Subscription Box Basics with Julie Ball

Behind the Scenes with Eric Musick of Louis and Lea

April 26, 2021 Julie Ball Episode 71
Subscription Box Basics with Julie Ball
Behind the Scenes with Eric Musick of Louis and Lea
Chapters
Subscription Box Basics with Julie Ball
Behind the Scenes with Eric Musick of Louis and Lea
Apr 26, 2021 Episode 71
Julie Ball

#071 - Julie is joined by Erick Musick, Co-founder of Louis and Lea, an eco-friendly box for moms and babies.

Eric is also the host of The Subscription Box Show, a podcast for people who want actionable, proven, and unbiased tips and tricks to help them start or grow their very own business.

Tune in to hear Louis and Lea's launch story and some amazing tips for prelaunch as well as for growing your subscriber base.

Summary:

  • Introduction of Eric and Louis and Lea (00:02:10)
  • Launch Story of Louis and Lea (00:04:38)
  • The biggest mistake during launch (00:12:46)
  • Deciding between craft boxes or custom boxes  (00:17:00)
  • Testing out the "first box is free" concept (00:30:56)
  • Advice for aspiring subscription box business owners (00:34:13)
  • Bonus trick for email list building (00:34:48)

Links:
https://www.sparklehustlegrow.com
https://louisandlea.com
https://www.thesubscriptionboxshow.com
https://www.facebook.com/groups/thesubscriptionboxshow

Show Notes Transcript

#071 - Julie is joined by Erick Musick, Co-founder of Louis and Lea, an eco-friendly box for moms and babies.

Eric is also the host of The Subscription Box Show, a podcast for people who want actionable, proven, and unbiased tips and tricks to help them start or grow their very own business.

Tune in to hear Louis and Lea's launch story and some amazing tips for prelaunch as well as for growing your subscriber base.

Summary:

  • Introduction of Eric and Louis and Lea (00:02:10)
  • Launch Story of Louis and Lea (00:04:38)
  • The biggest mistake during launch (00:12:46)
  • Deciding between craft boxes or custom boxes  (00:17:00)
  • Testing out the "first box is free" concept (00:30:56)
  • Advice for aspiring subscription box business owners (00:34:13)
  • Bonus trick for email list building (00:34:48)

Links:
https://www.sparklehustlegrow.com
https://louisandlea.com
https://www.thesubscriptionboxshow.com
https://www.facebook.com/groups/thesubscriptionboxshow

Julie:

So you want to launch a subscription box and don't know where to start? Girl, you are in the right place. I'm Julie Ball, a subscription box coach and your host here at Subscription Box Basics, a podcast for new and aspiring subscription box entrepreneurs that want to avoid overwhelm. So grab a coffee, some pen and paper and let's have some fun! Hey everybody, and welcome back to Subscription Box Basics. I'm over here doing a happy dance because this is such an exciting time. I love talking to this guy that I'm about to talk to. We recorded a podcast not long ago on his own podcast, the Subscription Box Show. So you may recognize the name. Eric Musick is here chatting with me today. We're going to talk a little bit behind the scenes about his own subscription box and his launch story. So Eric is the co-founder of Louis and Lea, which is a box for moms and babies. We're going to learn all about that. And what I love so much about that is he and his wife are their own niche. Like they are their own audience, which makes life so much easier when you're a subscription box business owner. So he is also the host of the Subscription Box Show, which if you're not already listening to and not subscribed to, as soon as this episode is over, head over there, subscribe to his podcast. You will not regret it. So without further ado, Eric, welcome to the podcast!

Eric:

Yeah . Super excited to be here. Thanks for having me on Julie.

Julie:

Yeah. When we were chatting on your podcast, I remember like we just had so much fun chatting. You're just like great all around guy. You do know the subscription box industry. And I was like, I've just got to have you on here. So thank you so much for your time and being on here.

Eric:

Yeah. This is fun. This is an honor for me. You're one of the persons. So one of the questions in my box rounders, which is kind of like my lightning round, right? Is who's the most influential person you know in the subscription box industry. And more often than not, Julie Ball is often mentioned. So this is an honor for me to be on here. So thanks .

