Raising an Army of Affiliates: How QALO Partners With Communities to Drive Sales

Offline and online, the world organizes itself into communities based on shared interests and hobbies. And being a member of the right circles can be invaluable for a business owner. On this episode of Shopify Masters, you’ll learn from KC and Taylor Holiday, founders of QALO: the makers of the functional wedding ring. Find out how these two entrepreneurs became valuable members of online and offline communities to promote their brand and roll out a highly effective affiliate program.

by Felix Thea

Last updated 18 Apr 2017

Offline and online, the world organizes itself into communities based on shared interests and hobbies. And being a member of the right circles can be invaluable for a business owner.

On this episode of Shopify Masters, you’ll learn from KC and Taylor Holiday, founders of QALO: the makers of the functional wedding ring.

Find out how these two entrepreneurs became valuable members of online and offline communities to promote their brand and roll out a highly effective affiliate program.

Listen to Shopify Masters below…

Subscribe to Shopify Masters

Download this episode on Google Play, iTunes or here!

"Creating affiliates through people that have organizations and have followings online makes things a lot easier instead of having tangible people on the ground trying to move your product around their gym or whatever it may be."

Tune in to learn

What it means to come in with a palms-down approach when you're working with partners
Why you should form affiliate partnerships with communities rather than individuals
Why you need to over index on customer service when you’re releasing an MVP

Show Notes

Store: Qalo
Social Profiles: Facebook, Twitter, Instagram
Recommendations: Yotpo, RocketCode, ZenDesk, DotPrint.com

Transcript:

Felix: Today, I’m joined by KC and Taylor Holiday, brothers who founded QALO and Common Thread Collective. QALO are the makers of the functional wedding ring, and was started 2013, and based in Santa Ana, California. Welcome, KC and Taylor.

KC: Thanks for having us on, we appreciate it.

Taylor: What’s going on, Felix? How are you?

Felix: Good, good. Let’s kick things off by talking a little bit about QALO. What is … Tell us a little bit more about the story and this wedding ring that you guys sell.

KC: Absolutely. We say, internally, that we create products that inspire commitment, but as you mentioned, we’re most known for creating the functional wedding ring. We launched the website in March 1st of 2013, and it’s myself, and then Ted is the founder with me, as well. We were really a couple of guys that, we were married about one month apart from one another, and so we were both newlyweds, and started wearing metal wedding rings, and realized that we were taking them off more often than we were actually wearing them; and so, whether it be to work out, or go to the beach, or traveling, or whatever, it may be we found ourselves taking our wedding rings off and leaving them places, and then our wives reminding us that we weren’t wearing them.

We were working at the same little place at the time, and so we, sort of in passing, mentioned to one another that we had a difficulty wearing a metal ring, and we decided together to research and see if there were any alternatives out there that made a little bit more sense with our lifestyle, and we found that there really wasn’t anything, so we both looked at one another and said, “If we do this together, then let’s actually give this a shot and try and start a business.” We soon realized we knew nothing about starting a business, but we had taken the first step of deciding to try and pursue it.

Felix: Cool. Then, what were your backgrounds? How did you even know what steps to take once you discovered that, hey, there’s no product like this exists. How did you guys know what to do next?

KC: I myself, we both were living in Los Angeles at the time, and working in Beverly Hills. I was a part-time producer, a full-time bartender, and Ted managed the restaurant and had a much more successful acting career in LA than I ever did, so we were both going through the restaurant grind, which is the story, often, in LA. That was the background that we had. Ted had had some experience previous with working with some companies, and doing a couple startups, and I had sort of a group of friends … With Taylor, sitting here with me, as my brother … That had some experience in this space, and as entrepreneurs, and dealing with startups.

The first step for us was, one, acknowledging that we had no idea what we were doing, but, second, reaching out to the people that we knew had some idea about the journey that we were about to embark on, and so we gained as much information as we could, and then found Shopify, and started from there.

Taylor: Yeah. Then, for me, as KC’s brother, I, at the time, was running a digital marketing agency, so the Common Thread Collective is our agency, and we are an online sales agency, so it was kind of this match made in heaven, where we’re always looking for is passionate entrepreneurs with an awesome idea, who are willing to work hard and have a great product. KC first introduced me to the silicone ring, just passing them out and saying, “Hey, what do you think of this?”

I was married at the time, and shared sort of a similar lifestyle, and thought, “Hey, this is something really cool, and also shares a lot of similar e-commerce attributes for a product.” We put our heads together, and initially moved into about 150 square-foot office together with … My “company” at the time was three of us, and it was just KC at the time, and Ted working from home, and that was the beginning of our journey; and popped the store up on Shopify, and got rocking.

Felix: Taylor, you mentioned that it had the perfect e-commerce attributes. Can you go over some of those? What did you recognize about this particular product, this bran, this marketplace, the made you say this was the perfect one to, or a really good one, at least, to enter into?

Taylor: For sure. When you think about what makes a great e-commerce product, there’s a few attributes. One is the margin: opportunity to go out and acquire customers and still make a profit is really important. The size of it makes it really easy and reduces shipping costs, and allow, and low manufacturing costs allow you to make inventory purchases at minimal risk. The other thing is the communities that we were going after.

