If it’s free, it’s for me — that’s one of my mottos. And that’s why I love free samples. But free samples are universally adored, and in recent years the customers getting the goods aren’t the only ones who are benefiting. Ecommerce companies and retailers alike are using samples as a way to raise awareness, convert more sales, and drive traffic to a product or webpage, and it’s working.
On this episode of Up Next in Commerce, guest host Albert Chow talked to Doug Guyer, the Co-founder and Director of Strategic Development at Brandshare, the company that brings many of those free samples to your door. Doug explains that sampling is a tool that any brand can take advantage of, and if they do, they could see 97% of people who get the sample try it out, and 32% of those folks actually convert into buyers. It’s a massive opportunity, but Doug also says that most brands out there don’t know that this is possible. How has Doug and the team gotten the word out — including the story of how they landed their very first campaign with Tylenol — and what should brands be thinking about when they engage in the sampling strategy? Find out on this episode!
Main Takeaways:
- It’s Worth A Try: Very few marketing tactics are as effective as free samples. Reports from Brandshare indicate that well-run sampling campaigns see 97% try rates and as high as 32% conversion rates. Consumers are more willing to try something that is of no cost to them, and brands will be rewarded with both awareness and increased sales by making a relatively small investment in samples.
- Building Trust: When a brand gives a free sample, or includes a related free sample from another brand in a customer’s order, the original brand is seen as going above and beyond. Customers view the sample as a sort of curated experience that was sent just for them, and it creates more brand loyalty.
- Not a Cureall: While sampling is effective, it can’t solve all of a brand’s problems. A struggling company or a business that simply doesn’t have a good product will be negatively impacted by free sampling.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“Like you said, every sample you’ve gotten, you’ve tried. Because why? Because it’s no cost. It’s a no cost experience for that consumer to try it, especially if it comes from the privacy and safety of their home. And then if the product does their job and it’s a good product, hey, you’re going to convert a certain amount of those. You’re going to convert the 8%, 14%, 32%. We’re in that top tier of conversion from a trial and conversion standpoint because of our targetability our scalability and our delivery vehicle.”
“When you walk into a grocery store or you walk into a drug store, any brand that’s on the shelf is basically a brand prospect of ours that we call on, we talk to, whether it’s the Unilever or the Proctor & Gambles or the Campbell Soups or whoever they may be are our clients. And we educate them on the opportunity. Many brands have never heard of what we do and how we do it.”
“The Tylenol story is a great one. We were one of the original testers, if not the original tester of Ecomm and back then, it was not even Ecomm. It was just little packages with the L.L.Bean, Eddie Bauer, Cabela’s and Sportsman’s Guide. We did 200,000 pieces, 50,000 each, and coded each UPC code accordingly because back then it was just coupons. And the redemption rate was so high that they thought there was an issue. There wasn’t an issue and so they rolled out to 4 million pieces immediately after that. They went from 200,000 to 4 million pieces why? Because they saw it work and they wanted to be there before competitors, the Advil and Aleves of the world got into it. That was a springboard for them.”
“[Sampling] works for two sets of clients right? We’ve got the brand client and the ecomm retail client, but it’s got to work for both parties. Because this has got to be a surprise and delight for the ecomm retailers customers that we’re riding along with and it’s got to work big time for the sampling customers. Because they don’t just have the cost of distribution, they have the cost of the goods sold, too. They’re giving that away. 100,000, 500,000, 14 million pieces. And that’s some costs of goods that has to be regained by additional sales.”
“If you’re going to sample, you better have a good product. Because that’s going to expose your brand in awesome ways or if it’s not a good product it’s going to, oh my gosh, that tastes horrible or that gave me a rash. That skin cream gave me a rash. The trial and conversion rates will be high even if it’s a great product. And if it’s not a good product, don’t bother obviously.”
Bio:
Doug Guyer serves as Co-Founder & Director of Strategic Development at Brandshare US, a company he co-founded with his father in 1984. Brandshare is a leader in connected sampling and creates omnichannel brand experiences to accelerate purchase conversion. Through curated subscription boxes, loyalty programs and ecommerce sampling with digital connectivity, Brandshare engages millions of consumers monthly – connecting brands to their target consumers.
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Transcript:
Doug:
Doug Guyer. Strategic Development Co-founder of Brandshare. What is Brandshare? Brandshare is a E-commerce media network that we built over 37 years started with [inaudible].
