loyalty and a 50% repeat purchase rate.

In this episode, you'll learn:

  • What is a Net Promoter Score and how to measure it.
  • Why you should not post product shots on Instagram.
  • How to customize your pitch to get the press to feature you.

Listen to Shopify Masters below…

Show notes:

Transcription

Felix: Today I'm joined by Ryan Babenzein from Greats.com, that's G-R-E-A-T-S dot com, which is a Brooklyn born footwear brand offering tastefully designed men's sneakers starting at $49. It was started in 2014 and based again out of Brooklyn, New York. Welcome Ryan.

Ryan: Hey Felix, how are you?

Felix: Good. I'm doing great. Tell us a little bit more about your store and what are some of the most popular products that you sell.

Ryan: Oh man, we've got couple of big winners. Our Bad is probably our number one selling shoe by volume, but our Italian Royal is fast catching up. One starts at $59 and the other starts at $159, but they both offer quite a lot of value in the category of style that they are.

Felix: Very cool. How did you get started in this business after you launched other businesses in the past?

Ryan: I've got an entrepreneurial spirit, but this is my first full time launch of a business. It really came out of necessity frankly. We were looking, I'd come from the footwear background. I had marketing positions at both Puma and K-Swiss, and it was pretty clear that the traditional model of wholesale was really inefficient and it was essentially breaking and failing. We'd felt that what if we launched a vertical brand in the men's footwear space or sneaker specifically. We were taking a look at the market and seeing other guys doing it with Warby was certainly a big influence and Everlane, but nobody was really doing that in the sneaker space.

I believe the reason is making sneakers is a bit more complex than making a t-shirt for example. That's stuff you can make domestically. They make a lot of that in Los Angeles, where footwear, it's being made outside of the States. They just don't make a lot of sneakers, hardly any, literally like less than a couple percentage points. It takes some knowledge and relationships with factories and know how, but yeah, we understood that business. We had relationships. We knew how to design, develop and position footwear in the market. We decided to start Greats.

Felix: That kind of marketing experience in the industry that you want to launch a business is really invaluable. You notice that there's a market opportunity, notice that, like you're saying, the traditional model of wholesale with sneakers was very inefficient. Once you recognize that there's opportunity, what were the first step when you decide, "Okay, I want to start this company selling directly to consumers, selling this footwear directly to consumers," what did you have to do first?

Ryan: The first thing we had to do was figure out how we were going to do it in terms of capital. We felt confident that we could make the shoes and design the shoes and work with partners building the shoes, but we needed capital to do that. Step one was hey let's see if we could raise some money. We had a story that is just still to this day shocking to us. We went on to raise money, and we raised the amount, we were actually over-subscribed for what we were trying to raise within a matter of weeks. We took seven meetings and out of the seven, five people were willing to write a check, and we wound up taking checks from four.

Felix: That's definitely unusual.

Ryan: Yeah, it was a shocking, kind of holy sh experience. Literally we went from pitching the deck to quitting our jobs in a matter of four weeks, and that was the start. At that point, we hadn't even had a bank account really. We had registered the name and that's about it. We didn't have a sample, we didn't have a production contract, we didn't have a website. That's how it started. That was the first thing we did, which was raise a little bit of money.

Felix: That's amazing. You got to tell us a little bit more about this pitch and this deck. People talk about fundraising and it takes definitely more than a couple of weeks. You have to build relationships for a long time and then get a bunch of nos before you get the yes. This is a very common kind of storyline, but your situation was extremely I guess accelerated. What do you think was a key to your success when it came to fundraising?

Ryan: I wish I could say all fundraising for us was that easy, but it isn't. It started at a time and it was really easy. I think there's a combination of reasons. I think it was clear that we understood how to do this, so we had a category expertise in footwear. We weren't a bunch of guys figuring out, "Hey, we think this is a great idea and we'll learn how to do it." We really understood how to build and market a footwear brand. Then secondly, the opportunity. The market opportunities is tremendous and footwear, or sneakers specifically, is a very unique culture and it's a bit different than ... people that buy sneakers, they spend a disproportionate amount of income on their style. That's a really interesting customer to have.