We always look for products that have communities that aggregate online and are easy to access and identify, and so [inaudible 00:05:19] customers share some of these attributes, and that, one is being married is a unique identifier that specifically Facebook allows us to access in a unique way, that allows us to be very specific with our marketing, and then, secondarily, the communities between firefighters, police officers, people in the military, people in Crossfit. These are very viral communities that, once a product enters into these communities, it spreads really quickly. Recognizing those attributes of the product, and then knowing who KC and Ted were, and the way that they were going to build a brand that had meaning and purpose behind it, it felt like, “Hey, this has a chance to be really special,” and it has been.

Felix: Cool. I like those three attributes: I want to break them down a little bit more. The first one was about, it needs to have good enough margins for you to have a profit. When you look at products, whether it be QALO or any other products that you launch or are thinking about launching, is there a threshold that you look at? Is there a particular percentage, margin that you recommend store owners try to hit?

Taylor: That’s a great question. I think it depends on the average order value. The higher the AOV, the less the percentage matters and the more dollar figure matters. We love to see 60-plus points of margin on a product, and we love to see AOVs moving somewhere in the $30–120 range. That’s the sweet spot for the companies that we work with: we see that as like, “You meet those criteria, and your shipping costs are relatively low, then we … You have these identifiable communities online, we feel like we can go out and help you acquire customers in a profitable fashion.” Really, just look at your unit economics and understand what is your target customer acquisition cost, and is that doable or feasible, given the available tools online.

KC: I’ll add to that, Felix, real quick: I know you briefly mentioned it to Taylor, but size of the actual product itself, because I know that for a lot of entrepreneurs it’s probably in your living room, or in your master bedroom, or wherever it may be in, so from a storage perspective, making sure a product is reasonably small and able to be stored inexpensively is important, because once you do move to a logistics company, you can sort of rack up the storage fees if your product is pretty large.

Felix: Definitely a good point, and one, I guess a rule of thumb I’ve heard entrepreneurs quote is that if you can pick up the item with one hand, then it’s a good product in terms of size. Anything that requires two hands or even more is going to be a much harder product to store and [inaudible 00:07:38] economically. Now, I want to talk about the community aspect. I think this is important, too, because a lot of times entrepreneurs don’t look at this until the very end. They have a product, they have all of these things set up, but then they don’t look at the distribution of the marketing, or “how do I actually get this product in front of the right people.”

You mentioned that you were able to identify that; there were these particular markets, or these particular demographics that you were going after, that were easily identifiable, and easily targetable. Facebook was one thing that you mentioned. Were there any other ways that you found useful to reach this, the audience, the target customer of yours, other than Facebook?

Taylor: In the beginning, one of the smart things that KC and Ted did was that they went out to these indigenous online communities, if you will, in a sense. An example of that is “Firefighter Wives”. There’s this organization of women that aggregate online that are married, that are part of the firefighter community, and are supporting their husbands, or vice-versa, husbands supporting wives who are firefighters, and they sort of aggregate in these online communities, whether that’s in Facebook groups, or in blogs.

Going out and forming some initial affiliate partnerships within those communities was a real validator that, hey, these are communities that we should, on a larger scale, target and go after. I think the police and fire were initially the ones that we went after. We also … KC and Ted did a really smart thing in forming charity partnerships within those communities, with the Fallen Firefighters Association, and then the national Fallen Law Enforcement Officers, so we were always … Any community that we went into, we always wanted to make sure that we are giving back and authentically engaging with that community in a way that was endemic to who they were. We weren’t trying to just exploit the community, but we were trying to participate and give back to it, as well.

KC: We, in the beginning, which I’m sure a lot of entrepreneurs can understand and share with is that we didn’t have a ton of capital to go out and start spending on advertising digitally, and so for us it was a lot of the initial grind of a couple of guys that did have a ton of money, that had started a business. We’re still working full-time jobs, but we’re trying to get the word out about our product, and once we had exhausted our families and friends, it was sort of “what’s next” in terms of how we get this product our there and help people understand what QALO is. For us, it was about reaching out to firefighter blogs, and to people that were blogging and had a presence online, that were sharing with people in these communities, and emailing them, and building relationships with them, so they had the awareness to help spread the word of QALO, as well.

Felix: I think that’s a good point, that if you don’t have a lot of big advertising budget and you can’t pour all this money into running paid ads, to go after these communities and be a part of the community, and not only can you learn a lot about it, but then they can become advocates, so I got thinking your example. Talk to us a little bit more about how you approach these communities. I think it’s a hesitation for a lot of entrepreneurs, because they don’t want to become over-salesy, they don’t want to become too pitchy and be spammy. How do you approach these communities? You mentioned charity partnerships, affiliate partnerships. What’s the initial conversation like with these communities when you want to start working with them?

KC: I think authenticity is everything. I think that these communities, because they are so tight-knit, they can sort of smell BS a mile away, and so I think it’s about authentically approaching and sharing your own individual story; and then, also, truly understanding how you’re going to be feeding into them and supporting the communities that they exist in.