Albert:
I’m sorry. You’re going to cover Brandshare after my intro. Welcome everyone to another episode of Up Next In Commerce. And today, I have a special guest, Co-founder and Director of Strategic Development at Brandshare, Doug Guyer. Doug, welcome to the show.
Doug:
Thanks Albert. Honored to be here.
Albert:
Right out the gate Doug. What is Brandshare and what does it do?
Doug:
What is Brandshare is a great question. We have an E-commerce Media Network and we’ve built that over 37 years. And then people say, what is an E-commerce Media Network?
Albert:
That was my next question.
Doug:
And of course it’s a consortium of 800 different Ecomm retailers that collectively ship out 75 to 80 million e-commerce order packages every month. What we do is we took those 800 Ecomm retailers, categorize them into 42 different lifestyles and then embed a product sample or brand experience insert into each outgoing FedEx package so that consumer, that online buyer gets a surprise and delight in their package when they receive it the next day, after order. I would say it’s a delivery vehicle for the brands, for the CPT brands, OTC brands and a variety of brands to infiltrate the consumer’s home with their product.
Albert:
Okay. Now is it done? I mean, back up a little bit because I to make sure everyone understands what we’re doing here. You’re not a shipping fulfillment network. You don’t ship and fulfill orders for the brands. Is that accurate?
Doug:
That’s correct.
Albert:
Okay. So it’s not on the order level, it is like when I literally get samples in my mail from a brand, Brandshare might be part of that, is that accurate?
Doug:
That’s not accurate. Only because our samples are our brand experience inserts right along with that FedEx order package. Give you an example, you order your bed linens and bath towels from www.bedbathandbeyond.com.
Albert:
Okay.
Doug:
You order today, tomorrow, there’s a package on your front door. You come home from work, you open up that package. You know what you ordered, you just spend a 100 dollars and ready to go. You need these bath towels. And there in the package, there’s a Tide PODS Downy fabric softener product sample in there. You didn’t buy it. You didn’t expect it. It’s a surprise and delight to you the buyer because it makes synergistic sense to ride along with washables from Bed, Bath & Beyond. That’s the customer experience we bring to the brands and to our Ecomm retailers and ultimately to the consumer in home.
Albert:
Talk a little bit about the value. I understand that… Later on in the conversation, I certainly want to dive in and understand like how these relationships are felt because I find that fascinating because it sounds like a retailer would then offer, it’s like an end gap. They let little other brands bid based on their end gap. But talk a little bit about the power of sampling because this is something that I definitely can see working. Less people go into retail stores, especially the last year. Most people tend to buy things that they can touch, feel, look at. And so on. To be introduced to a new product digitally, kind of hard. And you’re not as quick to consume a product digitally. I would assume.
Albert:
And then I was thinking, the other thing that’s another value plus is I don’t recall ever getting a sample and not trying it, literally every sample that’s ever been sent to me, I tried it. Whether it was gum, whether it was whatever. I’ve tried literally every single sample, including, as you said, if it’s a laundry detergent that I don’t currently use, I’ll do one load with it just to… Why not? It’s a two-part question. I’d love to hear, understand a little bit about, why this has become so important in your perspective and then also give us an idea of what value does it really bring to the retailer from any case studies or results that you have?
Doug:
Yeah. Sampling is not a digital tactic. We made it an e-commerce digital tactic by partnering with Ecomm retailers back in the 70s, oh God. I’m sorry. The 90s, because we started in 84, we worked with catalogers, catalogers morphed into Ecomm retailers instead of Cabela’s sending out 140 million catalogs a year, they’re now send out 5 million. Why? Because they were very well-perceived or situated to have a fulfillment center and didn’t have to build the postponement centers like the www.petsoftheworld.com did. And they were making money as catalogers and morphed beautifully into Ecomm retailer.
Doug:
And then so many of catalogers that we dealt with in the 80s and 90s are doing so well today because of the backend. What we did is pivoted from catalog to Ecomm retail and built that media network, Ecomm media network for the benefit of the brands. To instead of solo direct mailing a sample or instead of being in gyms where their sampling, instead of being in store with their sampling. In store sampling will always have a place with many brands but this is to supplement that not to replace that there’s a place for in store and there’s a place for in home.