If you can connect with them, and it's very difficult to do so, you need authenticity, you need great product, you need lots of other things other than just the product itself to really connect, but if you do, you really have a customer for life. The true lifetime value of a customer in the sneaker business is very different than a lot of our other product categories where you may have them for a year, but it's unlikely that they're going to be around for five or even two. Since we've launched we've actually proven that out and have demonstrated that this is a different type of business and it's probably why we were seeing such success.

Felix: That makes success. Great market timing and you have the industry expertise on the team, which made it a lot easier to get those yeses in those meetings. How were you able to get them in the first place? How were you able to connect with these investors and get them to spend the time to listen to your pitch?

Ryan: We come from the industry, so we had some relationships around the horn and it was just a matter of saying to reach out to our network and say, "We're going to do this. Who should we meet with," and we were fortunate enough to get a couple of great, early meetings for funds and individuals that had an appetite for these types of businesses. It was really relationship based. Frankly I had never met with a venture capital funds in my life up until that moment.

Felix: Very interesting. Cool. After the funds were raised and you quit your jobs and you didn't even have a store yet, once you got the money how did you know how to spend it?

Ryan: Again, we knew what we would do with the money before we got it, and there was no learning curve. We knew where to make it, we knew how to make it, and we knew how to design it. That process went incredibly quickly. The learning part came from, hey we need to build a website, how are we going to do that? What should we do it on? We started looking at talking to experts in the category and getting some advice on what platform should we use, should we build our self, what are the functionalities that we need? That for us was a big learning experience.

We looked at everybody and Shopify was the clear winner for us in terms of functions and ease of use and getting us off the ground pretty quickly. That was, the web component of our business was the bigger learning curve for us than the actual footwear making. I think that's what made us appealing to our investors.

Felix: I see what you're saying, because you already had the expertise. You knew how to produce the sneakers and all that and you knew how to market it. It was just you needed the funds to actually have the runway and the capital to launch the business, that you already essentially knew how to run because of the expertise that you already had.

Ryan: That's right.

Felix: Cool. I'm looking, I guess this is public information about the subsequent fundraising, so I want to get into that in a second. Before we get there, you had this idea. You knew the web component needed to be worked on. What were the first steps you had to take to actually get these shoes designed and manufactured?

Ryan: We went out and we went to some of the production resources that we had already had relationship with and worked at and worked with in other capacities over the years and told them what our vision was and we're building a vertical footwear brand at the factor level, that's a forming beast or at least it was back then because they work on order, "Hey, I sold this many pairs of shoes to the following retailers and you make stuff a season ahead of time. It was a different business.

We said we have no orders but we're willing to buy twenty four hundred pairs of this shoe in three colors and we think we know how to sell it ourselves. That was pretty different for them, but fortunately we had and continue to have production facilities that understand that this is the future of, it's not even the future, it's the now, but it's the new norm. That was the first step for us. We didn't have styles locked in, but we had silhouettes that we wanted to work around, so the design process went pretty quickly actually. We launched with two styles, the Wilson and the Royal, which are both two of our best selling styles still. We believe that they're evergreen silhouettes, so we don't really think those silhouettes are going go away from our collection ever. They're just going to change in color and material as we grow and develop and seasons come in and out and things change in fashion.

The silhouette itself will probably be around forever. That's how we went off and got going. We had tons of challenges. I'm making it sounds like we just designed it and it got made. There is a million steps in between that that you never forecast even though you know what the process is like because we've done it for years. There's always surprises when you're producing a product.

Felix: Let's talk about that. Before we get into that, was this designed in house? You designed all the footwear. Was it in house or did you hire somebody to come in and help with that? How was that done?

Ryan: We did it all in house. We still do it all in house. Design is something that we pride ourselves on. We don't outsource design. We may hire freelances from time to time to submit ideas and if we like the idea we make work with it, but for the most part we are a design driven organization. Design and marketing are our two specialties. That's how we made that product.