Julie:

Thank you so much. Okay. So for those who are meeting you for the first time, Eric , would you give them a little background, tell a little bit about yourself and then we'll dive into the box?

Eric:

Yeah, for sure. So first and foremost, people always say like, what do you do, right? I'm a family guy first and foremost. That's what I do. I'm a husband, I'm a father of four boys. We're expecting baby number five. So like you mentioned, you kind of precursor, I, we are our own niche. We totally are. So , niche, niche, we say niche up here. The , so yeah, we we're , we're parents, we have babies and we, this is what we do, we know, and we love so first and foremost, I'm a family guy. And then I also, like you mentioned have a podcasts , the subscription box show, which is a ton of fun to do , we're over 120 episodes now and the Louie and Lea boxes. That's what we do. So there are for moms and babies, and I think this is what we want to kind of dive into, right?

Julie:

Definitely. I want to hear all about your subscription box, specifically, who you serve. So we know it's moms and babies, but on a deeper level, like what, what problem do you solve with it? And then after we talk a little bit about the box, we want to hear your launch story. Everybody loves a good launch story.

Eric:

Yeah. The good launch story. Yeah. I was listening to one of your shows. I think you had Latonya Williams, which is also shout out to her, Right? She's in the, she's in our Facebook group. So starts with a Google search, right? So I love how you guys were talking about that. A lot of us do, but to go back the problem we solve. So Louis and Lea, we are for moms babies. So what has started is I think baby number four, our fourth boy, we were looking for, we love subscription boxes. We have a show up here called Dragon's den, which we watch , which is the equivalent of Shark Tank.

Julie:

Oh, okay.

Eric:

It's called Dragon's den in the UK and Canada. And so we were looking for like a , we're listening to the show. There was a subscription box. This is back in like 2015. It was a repeat, but from an early, an older episode, but the founder of Meowbox, Olivia Canlas was on and talking about subscription boxes and we thought it was such an interesting thing. So we're looking for a subscription box or some kind of box to help prepare us go to the hospital. And for that first kind of year, because we found that we were so unprepared for the other three and having baby, number four, you think your , your , you know what you're doing, but you still have some questions. So like , let's just make it easier on ourselves and get subscribed to something. But there really wasn't nothing with some , pregnancy boxes, like bump boxes out there and things like that , which are fantastic, but not exactly what we were looking for. And we were super into eco-friendly things , you know, very high quality things. There was really nothing out there. So we decided to look into it and, you know, for 18 months we kind of planted it on the side, some stuff, and we want to solve that problem in the industry and being that we were in it, we thought we kind of had a bit of a head hand up on maybe some other people just because we are living and breathing it. And to this day we still do that. So that's how the idea came to be was just through our own experience and lack of finding things that were, we were looking for online.

Julie:

That's so smart, especially because like you said, you're in it right now and you're continuing to be in it with the another baby coming along the way. I think about, so my daughter now is nine and a half. And I think about the things that, like the items that I used when she was, you know, an infant and then a toddler. And then as she got older and older and everything has changed, I recently went to a baby shower, a friend of mine was expecting, and I was like, her registry looked amazing, but I was like, what is the stuff like, I don't know what any of that stuff is anymore because things evolve. People come up with new products to solve problems. And so you guys are in it. So no one better to choose those products and to , to learn about those products and get to know the vendors. I'm sure that's a lot of fun getting to know the vendors that you choose because don't, you use a lot of , local or , um , you do I see you shaking your head?

Eric:

Yeah, for sure. So they might not see that, but definitely shaking my head. So we have two subscriptions, Julie. So the, the idea when it first launched was for exactly something to bring to the hospital for like the birth. So the, you know, the birth of Louis and Lea was kind of like, we wanted birth boxes, something to bring to the hospital to have prepare. And then it morphed into having a quarterly subscription, which we still offer today. So then we wanted the milestones to be celebrated with high quality eco-friendly products from doesn't matter if they were local. But mostly at North Americans, we have a lot of American and Canadian vendors for those, but very high quality eco-friendly things. So, but to prepare the milestones . So the zero to three months , then the three to six, six to nine, nine to 12, which is our birthday box. So that was a quarterly closed loop subscription.