Doug:
Where in home, via that FedEx Ecomm meets media package so that’s a beautiful thing for a brand, because why? Because there’s comfort, there’s safety, there’s privacy in your home. When you can try that sample, whether it’s shampoo or detergent or makeup or something for your kids, whatever it may be. You don’t have to stand in front of anybody else and do this. Awesome. But it’s also good for the Ecomm retailer. Ecomm retailer gets a sample that aligns with them and obviously they have every right to say yes or no to that sample. And it’s our job to vet out the properly aligned products and or brand experience inserts from Disney or HelloFresh or whatever it may be, that can sample but they can really put a beautiful educational booklet of their product or service into the packages as well.
Doug:
When that happens and it’s properly aligned and executed flawlessly, the consumer is the one that wins. Because he or she is going to try that product. Like you said, every sample you’ve gotten, you’ve tried. Because why? Because it’s no cost. It’s a no cost experience for that consumer to try it, especially if it comes from the privacy and safety of their home. And then if the product does their job and it’s a good product, hey, you’re going to convert a certain amount of those. You’re going to convert the 8%, 14%, 32%. We’re in that top tier of conversion from a trial and conversion standpoint because of our targetability our scalability and our delivery vehicle.
Albert:
Wait. You’re saying for some of these samples, they’ll convert 32% of the packages. If I send a million, 320,000 people are going to live by this product that I just gave them a sample, is that accurate?
Doug:
Yeah. That’s… The one step before that is how many tried. Is it 80% that tried and then you take 32%? or is it 97% that tried? And a good program will have 80% or so try it.
Albert:
Well, how do you know that if someone tries it? I mean, that’s…
Doug:
I’ll walk you through that.
Albert:
Yeah.
Doug:
It’s 80% trial, 10% conversion, that’s a nice sampling program. A very well done, flawless executed sample program should have 95, 97% trial. And it really should, based on the target ability of that same big program, whether it’s grand shares or anyone else’s, is the derivative of that 14 to 32% or 8% or 2%. We’re driving as high as 32 but some at 14%, some at 18%, some at 21% got 95, 96. To answer your question, a million… Hey. 97% of that is 970,000. If it’s a max conversion of 32%, yeah. It’s close there 320, it’s 316 or so. Between a 60,000 conversion, that’s a beautiful thing.
Albert:
That’s substantial. Those numbers are staggering. It’s pretty darn impressive. I can totally see a 97% try rate because that’s like I said, I’ve literally tried every single… Or my house has tried every single sample I’ve ever gotten. You know what I mean? You sent me a snack, I’m going to eat it. I mean, I guess the only time I don’t try it, if it’s damaged. I wouldn’t try if it was damaged. Talk a little bit about how do brands get in to these sample packs, because there are a lot of brands and what’s really fun about Up Next In Commerce is we get to interview companies that are small, we get to interview with companies that are just starting, we get to interview companies that have reached massive size and scale. Whether I’m consumable, I guess most people sell… I guess that’s a great question to start. Are most of these product samples done by people who have consumables. Like coffees, soap, shampoos. I don’t think YETIs sending tumblers. I mean…
Doug:
But there’s an opportunity for that and that’s a different world but the majority of our business is from, I’ll use the term CPG, Consumer Packaged Goods and OTC Over The Counter goods. To a lay person, any brand, when you walk into a grocery store or you walk into a drug store, any brand that’s on the shelf is basically a brand prospect of ours that we call on, we talk to, whether it’s the Unilever or the Proctor & Gambles or the Campbell Soups or whoever they may be areour clients. And we educate them on the opportunity. Many brands have never heard of what we do and how we do it.
Albert:
Really?
Doug:
And when we describe that and they’re like, ‘I had no idea you could do that. Wow. That’s really awesome.” And it’s not super expensive. We’re not the low cost provider for sampling, we’re not the high cost. We’re super effective, we have clients that are been with us since the 90s because of that and it’s not like a brand sample’s every month, they advertise every month or market the same brand every month.
Doug:
But typically they’ll sample when they have two things. They want to defend their legacy brand against come challenge innovative brands, look at the Tylenols of the world. You have those legacy brands that have a new formula, new shampoo and conditioner that’s a little different than it was before or new flavor, a new texture for skin cream. Something that when the consumer tries it, it’s going to make a difference. When they try it once, they give them enough cream skin cream, let’s say to try for the week and it makes a difference and they see the difference. And then they have that trial conversion and the lifetime value of a new buyer who’s going to buy from them once a month, once a quarter, twice a year, whatever it is for how many years.