Felix: I guess if your core value is in design, you can't really outsource that. In any case, whatever it is that is your core value that you're creating as a business, as a brand, as a company, you should definitely keep that in house and doesn't make sense to outsource because you lose a lot of that control. Cool. You mentioned footwear is not the same as other forms of apparel. It's a lot more complicated, there's more technology involved with footwear. Tell us about these I guess difficulties that you face. You knew that there may be factors in the space already that I'm assuming were producing footwear already, so they're already familiar with that, but you said that there's still obstacles that you ran into.

Can you tell us a little bit about what are some things that you didn't expect to run into but then you did?

Ryan: Yeah. I can tell you a very clear memory of we were a new company and we were importing shoes. We were making them out of the country, so they had to be imported and come through duties. As a new company, you get scrutinized a little differently until you build up a reputation of importing, you're not importing drugs or anything illegal. Our first order got held in customs for about twelve days, which delayed ... the production was slightly late. Then it further gets delayed in customs, and we had actually gone live and started selling it.

Stuff didn't actually ship to the customer for three weeks. They had already bought it on the website. That was a lesson in customer service and pain. I felt horribly for the customer because it was completely out of our control. I felt terrible for us because it was a terrible way and a terrible first time experience for our customer who was putting up their money and trying out a new brand. Fortunately for us, once people received the product they were overwhelmingly satisfied and happy and have continued to be great loyalists. That is where the great product comes into play.

We felt super confident that they were going to love it when they got it, but it was the pain in the ass to get it that first round. Again, thankfully we had very, very patient customers and most of those customers continue to be with us today and we have one of the highest repeat rates in our industry with almost fifty percent. For a brand that's barely two years old to have fifty percent of our customers repeating, that's a pretty strong metric and we measure satisfaction in a variety of ways. The net is that our customers are super satisfied once they become customers and they show that by repeating often. Our NPS score, which is sixty-nine, and our Zendesk rating, which is ninety-six.

At the end, we're a business focused on customers and we want to provide the best product in the world for a value price, and that's what we're doing.

Felix: Awesome. You said a lot of interesting things there that I want to dive into. First of all, those twelve days must have crawled by, those two weeks waiting for the it to clear must have been the slowest time of your life.

Ryan: It was awful. I wouldn't wish it on my worst enemy. It was [inaudible 00:16:47] experience, and one that was valuable one that you step out of that and you realize I need to forecast for problems and I can't launch a shoe until I absolutely know it can absolutely ship. It was a lesson learned and one that we needed to learn.

Felix: That's a good point about making sure that you pad I guess your timing a little bit more I guess next time around. Moving forward or maybe for new entrepreneurs that are listening out there, would you ever sell something that you didn't have I guess onsite? Not onsite, but in your fulfillment center, you have the inventory already? Would you do that moving forward or would you still be I guess comfortable forecasting when you'll receive the shipments and start selling before you have them on hand?

Ryan: I don't think pre-selling is a problem, and that's a business strategy decision and if you make it, the takeaway is make sure you clearly communicate, "This product will not ship until May 20th," or whatever the date is in the future. Lots of brands do it. We've done it, and customers are fine with it. The difference was we thought our stuff was going to show up in the warehouse on Friday, so we were like "Hey, we can go live on Friday because it's going to ship out on Monday," and it didn't show up for three more Fridays. That was the problem.

In terms of selling something that you may not have yet, I think as long as you communicate it clearly, very clear on when that product was being shipped out, customers are fine with it.

Felix: Makes sense. Nowadays when you look at your timelines, do you have a multiplier that you apply to to expecting, let's say the manufacturer says he'll get it to you on Friday. How much time do you I guess give yourself to pad things so that you don't run into this issue?

Ryan: We have a pretty well oiled machine at this point, so we know what our tolerance is within almost hours of when we can go live with something. There's still always potential unforeseen challenges. If a tornado comes through and wipes out the warehouse ...

Felix: Can't blame for that.