For them, for instance, with the firefighter community, and the product that we specifically, we’re selling, identifying what your product is and specifically what the purpose is for this community, and expressing very clearly how it will benefit them, for us it was, in dealing with firefighters, the divorce rate in communities like military, fire, is, as a result of the stress of the job, the divorce rate is higher than it is in other communities, and so with the very specific product that we were selling, with the wedding ring, for us it was authentically reached out to them, and realizing that we were serving them a product that could benefit them, that they saw the value in their lives because of what their daily struggles were.

I think it’s, as an entrepreneur, identifying the product that you’re selling and truly, authentically expressing how you think it will benefit people, as opposed to coming off completely salesy, like you’re just trying to make money.

Taylor: I’ll add, one of the things that QALO’s done really well is identifying within a community who the most authentic people are, and developing relationships with them. As an example: in Crossfit, when we started and decided to target the Crossfit community, the question wasn’t “who is the most famous married person”, but it was, “who is the person that people respect the most within this community?” That [inaudible 00:12:06] Jason Khalipa, who actually was a connection that we developed from Shane Dorian, who is another ambassador of ours.

It’s like, we developed these real relationships where people were recommending other like-minded people, and then Jason really opened the door and said, “Okay, guys: here’s what it means to be a part of this community,” and we came in really humbly as, “Hey, we’re not Crossfitters. We don’t understand,” and we listened. We heard what he had to say about who are the right people to engage with, who are people that align with your core values, and so that led us to Jason, which led us to Barbells for Boobs and [inaudible 00:12:35] and the people over there, and now we share an office with them. The relationships have developed in such a real, organic way that … We came in with what we like to call a “palms-down approach”, in the sense that we’re not coming to ask for something, we’re coming to say, to hear from them about what value we can add to their community, what their needs are, and how our product helps to fit them.

Felix: I like that, the “palms-down approach”. You want to try to give value first before you ask anything back in return. In terms of maybe increasing the incentive for people to work with you or promote the product, even if they are big fans already, to help increase that incentive, did you mention that you also do affiliate partnerships with these communities?

Taylor: Yeah. Early on, we definitely had some affiliate partnerships that were really meaningful to our early growth. I think that in some ways some of the systems become difficult to manage its scale for affiliate, and we found other channels to be more effective at customer acquisition, and we really focused more on figuring out ways, like whether it was developing specific product lines that give a portion back to the community, like, we have a Barbells for Boobs ring that, again, a portion goes back to that community, and so they’re incentivized to promote the product to their entire community, as a little bit more effective than individual affiliates for us.

Felix: Mm-hmm (affirmative).

KC: Uh-huh.

Taylor: I think those early days of growth, having as many foot soldiers out, helping to spread the word, is super important, but eventually, when you get to a place of scale, it can become difficult to manage, I think we found.

KC: We found early that, we actually gave it a shot of having people be our affiliates, initially, and it was so hard to manage. When you talk about, as an entrepreneur, when you’re trying to manage all assets of a business, and then you also have people as affiliates that are maybe moving a few products for you, but can reach out to you and can be reasonably needy, it ends up being a bit overwhelming, and then you feel like actually letting those people down. It’s sort of setting yourself up for failure, as opposed to success. With digital the way it is nowadays, we found that creating affiliates through people that have organizations that have followings online makes things a lot less … Instead of actually having tangible people on the ground, trying to move your product around their gym, or whatever it may be.

Felix: Can you say a little bit more about these challenges that you run into, because I think, again, a lot of entrepreneurs out there may start this, with this route, where you have affiliates with individual people, and it’s not too bad at first, five, ten affiliates that you’re working with, but then, as you scale, what kind of issues do you run into?

Taylor: Even the economics of getting them paid on a regular basis becomes something that becomes a pain to manage and handle, and there are definitely tools available to help assist with that. We never got too far into large-scale affiliate platforms to help with that, but that meant, if you’re giving them coupon codes to utilize, you have to balance where you want them to distribute the coupon code, and we ran into a lot of early-on issues where coupon codes were ending up all over the internet, and all on the sort of retailmenot-type sites, and so it’s regulating and tracking purchases, then actually being able to attribute them directly to what they’re doing. It’s kind of the difference between going to a large-scale big box retailer, versus having a thousand small doors. Both can be effective, but just the level of management that the large individual army represents can be difficult if you don’t build the infrastructure around it right away.

Felix: Mm-hmm (affirmative).

KC: I think it’s also like having an employee that isn’t really doing exactly what you need your first employee to be doing.

Taylor: For instance, having control of an entire …

KC: No, we hired our first employee, he came in and … You know, my cell phone was our customer service line, and he was returning voice mails and answering customer service emails, but if I have 10 affiliates out there, none of them are doing what I actually need them to do, and really they’re hoping to spread word of the product very slowly, and it ends up being overwhelming. You feel like you’re managing 10 employees that don’t work in the office, that aren’t doing what you really need them to …

Taylor: Controlling your brand message is difficult, right? The more that you get, early on it’s important that you create some continuity in your brand messaging, and when you have people that aren’t employees, who you don’t necessarily have the time and energy to educate in exactly how you want them to communicate, you can end up with messages all over the place because people are incentivized to sell your product versus tell your story, and I think that that can become dangerous if you aren’t able to manage that program really hands-on.