Albert:
Let’s say for example, let’s walk our audience through an example, let’s say I’m an energy… There’s a lot of energy drinks out there. Let’s say I’m an energy drink company. Been around for a little bit, hovering right around a couple million dollars in sales but I haven’t broken through. I think I need to reach new markets, new people and I discover that gamers are an untapped market. They tend to drink energy drinks, they stay up late at night, but there’s a downside in energy drinks.
Albert:
And Hillary’s probably like wait. This is from our last call. We just talked to a gaming person. And they don’t want to be twitchy. Let’s say for example, because red bull makes me twitchy, they want to be… We have a smooth energy drink so we keep you smooth but focused because so you can game all night long. And they come to you and they knock on your door and they say Doug. I want to get this in the hands of gamers. Is that how it works? Do they already have a target audience in mind where they come to you and say, who could we possibly bundle with? Or are they even more specific and say, I want to get into retail box of X. How does this work?
Doug:
It’s the former. And it’s Hey. I hear you. If they’re knocking on our door, they’ve heard from a podcast like this or some of them are marketing communications that we have an Ecomm media network that has 42 different lifestyles. They’re like, “is one of those 42 lit lifestyles appropriate for my brand because my brand is gamers, my brand targets gardeners, my brand targets diabetics or pants conscious woman. We have a network, we’ll pull the network down and say okay. For the want to be red bull that you described, who is… could be a DTC challenger. And they’re not in Walmart or they’re not in Kroger, they’re not a shelf but they’re just shipping direct to consumer. You can buy a four-pack APAC case, whatever it may be. We can arrange to put their sample in the outgoing FedEx packages of who? Newegg.com [inaudible].
Albert:
Name your computer [inaudible]. Yeah.
Doug:
Products, cables, you name it. In there with a cart open. That red bull, or I’m sorry. That energy drink will have a neck hanger on it and or sometimes cut a little piece with it that tells that consumer why this is good for you. It’s not just chemicals. It’s 12 different sets of vitamins or whatever the case may be and then what? And then what do you want them to do with direct result of training? You end up buying it and we’ll make it easy and convenient. We’ll put a QR code on there that directs them right to the site or right to, if there are in retail to Amazon, to Walmart.com to buy. And with one click, with click to cart technology so it’s easy and convenient for that person to sit there, try it or like it, buy it right on the phone.
Albert:
That is sweet. Tell me a little bit about what are some of the success stories that you may have from this? Because I have a feeling some of the brands that you’ve worked with in the past they plateau or whatever and they just need more people to try it. And they hit the right demographic and it pops, I’d love to hear stories that you have of brands that once they got into the right partners, the right demographic, things just fundamentally transformed for them.
Doug:
Yeah. It becomes a not a promotion, it becomes part of their advertising. It does become a staple in our advertising because they could test. Much like could tests anything to see how it works, whether you’re testing digital, you’re testing DM, direct mail, you’re testing outboard, there’s some type of call to action that makes it accountable and responsible to the dollars and the resources you’re investing in that marketing tactic. In this case, yeah. That want to be a red bull, that’s two million but wants to be two billion plus with a 100,000 and have that clear call to action of how many cases did I sell with this QR code versus the QR or another type of call of action to use them with another vehicle and they can track accordingly. We’ve had a hundred thousand campaigns turning to 600,000 of carted value.
Doug:
We’ve had $250,000 campaigns turned into $1.9 million of carted through the cart technology. And why? Because we’re delivering that single solo sample, not with a collection of samples. That single solo sample, to FedEx and UPS right into the person’s home, where again, the trial rates are going to be at their highest because they’re in the privacy and comfort and safety of their home. No one’s around him. And that really came into play with COVID. I get it but those nuances of privacy safety and [inaudible].
Albert:
Okay.
Doug:
Fine. Are going to keep going throughout COVID. They were always part of our program before COVID and COVID just kind of made it more prevalent to the branch to say, I really want to be in there now.
Albert:
Do you have any brand stories that you’re able to share?
Doug:
Well, the Tylenol story is a great one. We were one of the original testers or if not the original tester of Ecomm and back then, it was not even Ecomm. It was just little packages with the L.L.Bean, Eddie Bauer, Cabela’s and Sportsman’s Guide. We did 200,000 pieces, 50,000 each, coded each UPC code accordingly because back then was just coupons. And the redemption rate was so high that they thought there was an issue. There wasn’t an issue and they rolled out to 4 million pieces immediately after that. They went from 200,000 to 4 million pieces why? Because your case, they saw it work and they wanted to be there before competitors, the Advil and Aleves of the world got into it. That was a springboard for them and they’ve been a client ever since J&J and McNeil pharmaceutical.