Ryan: ... [inaudible 00:19:09] you don't forecast for that, but that would be an example of something that could happen. It's unlikely, but generally we know, we pull the trigger and the machine works and it's been almost two years now.

Felix: Cool.

Ryan: We've got that part down.

Felix: Makes sense. You mentioned another thing too about repeat customers, and I definitely want to talk about not necessarily your strategy but how you get such a great repeat rate. You also mentioned your NPS, that's the Net Promoter Score, is that what that stands for?

Ryan: That's right.

Felix: Cool. Can you tell us a little bit more about what is Net Promoter Score and how do you measure something like that?

Ryan: A Net Promoter Score generally manages, it's a management tool that gauges a relationship with your customer and it's an industry standard. A fifty is excellent. If you have anything north of a fifty, you're in the A plus category of your customer being satisfied. How do we measure it? We use a plug-in actually called Delighted, which is a really slick plug-in and it surveys customers after they basically get an email from Delighted asking them to rate their experience with Greats. A sixty-nine is pretty rare. I believe Apple has one of the highest NPS scores in the world, and I think they're a seventy. Zappos, who prides themselves on being very customer centric and focused on their customer satisfaction is lower than ours, if that gives you some context on where we are in the footwear category.

Felix: I think I've heard of this as I guess more used in the tech industry for software, for example, and I think it boils down to a single question that you ask your customer or your user how likely are you to recommend our product or our company or our brand to others, to your friends or family. I think that's the core question they ask. I'm not sure how the number gets calculated based on that, but the idea is the more people that are saying, "Yes, I recommend you," obviously the better. I assume that's how they calculate it somehow after that.

Ryan: It essentially comes down to detractors and promoters. You don't want to have detractors because they're going to say, "Hey, this brand sucks." You don't want that. We have fortunately very few. We don't get detractor scores. It's like a blue moon. Generally when it happens, it's a customer getting a product that slipped through just quality control and it shouldn't have been shipped. We're quick to react to that, and we generally show that customer, "Hey, we made a mistake. This product should have never been sold, didn't get caught off the quality control line. Here's a new one. Here's your money back. If you never come back, we understand."

Generally, customers appreciate that and then they turn around their rating.

Felix: Definitely. I think any time a customer has a complaint, obviously it's an opportunity for you to change their mind, and it sounds like you guys do a great job with that. Once you had all these products ready to go, you had the manufacturer create them and they're ready to get to you, how were you guys able to get those initial customers? Right now I'm reading a headline here that says, "How this shoe company sold out products in just ninety days." Tell us a little bit about how you were able to get that traction so quickly to get so many customers into your store, especially because you didn't really have ... Obviously you had marketing experience and industry, but this was a brand new site, brand new business. How were you able to get things going so quickly?

Ryan: We did have tons of marketing experience. What we didn't have was a budget to actually market. We had to figure out how are we going to get awareness for our new brand? We leaned on two strategies: social and primarily that was through Instagram, and we were able to get around ten thousand followers from the first time we posted on Instagram until the time we launched, which was a matter of four months. That was pretty accelerated growth on Instagram. The second strategy was press. We knew that we could reach a wider audience and get a big awareness of a wide range of customers through press, which generally just doesn't cost any money. It's a person making sure that the press writes about you, that you don't pay for it.

When we launched, we had those two levers that we pulled. We were covered in everything from the tech journals, Tech Crunch and Fast Company to the [inaudible 00:24:08] sneaker and street style sites like [inaudible 00:24:11] and [inaudible 00:24:11] and Complex all the way up to the fashion publications at GQ and Esquire. That campaign, from that day, that second that the site went live built up a pretty wide demand and we had a pretty successful launch day.

Felix: Very cool. Let's talk about social first. Instagram, you said ten thousand followers in the four months. How were you able to do that? What were you posting about? How frequently were you posting? How were you able to grow such a large following in this short period of time?