Julie:

I love that!

Eric:

So then we're like, well, how can we keep, you know, the LTV going and have different things like that. So we decided we just launched, we're sending out our first ship of boxes, this February 15th. So I don't know when this is going to air, but we just launched. So we haven't even launched our first batch of monthly boxes now. So now we offer our, what we call our monthly must haves, which again is for that first year of preparation. So if you have a baby, it doesn't matter if it's a newborn up to a year, everything in the boxes , that baby and mom can use during that first year.

Julie:

I love that , that you said , there's kind of an end point to it with milestone quarterly box .

Eric:

Quarterly, yeah.

Julie:

Yeah. That's really interesting. And what you had said, you talked about LTV for those of you don't know, LTV stands for lifetime value. And so think about it if you only serve someone for that first month or that , excuse me, that first year, what happens beyond that and how do you increase that lifetime value when, you know, there's that end point? So that's such an interesting thing to think about, because I don't want to say there's not a lot of boxes that have that end point, but I would say that's not the norm. So how do you, how do you combat that? Is that why you added that monthly box then?

Eric:

A couple of things, yeah. So the reason we first started just because our bandwidth is just being, me and Christine bootstrapped this thing, so we just didn't have the bandwidth to do it all. And the reason the kids we homeschool, we talked about that off air. Like there's just a lot, we're just like, we can't handle thinking past that. Let's just start with the quarterlies, we'll figure it out. And we're definitely looking into exactly that now, like looking at past that, having something where it's going to be year two to four and then maybe have something else and just keep them engaged for the customers that love our products. And the monthly was another thing were exactly that. So right now we're still just doing the first 12 months. But as soon as the 12 months is done with this first batch of people over the next starting January, we're going to keep it going for the two to four. So it's gonna , it's going to keep on going. So that was the ultimate solution was to keep going because the closed loop has some benefits if you want, because people, when they subscribe, it can be a scary word. You don't want to subscribe because they think that they're subscribed forever. Having a closed loop, we make it very clear that, you know, it's for the, those four boxes. So it's less of a commitment for them. They know after four boxes, that's it, right? But so that's good for the customer. Not so good when you're in business because you want to keep the customer. So yeah, the monthly must haves are gonna keep going forever as of right now.

Julie:

Okay. So I have a question because I don't run my box like this. So, so feel free to answer or decline yeah . In the quarterly boxes. So there's four over the year. Are they the same box year after year after year, because you know, you're going to not, you're going to only serve them for a year. Does that make sense? Do you, so do you switch up the products or are they the same?

Eric:

Yeah. So right now it would be we're changing it on a yearly basis. So what, what was in the box next year will be different than what they are this year. Some of the , if there's like a really favorite, like I've just looked at some of the tethers and stuff. We might keep some things, but yeah, in case the mom has a second baby, so this is not just for first time moms it's for second, third, fourth. It could be whatever. It's just, anytime you have a new baby and you want to celebrate milestones and have some essentials in there , you want to, you can resubscribe for sure, because you're rest assured we're going to have to do products and it's going to be a new experience again.

Julie:

Thanks for letting me pick your brain on that. Because I do know of a few models that , with pregnancy boxes , or engagement boxes, that type of thing, where they have a model where it's say you have your nine months, you're going to get nine boxes. And it's the same nine boxes, assuming that they're going to be serving different audiences year after year after year. So they can, you know, find those key curated, you know, boxes and then just keep shipping the same thing. So I was, I was really interested, thanks for it .

Eric:

And it's not a bad model, but I think because you're always getting new customers, there's always going to be pregnant woman again, right? The only thing is, is that, what if the mom really liked the box and resubscribed, that's where it becomes a problem. So I think it's still okay. It's more work for sure. But I think you can maybe recycle some of the products that were a big hit for the moms, but I think, yeah, we like having it fresh and new and we put a lot of time into pre-planning what goes in the boxes every year. It's fun.