Felix: Makes sense. Now that you, once you learned that and you decided to move to aggregation and focus more on the communities, or maybe bloggers with bigger followings, what was that transition like? How did you change, how did the way that you ran your affiliate program change once you moved to focus more on that, these larger communities, rather than individuals?

Taylor: I think so. Like we said, I think we formed some big partnerships. Right now, we have an awesome agreement with the US Army, we have Barbells for Boobs, we have the National Fallen Firefighters Foundation, National Fallen Law Enforcement Organization, and so some big-scale, awesome charities with big, large followings that we created specific product for and have in-depth partnerships with, so we focused a little bit more on that.

Then, I think in terms of targeting the community, Facebook really became this thing where we had tremendous access to really specific subsets of, and able to access them at scale, and so between those two areas I think we were able to be much more efficient in our management and our scale and our return, and so that really became more of the focus, rather than any sort of individual affiliates.

Felix: Mm-hmm (affirmative), makes sense. Now that you, take a step back a little bit: now that you decided that this was a market you wanted to enter into before you even start reaching out to these different communities and affiliates to work with them, how did you guys get this product made? What were the first steps to getting this manufactured?

KC: I think that that’s, for a lot of people that are new entrepreneurs or have never started a business before, that that’s the place where you don’t even know where to start. What we utilized initially was the network of friends that we had, and I … We’re from southern California, but I don’t think it matters where you’re living.

Everyone has their network of people, whether it’s someone you went to college with, or their parent’s friend, or whatever it may be that they could reach out to and get some advice, and so we sort of went through our Rolodex of people that we knew that potentially could help us out with some manufacturing, and so Ted had a friend that we reached out to that had a relationship with a manufacturer that was willing to sit down with us, and so we sat down with … [inaudible 00:18:48] went over what we wanted out of our product. We actually sent him our wedding rings, so the wedding rings that …

Felix: Literally gave him yours?

KC: Yes, yes, and said, “Hey, can you make something like this?” I can promise you, it was not a great product initially, and we went through a lot of trial and error of getting the manufacturing correct, but …

Taylor: There were many pizza-fueled QA parties, with lots of friends and family [inaudible 00:19:17] every day. It was trimming flash off of silicone, and lots of real grunt work that any entrepreneur in the early days can understand.

Felix: Yeah.

KC: Absolutely, absolutely. My wife and I used to watch Netflix together and trim rings on our couch.

Felix: Any tips, then, on smoothing out this process that you’ve gone through? If you have an idea for a product, you need to get a manufacturer, but it doesn’t exist yet, or you need to actually have these samples of prototypes made. What have you learned throughout this process that you would be able to use, let’s say, the second time around to improve the process?

KC: I think what I will say, first and foremost, is don’t let a product feel like it’s not perfect stop you from releasing your product. With a lot of … You read a lot of startup books, a lot of books with entrepreneurship talk about MVP, or minimum viable product, and I think a lot of times entrepreneurs get really held up, saying “My product’s not good enough,” or, “I don’t feel great about it,” and then you end up in this endless cycle of trying to improve your product and get it out there before you actually release it to the world, and I think since QALO launched on day one, that we’ve been improving our product and it’s never going to stop, so don’t let that stop you from releasing the product itself.

Initially, with manufacturing, I think the first thing I would do is look at your own network, that you have to see if anyone has any familiarity with it, and oftentimes I think you can find someone, and then, apart from that, the internet has become an incredible resource to be able to connect you with people, be it in a different country or in other parts of America, where you can reach out to them and at least get an initial product developed and a prototype made from them. What I think a lot of people don’t realize is once you have a manufacturer create a prototype for you, you’re not married to that manufacturer.

If you think that the delivery is subpar, that the actual product itself is subpar, you could always go somewhere else. I know myself, even, when I was first starting the business, that you sort of feel this obligation to this manufacturer when you first start: “They made this first prototype for me, so now I have to make the entire run, even though I don’t feel great about this product,” and that’s not always the case. Manufacturers are very hungry and very willing to manufacture for you if they feel like you have a scalable business.

I would try out, potentially, a couple different manufacturers, or if you have someone that you know is a reliable person, that’s a reference for you to point you in the right direction, I think is always a great place to start.

Taylor: I’ll add in real fast: something that [inaudible 00:21:39] did an amazing job on from the beginning is that even if the product had issues, they emphasize caring about their customers and ensuring that they fix whatever problem existed, and so you, if you’re going to go out with an MVP where you have to really over-index that, it was on customer service, and QALO has done that from the beginning, where whatever problem it was …

Like KC said, he answered calls on his personal cell phone for a very long time, and when he didn’t there was someone else that was available immediately to solve the problem, and so if you care you develop, think about developing a relationship with your customer, they’re so willing to walk with you through the journey of product improvement. As long as you have that relationship where they feel cared for, and that you over-communicate any issues, and how you’re going to help solve it.

Felix: There is a great point, there, that I don’t think I have heard anyone say before, which is that if you do decide to go with MVP, you need to, like you say, over-index on that customer service, because you need to make up for some of the potential lost value of the product through sheer care and attention for that customer. I think that’s a great point.

