Alex: Yeah, the combo product.
Michael: So yeah, when the combo products were added then things really blew up because that’s where we were really able to present a whole combo of items shown together. And you could navigate to it at the top level like I want to buy a complete bundle and that probably started sometime last year.
Alex: Yeah, around June.
Michael: So I would get your emails and I was like this sounds like the feature we’ve been looking for all along.
Alex: So maybe just to give context to our audience we are talking about combo products, which are basically products in your Shopify catalog and you can link your individual real products to it and it just shows up like one product with all the child components. Then you can just pick it up as one thing and it splits again or blows in your cart as single items and everything is tracked. Just so people understand better what we’re talking about.
Michael: And that was exactly what we needed that from the very very beginning. So we only started, since we’ve been talking to you recently, we have now expanded where they are being shown on the site. We did just have a special area where you looked at the bundles and now we’re starting to integrate it more into the different pages where the individual products are linked because we’re realizing just how many of our customers are using these tools.
I was shocked when I heard that over 40% of our revenue is being generated through the PickyStory tools. And we do have a significant percentage of our business from return customers. Generally, a return customer isn’t buying a whole package. So yeah, it’s even more impressive. So really those first times Zenbivy users who are coming in and buying into the system are really finding those tools helpful because it’s a huge percentage of our orders and our revenue.
The average order value for something going through PickyStory is more than double the average order value without PickyStory, which makes sense – you’re putting things together – but in terms of adding on it’s like “well I would buy the bed, or I might buy the bed and mattress, but now you’re giving me the whole package and making really simple and so I’m just going to buy the whole package from you.”
Alex: But why do you think they accept the idea of, t’s easier, which I’m sure that’s 80% or 70% of the decision-making process with your customers. Are you offering discounts or something like that or do you incentivize the purchase?
Michael: Not yet, we want to get to that phase in fact we want to start that, we’re figuring out how to integrate it, so we haven’t put a discount on any of these. This is all just the capability of putting the things together so it’s making it simple, and the other big factor is that they are confident that they’ve got it right. So they know they’re not making a mistake because like I said it’s a new thing, and they are spending a lot of money.
People want to make sure that they are getting the right thing when they’re doing something brand new that they don’t quite fully understand. You are asking them to take a pretty big leap of faith, to get rid of the mummy bag which we had for 60 years and have to do something new, and it looks strange a little bit to some people and so I think it just helps them with the confidence in our case of knowing that they are putting the right pieces together.
Alex: Because you also mentioned that it is an educational product, you can think about it as a new type of subcategory in the sleeping bag industry or market right then basically you are using PickyStory not only to increase your sales and make it easier to pick it up but also too as you said to educate your customers about this new type of, I don’t know if technology, but at least layout, for this product that they can use instead of the old way.
Michael: I think that there really is. People are used to sleeping bags, this is not a sleeping bag so we are replacing a bag with something that’s not a sleeping bag and so there’s an element of “this is not what I’m used to”, because ever since the history of time everybody is using a sleeping bag. So when you’re saying now it’s just a blanket on the top of the bottom and how does it all kind of go together, it just really adds that confidence.
It makes things simple and people a lot of times will already have a mattress, and they’re like well which size does it fit and we’ll ask them which size mattress do you have and they don’t know. But if you just buy a bundle, you get a new mattress – it’s thermally matched, it fits and it all goes together and it makes that upselling very simple. Encourage them to to to make sure they getting it right – these people say they just want to sleep comfortably like the person you are showing them in the picture.
They don’t want to learn about hydrophobic down and different shaped mattresses and they don’t want learn about all that stuff, they just want to sleep comfortably. It helps to educate them by putting the pieces together and say now this goes with this and then look when you’re done they all go into these two little bags and they come included and they’re like oh I get it, so it just really helps convert in that way.
Alex: Did it help you in terms of marketing channels? I mean are you using these systems and the imagery that you have there around the components together in order to market to your people? Or just you’re waiting for them to come to your website and then you show them?