Doug:
There’s many. We don’t lose clients, which is a nice thing about what we do. It works. It works for two sets of clients right? We’ve got the brand client and the Ecomm retail client but it’s got to work for both parties. Because this has got to be a surprise and delight for the Ecomm retailers customers that we’re riding along with and it’s got to work big time for the sampling customers. Because they don’t just have what? They don’t just have the cost of distribution, they have the cost of the goods too.
Albert:
Cost of goods sold. Yeah.
Doug:
Cost of goods sold. They’re giving that away. 100,000, 500,000, 14 million pieces. And that’s some costs of goods that has to be regained by additional sales.
Albert:
Yeah. And when it comes… I mean, for a CPG product, it makes total sense because we as people, we’re creatures of habit. Once we buy a specific brand, when I buy a certain soap, I buy that soap every time. If I buy a shampoo, I buy that shampoo every time. I buy anything, even tape. [inaudible] scotch tape. We’re like we’re going to buy gorilla tape or whatever. Everything we buy, humans are creatures of habit. If you can get that habit to develop, the lifetime value’s substantial.
Doug:
That’s exactly it. The lifetime value is not about the one-off, one-time buy, it’s hey. You took little buying cadence of toilet paper, of skin cream, of shampoo, of toothpaste, of whatever it may be is based on the product category it’s going to be what it is. It’s once a month or once every six months, a bottle of Tylenol, maybe once a year. If that, you don’t get that many headaches. With 60 tablets in there, that might be once a year. That better be good. Because next year you with it and that medicine accounted for the next 12 years instead of one year.
Albert:
Yeah. And so talk to me a little bit about for the retailer. The retailer of course, they’re going to want to know that QR code, that discount, whatever the buy add to cart, as you suggested is done through their cart, for sure. They’re not going to want no… Let’s just get serious. Nobody wants their customer to go shop at Amazon. That’s a fact of life. Of course you, I would love if you had… Do you have any numbers as to like how many people will just continue buying from the retailer? Because it does make sense that they would, since they bought it from them to begin with. For example, like in your Bed, Bath & Beyond, if I ordered linens, clearly I’ll shop there but then I get the soaps and shampoos or whatever I need maybe I add them to my basket the very next time I go back there, what percentage of people redeem directly at the store and then yeah. I’m curious for the retailer perspective, how does that look?
Doug:
The majority of the brands samples for products that we embed into the Ecomm packages are not driven back to that Ecomm retailer, because that Ecomm retailer like Zulily yet they sell merchandise, they sell apparel, shoes, accessories for moms and kids. They’re not selling Tide PODS, they’re not selling [inaudible].
Albert:
Okay.
Doug:
we’re okay to them to a Walmart.com or Amazon.com to buy that product. It’s a good CX for that customer because they’re trying to buy the product being sampled. When you’re dealing with a larger Ecomm retailer, like a walmart.com, they will allow a sample in their outgoing packages but that has to be bought at walmart on www.walmart.com. That’s really the only one Ecomm retailer that it has that scenario that you just described where it’s driven back only to that one Ecomm retailer.
Albert:
No. That makes total sense. And then from your perspective, I guess, I’d love to hear, what does the retailer gain? Is like the Zulily example?
Doug:
Yeah.
Albert:
I sell moms and kids products, I’m allowing sampled products to ride my, I call it riding rails but travel along my package. And like you said, there might not be a direct benefit immediately because I don’t sell whatever product that is part of the package. How do you convince them to say yeah. You can do that to my customer base. Is it just solely on a guaranteed customer experience or yeah. How does that work?
Doug:
Yeah. There’s two answers to that. One is there’s a revenue standpoint from that. The brand pays us and we pay the majority of that fee to the Ecomm retailer.
Albert:
Got you.