Ryan: Funny enough, the thing we weren't posting was sneakers because we didn't have any. We didn't even have a sample. We started posting and this is a theme that exists in our Instagram to this day. We don't post product shots often. We post inspirational shots about design and lifestyle that we are influenced by and how we look at the world and how we design product and what we're putting out and why. For the first few months, I think those are what we did. We started doing a thing called Morning Wood, which was just a post every morning of something from wood, whether it was a staircase or a bicycle. It was kind of a play on morning wood. It was funny and dudes laughed. We still do it today, and it's one of our most engaged posts we do.

We talk about or we show interesting auto, travel, food, cars, motorcycles, bicycles, women. Just really things that we're inspired by from a design perspective, and that's how we focused our Instagram.

Felix: You mentioned I think nowadays you post more I guess product photos than previously because you didn't have any. What is the harm in just filling up your Instagram feed with product photos? Can it hurt your business?

Ryan: I believe it can. I don't know if other businesses succeed with just a bunch of product. For me, the best way to sell anything is to not try to sell it. It's just to try to position. We're building a brand, so it's a little bit, the tapestry of what a brand is not solely about a sneaker. There's so many more things that go into it, and we like to expose our community to those other things. We're not sales-y in nature as a company. We don't over-email people, we don't over-promote, we don't over-discount. We make great product at great prices, and we stand behind it. This is about education less than it is about selling.

We think once you understand what we do and how we do it and you're willing to try it, we guarantee that you'll be satisfied. That's just what we've done now for two years straight, so there's no reason why that would change. We're not selling, and I feel like if you're posting pictures of product all day, that it gets a little too sales-y and that's just not the tone we want to set.

Felix: I love that I guess the phrase that you said, which was the best way to sell a product is not to sell it, but it seems like what you're doing instead is positioning your brand in the same I guess mind space as the stuff that you are posting about. You're posting a lot about design, travel, whatever it is that you are interested in, basically posting stuff that your target customers are also interested in because then when you start placing your products inside that same feed, it positions your product the same, again, I'm not sure of a better way to say it, but the same mind space as the inspirational stuff that you're posting to.

I think that's a great way of saying. To sell a product is not to sell it, I love that. Cool. Let's talk about the press I guess run that you guys did. How do you know, because you said that you got coverage from the sneaker head kind of sites or general fashion sites, even tech sites. How did you know who to I guess focus on? I guess we'll start there, there are a bunch of questions about this, but how did you know which publications to focus on?

Ryan: Well again, I've run marketing divisions in big companies. I understood who the publications were and who the people were at those publications. I didn't have to learn. We did hire a publicity firm to manage it, but we were very, very clear on what sites and what papers and what magazines we need to be in in order to have a successful launch. In our instance, it was we were very well aware of the market, and with enough experience to not have to figure it out. Again, I think that gives us a huge advantage where we're footwear guys by nature, which is super credible in the sneaker space because authenticity rules. If you don't have authenticity, the sneaker culture will just essentially ban you.

You can't really buy your way in. Footwear or dress shoes, that's a little bit different. Sneakers it's really culture based on thankfully we're part of that culture, we grew up in the culture, and we're invited into the culture and to all of their parties, if you will. That's a huge advantage for us. I think people that are coming in, graduating out of business school and think they're going to go make a sneaker brand, they might have a little more difficulty penetrating the market.

Felix: That street cred is important no matter what industry you're in. Being able to position yourself as just like them, just like your customers I think goes a long way.

Ryan: I think it's unique in sneakers. I don't think you have the barrier to entry if you wanted to make jackets or khakis. I don't think there's a policing force, there's no real khaki convention if you will. In sneakers, there is sneaker events, there's sneaker websites, there's sneaker everything. There's people that wait in line for sneakers. That is a different type of business than another product in the fashion space if you will. That's what makes it both good and bad. If you're from it, great. If you're not, you're going to have some troubles.

Felix: I see what you're saying. It's definitely much more prevalent or stronger I guess in the sneaker culture. Cool. Because you have this experience with working with publications, pitching the press, I guess what kind of tips do you have in how to pitch your product in a way that helps you stand out above the competition? I ask this because I'm real interested in knowing more about your pitch because you got coverage ... I guess I initially imagine, I guess sneakers will show up on a Tech Crunch for example, but you're able to get on there. What was the angle I guess that you were able to approach these publications to get them to cover you and not just think of you as another footwear or apparel company?