Michael: Yeah so we haven’t done any outreach marketing yet showing the bundles coming together. Most of the time people are coming in, they’re intrigued with the two-part sleeping system and this is just like okay, will I decide to do it, what are the rest of the pieces that I need? I don’t feel like we’ve yet started to tap into what all of the potentials are, like I said we haven’t used any of the discounting features as of yet. Bundle for a discount – that makes a ton of sense for us, especially with the revenue we’re generating from it.
We’re just trying to figure out the best way to kind of implement that and there’s a few other little tricks and treats everytime we go through there [the PickyStory app]. We get emails from you and they are actually quite useful, when you send new features can we look at those and some of them apply to us, some of them don’t but a lot of them do and we’ve sort of adapted with you as you guys have expanded your platform to kind of try and take advantage of the new things that are there.
And PickyStory is also open to when we have questions or concerns here’s one angle that doesn’t quite work for us and here’s another one we get support on that and you know if there’s not a problem solved we have other solutions that we can put into place because there’s always the little issues around the edges. You’re trying to build a platform that works for a lot of different customers and we have our specific needs – we’re always trying to marry those.
But in terms of comparing it to a custom solution I mean its way more cost effective, way simpler and any little frustrations we have around some of the details are just minor compared to our tool that broke all the time. Strategically we’ve basically made the decision we’re not doing anymore custom coding in our business unless we absolutely have to do it. You just don’t need to – having people who are experts in doing what they are doing and us being experts in what we’re doing, it’s way better than us trying to create expertise in things that we don’t know about.
It’s why innovators and entrepreneurs can do what we can do now – you can go and get these solutions relatively cost effectively and they’re helping your business. Zenbivy’s been profitable since day one because the only investment we make is ai inventory, everything else is pay as you go and it’s largely scalable. If PickyStory wasn’t working in the first place, just turn it off and there was no cost at the beginning. So just the way that the ecosystem for e-commerce has evolved really gives a lot more people a fair chance at the market place, whereas before I would have to pair with somebody bigger, now I can just go to the customer directly. It’s incredibly empowering.
Alex: And many folks now they are talking about retention versus acquisitions. It’s a big thing right now, and it feels like you kind of cracked the retention side of it because you said that you have so many returning customers. Even though you have so many returning customers, still 40-plus percent of total revenue comes from PickyStory from basically allowing them to pick multiple products together. This kind of is a retention tactic because you are saying, instead of bringing more and more and more and more people which costs way more to my business – I need to invest constantly more dollars into Google ads Facebook, that I can just get a higher AOV from every customer and then I focus more on the value rather than quantity. What do you think?
Michael: Right, that’s blown me away because I think about us making one thing – we make a sleeping bag and then when you buy it you’re done with us, right? And that presumption has been completely wrong for us, I’m shocked all the time by how much of our revenue comes from returning customers. The main reason is, we send them a product that’s great and they’re like “this Zenbivy bed is fantastic and now I need a mattress I’m just gonna go to Zenbivy”.
Because we’ve earned their respect with the first product, now they just want to come back. We’re the experts in sleeping when they need other parts, and it’s amazing how many people have bought more than one. They buy one for themselves then buy one further for their spouse or they buy one for themselves and they come buy pillows later and stuff sacks later on. Of course the PickyStory deals are always showing “here is the stuff that goes together” to make it a sleep system.
The sleeping bag has to match the mattress thermally, it all has to go together in a bed you don’t slide off, we solve all kinds of problems; people slide off the bed or the pillow falls off the bed at night. All kinds of problems people have sleeping in the backcountry that sort of get resolved by using a Zenbivy bed and like I said it’s the trust we have earned with them that makes them want to come back.
Alex: When I’m thinking about your systems and you’re talking about trust, it’s probably one of the top KPIs or I think goals for brands today, because trust is basically a core value – your secret weapon when you’re selling to regular customers. I’m just kind of curious if selling them systems, if we think about retail, if it’s the same as an advisor in the store saying to them “you know what, I want to give you the best experience of Zenbivy and for that you need to pick this component, this component, this component, and I’m telling you that Zenbivy will work for you, you will enjoy it.” I’m just interested to hear from you, do you think that this can replicate, maybe not 100% but in some kind of way replicate the same experience that a customer has with a retail advisor in a store, who just shows you what you need?