Doug:
The Delta is our management fee for doing that. Yeah. Sometimes it’s life-changing money, other times it’s not based on the quantity of samples or our products that were running through an Ecomm retailer, but it’s incremental revenue from an untapped resource for sure. The bigger part of that is the pleasurable customer experience that Zulily or Reulalaa is giving to their customers. It’s other Ecomm retailers are not. They’re able to give a Revlon eyeliner to a person at Ruelalaa to someone who’s buying a dress for Saturday night or some L’Oreal shampoo and conditioner that they want to try and makes their hair look great for Saturday night. The customer doesn’t typically think L’Oreal, they thank Ruelalaa. Ruelalaa gets organic post of thank yous of. Hey. You did a solid from me. Thanks for going above and beyond. The Art of Shaving starter kit, went into www.brooksbrothers.com packages and I got my $89 shirt but I also got this awesome starter kit from the Art of Shaving. Isn’t that awesome? Thank you very much Brooks Brothers. They’ll thank Brooks Brothers but they’ll buy from the art of shaving.
Albert:
Interesting. It doesn’t have any brand conflict because it actually creates even more brand loyalty. They almost view the retailer as like a personal buyer or something like that.
Doug:
That’s it. And they do know, they being the customer of the Ecomm retailer that hey. That Ecomm retailer, one of my favorite retailers is vetting out products to give to me. Because they’re not going to allow anything in there. It’s got to have a perfect fit. And it’s our job to make sure that when it’s a perfect [inaudible], we send it over to our Ecomm retailer partners for review by marketing legal and fulfillment to make sure all three approve and are okay. Not just okay but want that in there.
Albert:
Yeah. I’d love to hear a little bit about how you guys built this business over the years because one of the things that’s clearly evident talking to you is this is a business that requires scale. I mean, You need to be able to be in a lot of… Or a lot of homes as you said. If these packages aren’t going a lot of homes that it defeats the purpose, talk about how these partnerships and stuff were built over time. I mean like you mentioned you’d been there since the beginning co-founder right? Was this the always the intent like hey. We’re going to build this giant consortium of retailers and e-commerce brands or how did this business start? I’d love to hear how it evolved because I imagine it’d be extremely, almost impossible to knock on everyone’s door and be like hey. I want to interconnect everybody in this network and then I want to let products and brands ride our packages into consumers homes. It’d be like, what are you talking about Doug? Who are you?
Doug:
And I’ll tell you Albert, so many companies have tried over the years when they saw what we were doing and tried to build the same type of Ecomm media network and for a lot of reasons, it’s so tough to do. You can have a couple of relationships with Ecomm retailers but to have 800 plus is really tough to do, manage and fulfill and make them all happy. We have a team, we’ve with two folks here. How we started is, me being the co-founder and another co-founder is my dad. And he’s still with us, not in the business but my role was to talk to catalogers and say, hey. Would you accept in your upcoming packages an insert or sample that would make you extra money? It wasn’t about the CX for them. That’s when we recruited about 50 to do this and our very first campaign was with Tylenol like I told you with 200,000 pieces for a sample. Very first sampling campaign. Because before that it was American express application. Matching that up with high worth sharper images of the world. You were too young to remember Sharper .
Albert:
No. I remember Sharper Image, there’s the catalog of gadgets and stuff. And we were going to storage, like all these gadgets and gizmos, like hey. This is a neon toaster. I’m like, I don’t know why I need one but it looks cool.
Doug:
Exactly. With the success of Tylenol, it really opened us up to the CPG world of hey. Let’s knock on Purina’s door. Hey. Let’s knock on Procter & Gamble’s door. And started doing work with Cheer and Gain, and P&G and Olay and a Secret. And it just kept working for every brand. It really became a really nice situation for the brands, a really nice situation for the Ecomm retailers and me as one of the founders, it made me jump out of bed in the morning why? Because you’re dealing with happy customers or happy clients who are on the Ecomm retailer side and on the brand side. We built the company around that and now put some digital… Not some but a digital stack with every campaign so that consumer knows that they can with a QR code, click the cart to order that product if they so desire. And a fair number of more are doing just that and that’s what makes that ease and convenience for the consumer to go, wow. This is really nice. I’m doing it in my home and it takes just 30 seconds to do.
Albert:
No. That is pretty cool. I mean, but there’s a little bit in that story that I can’t quite comprehend, which is how did you guys convince Tylenol to take such a gamble on you guys? I mean, it seems like a gamble to me, right? What was that first conversation like?
Doug:
This is the story on that. Is, I’m at a conference and it’s the largest marketing conference in the world. And back in the day, this is in the 90s. And it’s a three-day conference. We’re a young company. We can only afford to send one person out 10 by 10 booth. You’ve been there.
Albert:
Yeah.