Ryan: The tech sites wanted to write about us because we were the first vertical sneaker brand. I think they were looking at the space of vertical businesses and why they're meaningful. Us being the first sneaker brand, I think they wanted to make sure they wrote about that. There's lots of benefits to being a vertical business, and one of the key was is we're able to make a premium product and offer it to the customer at a value price as opposed to we make a sneaker in Italy, we sell it for $159. The closest competitor of an Italian made sneaker is four X that. The value proposition is tremendous in the category.

I'm not saying $159 is cheap, it's not. $159 is a lot of money for a sneaker, but in the category, it's the best value you're going to get. We're not price driven, we're value driven. We're actually price agnostic. I sell shoes for even more than $159. As long as I can provide value in the category and the class that it lives in, we're incredibly confident and happy and so are our customers because today's customer is incredibly informed. They know the comparisons. They know that if they go into a big retailer or a luxury retailer and they pick up a shoe made in Italy, it's impossible for them to see anything below $450.

They know that, so when they see our stuff and we can talk about being made in the same region as Italy, sometimes in the same factory as many of the luxury brands that they know using the same suppliers and same leather and same [inaudible 00:33:44] calf lining and all the luxury materials we use, they understand that wow, this is a very, very good product at a price that nobody's coming close to. I think that disruption of the supply chain is what the tech industry really wanted to understand from a sneaker standpoint, and that's why they wrote and continue to write about us.

Felix: That makes sense. I've seen them cover, like you were saying earlier, Warby Parker, they've covered those brands, those kind of companies as well, so that makes sense. I guess what was the approach? I'm assuming you didn't pitch the same angle or story to each of these sites? How were you able to I guess customize your approach?

Ryan: Well you got to know your audience. I think the sneaker guys, they want to know something different, but again, value is always bake into our story. We're making a shoe for a sneaker head dude and it's $60 but it should be $110 from our competitors. He still understands value, but he also understands it's the same sneaker that J. Cole wears. We do a collaboration with Marshawn Lynch who is arguably one of the best running backs in the game ever. He's retired now, but he's a known sneaker guy, and why does Marshawn Lynch does a colab with Greats? He wanted to do a luxury sneaker that he could price accessibly for his audience because he didn't want them to have to pay $500 bucks of more.

That sneaker story is meaningful and relevant. That sneaker sold out in less than an hour. It was written about on not Tech Crunch, sorry. Why am I forgetting? Mashable. It was the most shared story. We released that sneaker in November of 2015, and it was the most shared story on Mashable for the entire month. That shows you the power of the sneaker culture. That communication was a little bit different than what we would have done from a tech angle, but the brand DNA lives throughout every story we tell, and I think that's what makes a brand credible, that I can live in different environments without losing its authenticity.

Felix: I see. You have this core, well I could always use the word value again, but basically you're saying value's baked into the brand itself, so then when you approach Tech Crunch for example, the angle, it still comes down to value, but then you're spinning it in a way where the value is being generated because you're a vertical company and you're able to control the entire supply chain, and then when it comes to I guess Mashable being more of a social aspect of it, where because you work with Marshawn Lynch and he wants to sell high end sneakers at an affordable price, it still has to do with value but now the story has changed but it still boils down to the core I guess message of your brand. Is that what you're getting at?

Ryan: That's exactly right. The Marshawn audience maybe not so psyched about maybe a supply chain disruption. They're not psyched about that, but the end result is the same. They're like, "Holy shit, I got a really great, amazing sneaker made in Italy for a price that nobody else is offering," where on the tech side of things, people are like, "Wow, that is amazing. You're disrupting a supply chain and that's really critical for the growth of any business today because supply chain matters. They're able to make a shoe at a price and sell it at a better price." The audience have different interests, but the core values of our story actually never change.