KC: I think when people think of product they think of the actual, tangible product that they’re selling to the customer, and I think it’s so much bigger than that, and I think that it’s the full experience: it’s the experience of your website, it’s the experience of customer service, it’s the experience of the product itself, and even thereafter, on followup. I think a lot of times, especially entrepreneurs, just think, “Once I sell my product, the actual, tangible product, that my job is done”, and the actual product is so much bigger than that.

I think, in the beginning, like Taylor said, when you have a product that you don’t think it perfect but you’re selling it anyway, having transparency with the customers and reaching out to them, and giving them or accepting their feedback and letting them know that you’re continuing to work on it, and providing a great customer experience will make them want to come back. People are forgiving as long as you’re transparent.

Felix: Mm-hmm (affirmative). Did you have all of that ready, that entire … Like you were saying, the product is not just the physical product, but the website, the followup. Did you already have all of that in place right from the beginning, or was this something that you added as you went along?

Taylor: I think the thing that I want to say KC has always had in place, KC and Ted both, is deep care about what they were doing, and so even when the tools are imperfect … The website has improved over time. The first version, KC built himself on a theme on Shopify, with no prior experience, which is sort of the beauty of what you can do with Shopify, and so that’s always improved over time, but any time you’ve ever spoken with Casey or Ted, or any customer actually interacted with them, they knew how much this meant to them and how much they genuinely cared about their interaction with the product, and so the tools have always followed on by the tone set by the entrepreneurs, and how much they actually cared about the people using their product.

I think that … You now see that in the way that if you call QALO, and the customer service that you get, they’ve had customer service employees ship flowers to customers because their husbands were coming home from the military that day. That sort of ethos and personality that they set from the early days, of caring about their customer, now gets carried into all the tools that now, from the post-purchase email flow, to what comes in your product shipment, to all the little things that they do. They haven’t been there since the beginning, and they’ve had to learn their tactics, but I think the care has always been there, has been reflected in the tools now.

Felix: That definitely makes sense to have that foundation in place. I think lot of it falls into place once you have that strong foundation. I want to talk a little bit about this post-purchase followup that you mentioned a couple times. What’s in it? Someone orders a product, how soon do they hear from you guys after they receive the product, and what do they hear from you?

KC: We make sure that that customer experience, from the point of arriving at our website, to even weeks after is a good one, and we want to make sure that it is, and so when we, we have a really quick turnaround on the actual product itself, and so it should get to the customer in about three to five days, and once it does we will send followup emails making sure that they were satisfied with it, and also reaching out, giving them access to be able to leave us reviews. It’s not reviews to pat ourselves on the back and have them always give us five stars. What the review is to give them an opportunity to reach out to us and communicate with us, to make sure that we are actually solving the problems that they have.

You’ll see, if you go on our Facebook, for instance, you’ll see people that say, “I came on here to actually leave a one star out of five, but right when I was doing so QALO customer service actually called me and, on my cell phone, and spoke to me personally, and talked me me through the entire issue, and now I’m here leaving a five-star review.” a lot of it is making sure that you’re understanding of customer needs, and what issues they may have.

we also built out a great platform on our site, dealing with our amazing customer exchanges and returns, so we have a product that is similar to shoes, where people don’t always know their size, or the sizes may run different.

Sometimes people get sized for wedding rings when they get married, and then they never do it again, and so we understood the challenges that customers were claiming to have and we tried to front those problems beforehand, which I think is very important to do. For us, it was about creating a returns and exchange process where customers, it’s very easy to do, because oftentimes exchanging product can be a pain in the butt, and can cause people to not even do it at all, and just be bummer out about the product itself, but QALO, as a company, with our ethos, like Taylor spoke about, is about making sure that the customer has the best experience possible, and so we cover all of the exchange process for the shipping back to us and then the new product back out to you, which is really important; and then we make sure to do followup once the product has been sent to you, to make sure that it was the proper product, itself.

Taylor: Tactically, the post-purchase email [clause 00:27:24], you get an immediate order confirmation email that lays out very clearly what you’ve ordered and what to expect, which I think is an underrated point of clarity for customers, where it’s like, you want to be really clear that they understand what they’re getting, and then when you get your shipping confirmation, there’s a video that says what to expect with your order, and it shows an email package, somebody opening it, and what comes in your order so you know what to expect.

One of the things that QALO did to delight customers early on is they added in these little baggies that are sort of neoprene zip bags that are holders for your ring, that are totally free. It’s a little element of delight for customers, and then two weeks later you get an email for, a review solicitation from an app that we use called [Yappo 00:28:04], which, again, is as much about us solving problems. We have our … The customer service team is dedicated to any three-star or below reviews, going to get an immediate response and outreach from customer service to solve that problem.

Then, we built a custom RNA tool on top of Shopify, with a company called Rocket Code, that helped us to build a super easy returns and exchange tool, because we knew that, like Casey said, with wedding rings that was really important, so we made, give clearer [inaudible 00:28:30] that process that comes in your shipment. Every part of it we try and consider any pain point that the customer might have, and how we can help to solve it along the way.

Felix: I think what you mentioned earlier, about how sometimes the return process is such a pain, and so confusing that a lot of people would just not bother returning at all, and that’s not a good thing, right, because the customer’s just unhappy, and they’re probably not going to use the product or refer others to the product. What mistakes do you see other businesses making when it comes to how they handle exchanges and returns?