Doug:
There’s 1500 booths and there’s 30,000 people walking in the house. Last day, last hour. All the other booths are, pull their booth down. And I’m like, I’m standing. This is in San Francisco. We’re in Philadelphia. This is in San Fran. I’m standing here. I’m going to get the whole hour. The last 10 minutes, 10 to seven on a Thursday night, this gentleman walks up and he’s suited up and I’m suited up and everyone else is pulling down and he goes, “what do you guys do?” And I tell him what we do. He goes, “have you ever done a sample?” I was like no. But I think we can do that.
Doug:
A sample in the package. Before that, it was brand inserts, the American Express inserts. We did that test and that’s where it happened. That’s where it started. With that gentlemen from J&J and McNeil said direct mail is not working for him anymore, this is not working for him anymore. Response is going down. Can I try something new? And we tried the catalog FedEx packages, which again, morphed into Ecomm packages and they went from 200,000 to 4 million. When Pepsi did their [inaudible] from RX to OTC, they went from zero to 14 million pieces because they knew that the tactic worked. The in-home tactic where again, privacy, safety and comfort is perfect in-home versus out-of-home and taking it when it’s appropriate for them. It’s a really cool success story that I can talk about for hours because again, because why? Because it works. It’s not like it works a little bit and only works with these types of brands when it’s properly aligned and logistically executed flawlessly, it works wonderfully.
Albert:
I mean, because now this business has been around since then you mentioned 30 plus years. I mean on the surface, just talk to you, makes total sense. You have a product, you haven’t been able to get penetrate or convince enough people to sign up and buy it digitally, especially now, today digitally right? Because reality is how I got to I imagine it’s really hard to convince somebody to try something they’ve never tried before, especially if they already have an incumbent CPG they use. I use Dr. Squatch for example, Dr. Squatch of course has made a huge splash with marketing and it’s soaps. It’s really expensive soaps but even as great as Dr. Squatch does, you and I know this, made and a drop in the market compared to like Dove, you know what I mean?
Albert:
There’s so many people that use Dove and Dial and all that Lever 2000, all those soaps right? And so a company like Dr. Squatch, it makes total sense that they need more people to try it so that they know what it smells like, how it washes you, whatever the product we need, is just products that just have to get in the hands of people. I’m curious. What would you say the repeat rate is now, with the last five years of brands when they come to you or you go to brands whatever, when they do the sampling, how many of them repeat? Because I don’t give a great indicator for our audience. Like how successful this is?
Doug:
I’ll tell you exactly that. It’s 93%.
Albert:
93%.
Doug:
93%. and there’s 7% that don’t come back. Hey, it worked well but our brand overall is failing. Just sampling alone is not going to save this particular brand. Dr. Squatch, which is already a successful brand by itself, DTC, innovator, challenger brands, to all the men’s grooming brands. I love the brand and I’ve received the sample of it in a subscription box. That’s how I found out about it and I went online and saw one of the videos and it’s really well done. But if they did a subscription box that had 25,000, that I just happened to be one of the 25,000, that’s nice. But how can they get to 250,000 or 2.5 million? That’s where, in addition to what they’re doing, they could do some things with a company like us or others. It could be around what we do but we have the scale and the target ability to do 2 million in a monthly basis or based on a certain target.
Doug:
Men’s grooming or men’s apparel or the www.fanatics.com. Let’s say, they can do for a number and they don’t have to do a huge number to test. Let’s make sure it works for you. We’re in no rush, we want to make sure it works for the brand. Let’s do a small number, a hundred thousand. Hey, that’s going to cost you roughly $50,000 and based on the size and the weight of the sample and make sure that their return on ad spend is there.
Albert:
That makes total sense. 7%. when you said that the brand was already struggling, I’m not going to say these were the brands that did it but that would be like, let’s bring some scope for people. It’d be like back in the day when Kodak started to fail, had they sent film to people, probably still wouldn’t have worked. That’s one of the samples people wouldn’t have tried. They’re like, I don’t know what to do with this.
Doug:
That’s exactly it. They tried and that’s where if you’re going to sample, you better have a good product. Because that’s going to expose your brand in awesome ways or if it’s not a good product it’s going to, oh my gosh, that tastes horrible or that gave me a rash. That skin cream gave me a rash. The trial and conversion rates will be high even if it’s a great product. And if it’s a not a good product, don’t bother obviously.