Felix: I love that. I think the key lesson here for other listeners out there is that you can always customize I guess the story without steering away from your message, and I think that's really important, especially when you are reaching out to press to try to get them to cover your story because you have to be able to tell a story that their listeners or their readers are going to be interested in, and I think that's a great kind of lesson there. Cool.

Let's talk about pricing, because you mentioned earlier, this came up a few different times, but then you specifically mentioned that you're price agnostic. Can you talk a little bit more about what that means to you and how you guys figured out pricing?

Ryan: Yeah. Our pricing is a function of what it costs to make the shoe and the margin that we fix to our business. Frankly, we're able to get a better margin than most of the legacy brands and still sell a product for much less than they can. It's really a win-win. We have a slightly higher margin than most sneaker companies, and the customer's still saving a ton of money. Those are the kind of businesses that are interesting, and that's why we're doing this and we think we can scale this and make a really big business out of Greats.

We use premium materials in everything we do. We're not trying to get the lowest price in the cost of goods. We are actually trying to make, we up-spec materials across the board. We make a shoe, it's $59. Sorry, it's on a Vibram sole and it's $49. Now there's not another Vibram soled sneaker in the market for under $80. Vibram put that particular sneaker, which is called the Rosen, into their museum in Boston where Vibram North America is based. The materials we use are all premium. We could make that shoe for much less if we used a sub-standard or sub-par quality sole. We could probably save forty percent on the cost of the shoe, but we believe in quality.

Style, quality and value, those are the three things we talk about at Greats every single day, and it has to go through every one of those filters for us to put out a product, and if it doesn't we don't make it. We believe in Vibram. They've been around for many, many years. They're one of the premium sole makers in the world. There's brand that, everybody uses them. Ralph Lauren uses them, Merrell uses them, North Face uses them, and Greats uses them. Everybody uses them because they make great soles. That's an example of how we are over-specking on the quality to make sure that people can never say to us, "Your shoes are inexpensive because you don't use the best materials." We can argue and prove that we use the best materials and our shoes are inexpensive because we disrupt the supply chain and not because we sacrifice on materials.

Felix: I think you probably got into this a little bit earlier about the question of getting these repeat customers. You said fifty percent of your customers that buy for the first time will buy again. I think you mentioned or I guess you alluded to the product itself is always the key. Going back to the product, making sure it's a product that people are actually happy with so that they do buy it again, but is there more to it? You have a great product; is there any more to it I guess to get those repeat purchases other than just having a great product?

Ryan: Yeah, I'm simplifying it. I think the great product is the anchor but how do you communicate with a customer? What's the customer experience like when they buy something or have questions about something? How do we engage a customer? Do you email them to death to try to get them to buy something? We don't believe that that's the technique you should use. A lot of brands do it. Personally I've unsubscribed from almost every single brand that I actually like because they send me too much crap. I don't want an email from them every day telling me about their forty percent off sale.

That tactic of how do you communicate with a customer is something that we consider all the time. I think our informative approach without being sales-y is the right tone and that's the tone we try to take. I think our customer appreciates that, so they want to be informed but not annoyed. I think that tactic has worked very well for us and probably also part of the reason why our customers are happy to repeat. The great product is table steaks in my opinion. If you're not making the best possible product you can, you're probably not going to have a great long term business. After that, it's how do you treat the customer, what are you values as an organization, how do you treat your employees, what is the perception of your brand in the market.

There's a host of things. That's all brand building. The brand part of it is to me the most important part, and it's an art, not science, and it's really, really difficult, but if you do all those things well you'll have a successful company.

Felix: I want to talk about this approach you said, which is informative without being sales-y. How does this actually look, let's say, in your email? How do you, this I guess in mind of you want to be informative but obviously at the end of the day you want the sale, but you're not trying to come across sales-y. How does it actually end up looking when you say, let's say, an email to a past customer?

Ryan: I can't tell you that. That's our special secret. No, I mean the reality is look, when we launch a new style or a new color or new material on a style, we send out an email to everybody and let them know that this is available, this is the price. You can click here to buy it.