KC: I think a lot of problems I see other companies make, even with just customer service as a whole, is for some reason they start a business and it’s like they’ve never been through a bad customer experience before, or they’ve never had to return a product before, and so they can put policies in place that end up being more of a pain for the customer than seeing it as a benefit, and I think, as an entrepreneur, that customer retention is everything, with early adopters, and making sure it’s a full experience. I think in the beginning, as an entrepreneur, there should be a willingness to say, “I’m willing to eat some of this cost,” or, “I’m willing to go above and beyond for my customers to make sure that they’re going to come back and buy again.”

Obviously, that goes back to what we mentioned earlier, where the size of the product and the actual logistics of getting the product out to people … But I think it’s very important to create a process for customers that is beneficial to them when it comes to returns and exchanges, because with that competitive landscape on all fronts and all products, when you deal with companies like Amazon, and other companies that have really beneficial shipping procedures, is that you have to recognize that and understand that you want customers to continue coming back to your website, and so give them the best experience possible on the site.

KC: I would say shortsighted economics is the common mistake, in the sense that they’re evaluating the cost of returns without factoring in the opportunity cost or the loss of the lifetime customer value. I think that’s a big thing that people have to … If you understand the lifetime value of your customer, it allows you to be more aggressive in the way that you support them without concerning yourself about the short-term economic loss. That’s something I think people just take for granted.

Felix: This focus on customer service, you mentioned Rocket Code helping you guys create a custom app for the site, but what other tools and applications do you guys rely on to help with the customer service, because a lot of these delightful moments that you mention, like sending flowers to a customer, how do you even keep track of all that to remember how to delight your customer, how to serve them better?

KC: Absolutely. The first I will say is that the app that Taylor mentioned before for our reviews is huge, and I think as an entrepreneur, when you first start, you don’t really realize how important reviews are, and reviews are everything. Nowadays, that’s how customers are gaging the quality of your product, and the quality of your overall experience as a customer with the company.

For us, from a customer service standpoint, Zendesk is the platform that we use, and it’s been absolutely fantastic. James, who’s our head of customer service here, we had about, ranging anywhere from 8–10 customer service employees at all times. We have some people that come on and help in the heavier volume times for emails and phone calls, but James researched a ton when we first started, and like Taylor mentioned before, my cell phone was the customer service line, initially, and we had a support@QALO.com email address, but when you talk about actually tracking customers and customer experience, it’s very difficult to do that with just a basic email address. Just like our personal emails, it’s very easy to have the email fall through the cracks.

We looked at platforms that could host all of the tickets that we have, or the emails from customers where … We still have that support@QALO.com email address, but it goes into this platform of Zendesk, where it makes it very easy to track customers, to manage customer experience, and to provide outreach for them, which makes it a lot easier.

On the customer service side, we also use what we call macros, which are pretty much generic responses that we’ve created to our most common questions, and when you talk about not having a large staff, and you yourself doing customer service, it’s very helpful to know, “Hey, I’m going to get a ton of questions about sizing, and here’s the response that I give to everyone,” but at the beginning I was typing up every one of those to 10 different people, but it was the same response, and so generating macros through something like Zendesk is very helpful. That’s the platform we use; we’ve used it for over two years. We love it, it’s been fantastic, and we’re looking to even expand with them to make sure that we take advantage of all the resources that they have for our customer service team, as well.

Felix: Awesome. One of the other touchpoints, one you are providing customer service is that unboxing experience: getting the package and actually being delighted to receive it and see what’s inside of it. I think it, I think I mentioned about there was a neoprene bag inside. Tell us a little bit more about your packaging: what’s included in the packaging, and how you, I guess how you designed the packaging and got it made.

KC: We, similar to the product itself and manufacturing, it was sort of an R&D process for Ted and myself when we first started to try and figure out a fun way that the customers could have an even better experience than just having the ring itself, and so when we first started we actually were just shipping it in small, little poly bag with a sticker on the outside for the QALO brand, but when I looked at what the product that we were offering was, and understanding how important it was to the people that were receiving it, I wanted to give them an experience that was better than just the little Ziploc or poly bag itself, and so I wanted to be able to try something that I felt got our brand message across, which is sort of an active lifestyle, and that’s where the neoprene comes in.

That was something that was also functional, like the ring, where they could clip it onto a backpack, or put it in their workout bag, and keep their real wedding ring safe. It was something that I looked into in creating a better customer experience, and I think that packaging’s also important to be able to get your brand messaging across; where, with an e-commerce business, it’s not like a retail store where they’re walking in and seeing a display and seeing all the products lined up.

They’re just getting the one experience with the package and the ring that they’re opening up there, and so we had a booklet, as well, a marketing booklet that helped share our brand’s story and share some of our ambassadors with the customers. We have a sticker with every order, just something fun that people are excited to get; and then we wanted to created packaging, as well, that was fun, got our brand messaging across, and then did a good job with holding onto the product that they had purchased.

Felix: Mm-hmm (affirmative). Any recommendations for vendors, or websites, even, for listeners to check out if they want to start including things like these booklets or stickers, or improving their packaging, in general?