Albert:
Yeah. Don’t bother. Great point. Doug. It was awesome having you on the show today but before you go, we have to ask you a couple of questions from the lightning round. The lightning round is brought to you by Salesforce… Yeah. I’m going restate that. The lightning round is brought to you by Salesforce Commerce Cloud. And what we do here is we ask you quick, rapid fire questions and you give us quick, rapid fire answers. Try not to spend more than a minute on each one. You ready? This is so our audience to get to know you a little better and know how you think.
Doug:
Cool.
Albert:
All right, what’s the one thing that’s going to have the biggest impact on e-commerce over the next year?
Doug:
New tech platforms that make it even easier and more convenient for the consumer to buy.
Albert:
Yeah. Anything that makes it easier to buy?
Doug:
Last three years. This is last three years, including COVID. The number one driving factor of consumers going into e-commerce and buying more and more e-commerce is I saved time, not I saved money, I saved time. If you’re not making it easy and convenient for your customer, Mr. ER, Mr. Ecomm retailer, you better get Shopify or you get to get Shop Pay or you better get something from a tech platform that is one click and you’re done.
Albert:
Makes total sense? What’s the weirdest free sample you’ve ever sent out?
Doug:
Well, we’ve been asked to send out some weird, not so much weird ones but condoms of the world and which stands for Victoria Secret and [inaudible] Hollywood, et cetera but even they said no. Thank you. [inaudible] do that.
Albert:
Yeah. It’s like, this is necessary in society. Like yeah. We just don’t want to baggage it with our…
Doug:
No. They get one consumer complaint, that’s too many.
Albert:
Yeah. That makes total sense. What’s the one thing from 2020 you hope that sticks around in 2021?
Doug:
- Yeah. Well, I think a lot of the consumer buying behaviors will stick around in 21 and beyond. And that’s from online grocery buying. Buying your groceries online, some people never heard of that. All of a sudden 2020, it went from what 16% to 42% of certain amount of your groceries were being bought online. Not all of them. How much of that will continue on. It is a celebrated online grocery by six or seven years. That’s going to stick around. And I look at it much like the adoption, the slow adoption of E-ZPass back in the day. E-ZPass pass [inaudible].
Albert:
Yeah. Wait a second. That was picked up slowly?
Doug:
Slow adoption. Horrendously slowly. I mean, why? Because a lot of reasons from taking jobs away from the toll booth workers, but once someone got an easy pass and they looked at the lane on the right-hand side where people were still waiting in line to give the guy a dollar, they’ll never do that again. When they saw… When consumers in 20 recognized how easy and convenient Ecomm and online grocery is to… Whether it’s my beer, wine or spirits, I can get delivered by Drizly. Okay. Or I can get my dinner delivered by DoorDash. Okay. Then continue those buying behaviors in addition to not just in total replacement of going in store but in addition to, you’ll see that you already saw the celebration of Ecomm by six or seven years.
Albert:
It’s funny how you mentioned them at grocery because I think back to pre COVID, you go into a Whole Foods, it’s of course slammed with the buyers. People shopping for their homes. Now you go to whole foods, it’s still slammed but it’s like with Packers. People that aren’t… There packing orders for other people to be picked up by prime delivery or Instacart or even Curbside, it doesn’t matter how someone’s picking up. The point is there’s people are literally people pushing those carts with tons of grocery bags. It’s like the store is still packed, it’s still full but they’re all pickers and Packers, they’re not actual people buying for themselves.
Doug:
Yeah. Would you rather spend an hour in a grocery store with your kids running around or an hour playing with him at the park? Kind of a no brainer.
Albert:
I’m curious for yourself, one of the things that’s really cool about your story about getting started was meeting a person by chance. Great relationship was a spark, an igniter for your business. I’m curious if you could meet with anyone today and have a sit down conversation. Who would you want to meet?
Doug:
Nope. Mark Lore from Walmart.com previous with Diapers.com.
Albert:
jet.com.
Doug:
Jet of course. He is a guy that I have met a couple of times but real in passing and we had nice quick conversations. We did a lot of business with a lot of his direct reports. There’s a guy want to have beer with or have a glass of wine with one day and really pick his brain about what he sees going in five years, because he is truly a visionary and just freaking smart.
Albert:
There you go. Doug, I appreciate you joining us today on Up Next In Commerce. We’ll see what we can do about connecting you with Mark Lore. He has not joined us on the show so Hilary let’s go invite him. Doug. Thanks for joining us on Up Next In Commerce.
Doug:
Awesome. Had a great time Albert. You were awesome. Thanks very much.