Michael: Right well we have a whole page that basically does just that, if you go to Zenbivy.com and click on the page that says “complete bed bundles” it shows and it lists all our bundles on there and it sort of takes you through, this one’s best for this, and then there’s a little blurb, and this one is best for this. So we have most comfortable, I forgot what they all are off the top of my head but ultralight backpacking, minimalist, best all around, and then it gives you a little blurb as to why we chose that bundle. And lots of people just come and that’s thel level they want. They can see what the benefits of it are, can see the weight of it and don’t worry about all the little pieces fitting and matching or whatever – it’s all matched together already.
Alex: Any tips Michael that you have maybe to young brands or brands like you that started on Kickstarter that are maybe having problems with acquisition, because the costs are just getting crazy each year, more and more expensive, and they’re constantly trying to find ways to increase their sales, increase their revenue.
They’re trying to go on the retention side of it, bringing their customers back, and making sure that their customers spend more in the store. Maybe you add some tips around who should actually sell their products from your experience, not only Zenbivy but from your personal career as well and who are they want what time what kind of tips you can give these folks that are just starting their businesses and looking to sell more products.
Michael: It’s interesting, our cost of acquisition for customers has done nothing but go down. It’s not down a lot, but it’s come down over time. Part of that is we are getting such a high return customer rate, but we use a very deliberate strategy of how to get people onto the site. We look at traffic very differently, so you have to understand your customer and what their buying habits are. We recognise you are not going to go to somebody who understands the mummy, has always used the mummy, believes in the mummy, and show them an ad and have them hop over to your site and sell them an $800 bed on their first visit there. It it does happen, but very rarely does that happen.
We think of taking the customer on a journey and that first touch point is to build legitimacy and a little bit of trust so we just try and drive traffic and we have a traffic measurement and we understand how many visitors equals how many dollars so we have a top level metric where we’re just filling the top of the pipeline really as inexpensively as we can to try and get maximum visitors on there. And generally we’re not trying to convert at that point we’re just trying to get people on there, get them to sign up for emails, get started, becoming interested and part of the community, and then we try and touch them again afterwards. After they come to the site multiple times that’s when we start targeting them for conversion, and bringing them back and really trying to work on those conversion elements.
So we run two types of campaigns, a traffic campaign and a conversion campaign and we also do an awareness campaign at the top at the highest level on some channels, but the main are that traffic and the conversion campaigns. And we’ve learned you’ve got to do both. When conversions start to stop working its almost inevitably because we haven’t put enough customers on there to remarket to. So we sort of found our audience funnel and figured out what is the best way to take them on that journey and reconnect with them. So for us one of the most important parts is multiple touch points with them, because you have to earn that trust.
So the average customer will visit our site eight times before buying. And generally what they are doing is they are seeing it and they going out and then reading reviews, going into the reviews that we provide on our site, and they are investigating it and going to the message boards and it’s a fairly well considered purchase for a lot of these people. And the big thing for us is when they are going through that process is to make sure that you have happy customers out there.
So having a great product and then standing behind it so that you don’t have dissatisfied customers rolling around out there that are on the messaging boards, we get a lot of people who are like “I can’t find negative reviews about Zenbivy anywhere” and it’s like we’ve done something to scrub all the negative reviews off of the Internet somehow. But no, when people are unhappy we just stick with them until they till they are. So if you buy $600 bed from us and then you come and say “I was miserable that didn’t work right” so we have to find why was that miserable and fix that, and fix it for you and we stick with it.