KC: Yeah. For actual printing, we used [dot print 00:35:29].com, is where we print all of our booklets, and it allows you to do a high volume of booklets that are a really inexpensive price, and I think that one way that you can do a great job of retaining customers and making sure they’re coming back to your website, as opposed to a marketplace, is when [products 00:35:45] are shipped through FDA, for instance, you are including any marketing materials, and you’re not giving them the opportunity for potentially a 20% off coupon in there to make sure that they’re coming back to your site, or there’s no added value from a customer experience standpoint, and so if the customers are coming, for instance, for us, to QALO.com and purchasing, what we want to make sure is that we’re giving them a great experience. We print the booklets, and they’ve evolved over time.

Initially, I, myself … I’m the farthest thing from a graphic designer, but I was designing them and figuring things out on Illustrator and Photoshop, and just sort of … Even if it means putting your brand name, putting your mission statement and putting a coupon code on there, is that it’s helping customers come back to your website and giving them a little bit more of an experience in there. Print out booklets, maybe add a little coupon in there, and then helping to share your brand messaging that way, I think is a good way to go.

Taylor: We always like to … Any time we’re developing content or any interaction with the customer, it’s one of the things that I always try to think about, is “mission, magic, money”. If you think about how do we communicate who we are as a brand, what is our mission, and why do we exist, how do you give them a little piece of unexpected delight, that’s magic, that’s not what they expected? As an example, when people used to call QALO customer service, we would use our ambassador’s to lead the voicemail, so they would hear from … Jason [inaudible 00:36:58], Dorian, would actually be the voice on the voicemail, so little, unexpected portions of magic.

Then, how do you set up to make, increase the financial return on the marketing that you’re doing? Like KC said, in the, maybe in your shipment what you want is, we used to have a program with [extoll 00:37:14]. It was like, “Give five, get five”, and so it was a way that we could get the customers more incentive to go and share the product with a friend. You always want to think “Am I checking those boxes? Am I communicating my mission to the customer, helping them connect to the why behind why we exist? Am I giving them a little piece of delight and magic? Am I trying this to make more money off of the initiative?” If you use those as a good checkpoint, I think it’ll improve the sort of interactions that you have.

Felix: Speaking of your ambassador program, I think that’s exactly how I might have seen your product for the first time, represented by one of the ambassadors. Talk to us about this program. How did you even start an ambassador program and get access to all of these athletes?

KC: Absolutely. The first real big-name ambassador that we had was [Andy Dalton 00:38:00]. You talk about going through a network of people that you have … I went to Texas Christian University, which is also where him and his wife went, as well, and so I was good friend with his wife when I went to school there, and so when QALO first started … As any entrepreneur starts, there’s sort of an element of being a bit shameless, sort of an outreach, and asking people for favors, within reason. When QALO first started, I reached out to JJ, Andy’s wife, and said, “Hey, I started this company and I thought maybe you and Andy might like it. Just wanted to send you some product; no expectations, but let me know if you’re interested.” I included the website in there, as well, and she responded back and said, “Andy thinks it’s cool, go ahead and send them.”

I sent them product and didn’t really hear from them after that, and so I assumed, hey, hopefully Andy liked it; and then, him being the quarterback of the Cincinnati Bangles, they were actually on Hard Knocks, the show on HBO, and so I didn’t really know that. We had sent them the product a few months before the pre-season had started for the NFL, and the first episode of Hard Knocks aired, and I didn’t have HBO or anything, and so I was … My phone started blowing up from people sending me text messages of “Did you just see that? Did you see what happened?” I had no real clue what they were talking about, and then someone filmed the clip on their phone and sent it to me, and the actual first episode did about a 5–10 minute segment on Andy’s silicone wedding ring, and asking him about why he wears it, and sort of, this corny pan of while Andy searches for his Superbowl ring, this one will have to do until then …

Felix: Wow.

KC: I know, right? They did about a 5–10 minute segment on it, and it was awesome. That was the first moment that people started to search for silicone rings, and so, Jordan and Taylor, were actually the two guys that were sort of … Taylor being my brother-in-law, but he was obviously freaking out, but Jordan, his partner, as well, was sending me texts saying, “We have to capitalize on this; we actually have to do something,” and that was sort of the first step, where it reached out to us, we sat down with them and said, “What does it look like now that we have seen a positive response and people responding in a positive way to this product? What does it look like to be able to take advantage of this?” That’s where CTC came in.

Taylor: Jordan, my business partner, partner at [CBC 00:40:25] played in the NFL for eight years, so he had a lot of relationships with quarterbacks, and knew Andy, and so the NFL became an entry point, where now you have Darek Carr and Kirk Cousins, and there’s a bunch of NFL guys that are wearing QALO. You turn on on Sunday and you’ll go watch clips of the Superbowl, and you’ll see guys holding the trophy wearing QALO rings, and so that became a big community, with Jordan’s relationships, and our network in the NFL, and those guys.

That initial entry point with Andy kind of teed us off to, “Wow, this creates a lot of interest.” We developed that program a lot; and then each community we went into we tried to identify who we thought was the most influential married person within that community. Within firefighters, police officers, Crossfit, we would always try and find people that matched QALO’s core values, and that were looked at and respected within the community as authentic leaders of it, and so now we have an amazing team.