Felix: Just don't shove it down their throat?

Ryan: What we don't do is then email them twenty more times over the next twenty days, where many, many brands or most brands are doing that. You're just seeing unsubscribe rates go up. You're seeing people opting out of emails because it's annoying. You have to find the balance of staying top of mind without cluttering somebody's inbox, and it's, again, it's a hard balance to find. If you find it, I think you have a better metric of conversion and customer satisfaction, which is what everybody should be working towards. It's just tactically, it's slightly different than trying to beat somebody over the head to get them to buy something or beating them over the head, annoying them and discounting across the range. First email, second email, tenth email. By the time you're done, you've already fifty percented yourself off just to get them to buy something, which we don't think is the right way to build a brand.

Felix: I think the key is definitely that it varies between industries and different companies this whole how frequently should you be sending out your message. You just got to be providing value too. Like you're saying, you can't just be sending out twenty emails talking about discounts or just pushing your product because that's not valuable at the end of the day to the customer because they're not getting anything out of it inherently. It just seems like you're asking for something from them. I think the key to it is like you're saying, find a balance, depending on your brand, your company, your industry and then of course always be providing value as well. Like you're saying, the informative approach rather than being sales-y.

Most of the time when you're being sales-y, I guess it's not inherently valuable just by pitching your product. That makes a lot of sense.

Ryan: Right. What's really important for us is at the end of the day we're actually saving money. If a guy's going to go out and buy a pair of sneakers, we make a better product for less. We want to say, "Hey, this is available to you." When you're ready to try it, you're going to be really happy, and then you can become a customer for life and we're going to help you save money because we can just make better stuff for less. That's a point of pride as a brand, and we feel radically could be a little bit more aggressive in trying to educate the customer because we're like, "Hey man, we're trying to save you money." We could take that position. We don't, but that is the reality. At the end of the day, we have less impact on your wallet than many of our competitors.

That is something I think people appreciate. I think people know that once they get a few messages from us, and that's why they quickly become a customer and more importantly an ambassador. They start to help. The buyer word of mouth on Greats is fantastic. Customers are now helping us promote our vision to their friends because they're like, "Hey, you should try this brand. It's really good." We couldn't be happier.

Felix: I think another point that comes up to mind when you say that is that if your customers are going to benefit from ... well the mindset you should have is that your customers should feel like they're actually going to get a benefit or be better off because they purchased your product. If you don't have that mindset, it's going to be very hard to win the game, if you don't feel confident in your product enough that you can for sure say that they're going to be better of by buying from you, and I think that hearing the way that you're talking about it that's definitely the mindset that you guys have.

Cool. Thanks so much for coming on Ryan. Greats.com is the website. What are the plans I guess for the remainder of this year? What do you guys have ready to go for 2016?

Ryan: We've got some women's sizes coming out. We didn't think we'd be doing women's, but we had let's call it hate mail from girls asking us to make smaller sizes in some of what I would call unisex styles. We're coming out with women's, as we roll that out through the summer. We've got some really great collaborations coming out with to be named. You'll have to look for that in the press, but we have some great colabs coming out with like minded brands and individuals who we like to collaborate with, which are generally pretty limited edition stuff but really special. We're just continuing to grow the business. We're adding, we're hiring, we're opening our first store in Manhattan likely late 2/3, early 2/4 of his year. It's time to grow the business and we're super excited about it.

Felix: Cool. Super excited for you store definitely. Want to stop by and check it out once it's open. Greats.com, again, Greats brand on Instagram. Anywhere else you recommend our listeners check out if they want to follow along with what you guys are up to?

Ryan: Yeah, our Snapchat is starting to come along, so it's under Greats brand, but Snapchat is getting really fun for us, so you should check that out too.

Felix: Awesome. Thanks so much Ryan.

Ryan: All right, thanks Felix.

Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com for a free fourteen-day trial

 


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shopify-author Felix Thea

About The Author

Felix Thea is the host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs, and founder of TrafficAndSales.com where you can get actionable tips to grow your store’s traffic and sales.

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