One of the great things about direct consumer is we stick with every customer. We earn them one at a time and if you bought a bed it doesn’t matter if you’re in Israel and you bought a bed and you said I went camping and I was cold, we’d resolve why you were cold and we’d make sure that it was solved, so the next time you went you weren’t cold. It’s harder, it’s sometimes expensive to do that, but it’s it’s worth it because like you said trust is everything in a business like us. We don’t have a building, like you don’t, and we dont have all the traditional stuff that you would have that earns trust. We earn trust one customer at a time directly. When you start a chat with us, somebody chats back with you who knows what they’re talking about.
Those things in the Amazon world build a lot. They are connecting with a person – we provide a specialty level service online and we think that we provide service that’s way better than what you find in any retail store because we have a huge assortment. Think of a retailer trying to do a PickyStory bundle, and to communicate that at a retail location. It’s just extremely difficult, plus there’s still trying to sell the old thing, so it’s just not a great environment for innovation. For somebody like me who really loves to innovate and do new things it’s fantastic because, before in the old world of wholesale, you always have to be spending 80% of your time managing what used to be, and 20% of your time on what can be. Now, we don’t spend any time on what used to be – all of our time is on what can be or what ought to be, and that’s the way it ought to be.
So it’s a super exciting time, you can now connect with your team you know sitting in your house. You can have a great team no matter where they are, its one thing that we share with you – we find the best people, no matter where they are, and then we just connect based on their skills and not just based on their location, and different lifestyles and everything that you can accommodate. You can up the level of people that you have.
The real reasons that Zenbivy is successful is that we have the best product, and we have the best team, and now the world is in such a place that there are partners out there that we can use to help us effectively communicate directly with customers without anybody really getting in the way like they used to. So you know, every day we come in we’re excited because of that, because you don’t have to worry about the world as it was yesterday, we just focus on the world is it’s going to be tomorrow.
Alex: Okay cool so maybe one last question that I’ll ask you before we can end this amazing conversation is what are your plans moving forward and how PickyStory will be included in this, from your vision?
Michael: Well, we have a few more innovations coming out actually this summer that people should look for that really take the concept of a Backcountry bed and start to expand it out a little more and make it more useful for other activities. So we’re coming out with liners for our beds, and duvet covers for our quilts. Our quilts unzip completely flat and then with our covers you can use them in your van, or your spare bed at home, or even on your main bed at home and you have this high quality down blanket and you can use it in other places.
We’re doing a 2-person Zenbivy bed, it’s going to be a big launch for the summer. People have desperately wanted a 2-person Zenbivy bed from the very beginning. And then a “bivy” if you don’t know what that is, it is a short for “bivouac”, which is just a minimal encampment. It’s a military term but mountaineers and climbers use it – usually a bivy goes with suffering, you have a bivy on the side of a mountain. So the “zen” bivy is like yes it’s going to be minimal but it’s going to be comfortable as well.
So there’s other elements too, maybe shelter is a possibility for us to get into as additional categories, and anything around sort of a minimal comfortable encampment to sort of breakdown the preconceived notion that it has to be heavy and bulky and cumbersome to be comfortable. We believe in the opposite – that it can be light and simple and minimal and also be comfortable and that’s where we find Zenbivy: at the intersection of comfort and minimalism, because we believe we have both of those things.
So, as things become more complicated, for instance we’re gonna have some new mattresses that are going to come out that will work with ultralight beds and then you can convert your ultralight bed to a car camping bed, so there’s different permutations of how you can put these things together. Lifestyle collections is one, so say you’re an ultralight backpacker but you also car camp and you also live in your van (I’m making this up), we can use tools like PickyStory to tell that whole story – here’s the products you want to buy because they use the same quilt. Then you go to these two places and you check the mattresses and we could put those packages together and, like you said, educate by showing them together and allow people to expand their system into new uses.
Alex: I love Zenbivy’’s story and I really want to thank you Michael, really, for sharing this with us and with our audience here. I’m sure that many companies see you and get inspired, and really – thank you for taking the time and being here with us and sharing your story.
Michael: You’re welcome and thank you and your team for being great partners with Zenbivy, helping us in our crusade to make camping in the Backcountry more comfortable so more people go. You’re a big part of and we thank you.
Alex: Thank you Michael, bye guys, thank you, everyone.