We felt like … I think Shane Dorian was our first official ambassador, and part of it was just, he lives such a rad life and is such an awesome married man: he does, a hunter, a big-wave surfer, adventurer, he’s got the raddest kids, they live in Hawaii, and we felt like he exemplified everything that QALO wanted to stand for, and so he really …

Another close relationship from Jordan, and we built it out from there. When you have these people who you develop authentic relationships with and they become ambassadors … We still get weekly texts from Shane asking us to send rings to his friends, and it’s not this thing where he’s obligated to put the ring on. We always … We never pay anyone to put the product on: we pay them to share our story once they’re already fans of the product, and I think that’s really important.

Felix: You mentioned CTC a couple of times. That’s short for … Is it Common Threat Collective?

Taylor: Yeah. Common Thread Collective is my agency. We focus on helping people grow their online business, and been doing that for a while, and work with a lot of companies on Shopify, and QALO’s been our client since the beginning, and have had a rad run with them.

Felix: Nice. Speaking of working with these ambassadors, you mention that you want to make sure they’re a fan of it, first, before paying them anything. I think that’s important, because a lot of times people can kind of see through that right there. The target customer can see through, “Oh, this is a paid sponsorship”, but they can really understand when there is an actual value coming from the product, because the ambassador already likes it prior to getting any monetary benefit from it.

When you sit down and start thinking about how to pay ambassadors to help promote your product, to give us your exact terms, what are some key terms that you need to keep in mind when you’re putting together a deal with an ambassador?

Taylor: That’s a great question. I think we think about this very differently than most people, and one of … When we think about paying people, one, we want to respect who they are, and their time and profession. When you ask somebody for what is their asset, as either a celebrity or a professional, time is, one, is their biggest resource, so if you’re going to require time, if you want them to come and do an appearance or a photo shoot day, there’s a respect level in that transaction that, “Hey, I value your time, and you’re important to us, and I want to offer you a commensurate value for that.”

The thing that’s really important when you do these deals is you have to understand how you are going to recoup the value. Don’t depend on them to generate a return on your investment.

What I mean by that is, you have to understand the channels by which you sell your product. If that’s online, then you have to understand very clearly how you’re going to get from using that ambassador to driving a return on value. Whether that’s accessing their audience or using them for your audience, you need to know the pathway to return, and then that allows you to determine what the value is that you should place on that partnership. You need to spend the time, to do the basic math, to say, “Okay, if I’m asking them for three posts on their Instagram account, how many followers do they have, what can I expect as a reasonable click-through rate to my site, and what percentage of those people were going to purchase”, to understand whether there’s a value exchange that’s going to be profitable for you.

If you’re going to use them on your own community, how are they going to impact the conversion rate of your ads? How are they going to help you reach a broader audience? That’s something we spend a lot of time on, is before we do any deal, we understand the value of how we’re going to get value back in return, and that’s really important. That allows us to structure a deal that’s profitable for both parties. A lot of times, we see people do deals where it’s like, “Oh man, we’re going to pay this guy $50,000, or $25,000,” or whatever it is, “But we have no idea how we’re going to get the return,” and that becomes really dangerous.

We always start with understanding: where do we sell our product, how are we going to get value out of this partnership, and how is it going to be mutually beneficial, and how are we going to be respectful of the time that we’ve asked for? I think those will become great structures for doing great ambassador deals.

KC: I can speak to that little bit from the actual entrepreneur, startup side, some of that position: it’s really exciting when you get a big-name ambassador. It’s very easy to get caught up in that and feel like now, all of a sudden, that we went and signed this celebrity, or this special athlete, that now, all of a sudden the revenue’s going to skyrocket, and we better get ready to hang on. It’s not always the case.

Taylor: It’s not magic.

KC: It’s very easy to get caught up in the excitement of “Oh my goodness, we just signed this ambassador,” and completely forget about the work that’s going to come along with some [inaudible 00:45:32].

Felix: Awesome. Thank you so much for your time, KC and Taylor. QALO.com, Q-A-L-O.com and CommonThreadco.com are their two sites. Anywhere else you recommend listeners check out if they want to follow along with what you guys are up to?

KC: We’re @QALO on Instagram and QALO on Facebook. We have over half a million likes on Facebook, which has been really awesome to see the community build. You can see a lot of our content go up there, as well. Instagram’s a lot of fun. I think the team that we have internally, that runs our social channels, are a lot of fun, as well. Then, QALO.com, we have a blog there, as well, that you can go check out and learn about us and our ambassador.

Taylor: Feel free to stop by the office in Santa Ana. We share an office together, here, so look up the address on the website, walk-ins welcome, and you’ll get a great experience if you come by and meet the team.

Felix: Awesome. Thank you so much for your time, guys.

Taylor: Thanks, Felix.

KC: Appreciate it, Felix.

Felix: Here’s a sneak peek of what’s in store for the next Shopify Masters episode.

Speaker 4: Exclusive means that if I sign an exclusive contract with an IP holder, we have the sole ability to create items.

Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com/Masters to claim your extended 30-day free trial.