Julie:

Yeah. That's a good point. You can reuse some of the same products and even in a different color or a different pattern or something like that. We do that all the time. For us at Sparkle Hustle Grow, we reuse certain items that were like fan favorites, but we'll just get a different version of it. And we'll usually wait about a year to a year and a half before we include it again. Just so there's, you know, enough time in between that most people aren't going to be getting the same item.

Eric:

Yep , exactly. So, yeah. And to touch on your local stuff. So now the monthly must- have boxes. So the quarterlies, it's just as it's, whatever the most high eco-friendly products can have, it's kind of like a premium subscription. The monthly must haves is a lower price points , but you're getting local makers. So we've partnered with local makers. We want to try launching the monthly must- have boxes with like a really well , like with COVID and the trends going, everything going very local and shop local. We've let, let's, let's get all over that. Let's help each other out as local businesses. So what we've done is we've reached out and we work in collab with a ton of local makers and most of the products inside the boxes are handmade now. So the moms really get, well, they're not, they don't even have it in their hands, but they're going to have a really cool idea of knowing that all these things were handmade by other moms. Most of them are , which is other moms in the area. So yeah, it's a cool feeling. And it's a great way if you're looking at starting, it's so expensive to get out there now, right? Whether you're looking at paid ads or anything like that, but you know what, when you utilize and lean on your partners , and your other makers, it's a great way to get organic reach as well.

Julie:

That's a really good point because if they're featured in your box, they're going to want to share that with everybody in their audiences. And they're gonna put that on their website. I love that. That's a really, really good point. Okay. So let's circle back. Tell us , we talked a little bit about your launch story, but what was it really like? Like how long did you, were you in prelaunch ? What were some of the big tactics that you used as you were prepping to launch the first iteration into the world?

Eric:

Yeah, so we, so just to give you a bit of a background on what we are. So I was in a , I worked a job my whole life, very blue collar. Christine's a graphic designer. We had no business experience. So , when we decided to do this, it took about 18 months of planning , luck would it be like, we were looking for something to do together forever since like we were mentioning what the boxes and our, my company offered me a buyout , but she was prorated 18 months. So I took it. I'd been there for 15 years. So it prepared us. I knew it was gonna work for another 18 months for this company. During those 18 months, we prepared as much as we could to learn about business in general. So we can launch a box successfully. We had heard about the pre-launch and pretty naive. We were just like, "Nope, screw the pre-launch . We're just going to launch it." And it's , you know, we're just going to explode because it's such a great idea. It's such a great box and it was crickets. It was just the worst, worst idea ever. So , it didn't, it didn't...not having a pre-launch , it didn't kill us, but yeah, we definitely did a pre-launch for the second iteration. The, so what we did during those 18 months was research sources. I think we were concentrating if you want, like, it was such rookie mistakes, but it's, I think a lot of people do this, is that the concentrate and really focus on things that don't really matter that much, you know, like how much print did we need inside the box? Like, we , you talk about that on your podcast all the time. You guys just put a print inside recently, right? Like , but we were focused on having, you know, just concentrating on stuff that didn't really matter. Like the website stuff, really, what we should have focused on was the problem we were solving and who are we targeting and really trying to get as much emails growing these things that were crucial, having good offers in place. We, so we failed on that part for sure. I know you guys sometimes do wins and losses, and that was definitely a loss for us, but I've talked about it on my own show before where it didn't, it didn't break. It didn't break us. We just learned from that for sure that the next go round , the pre-launch is huge. And to go about it the proper way.

Julie:

Yeah, it's true. I know , my husband, when he launched his box, he was hyper-focused on the products and the experience. And he didn't focus on growing that audience or like building that audience and the excitement. And I'd say, you know, he didn't launch to a lot of people, but, and I stayed out of it because , you know, this was one of those things where he needed to do something on his own too. And I was here for moral support and when he had questions, but he and I are both very stubborn people. And we like, we kinda like to learn the hard way and like, you know, pick ourselves up and go from there. But anyhow, what's really shocked me, not shocked me, but surprised me, I suppose, in a really good way is he doesn't do he barely does any marketing, but he's created a really good experience. And that experience , almost became viral amongst his customers. He runs a box to help families unplug and play together. And it got picked up by a few homeschool or , charter, excuse me, charter schools that they were, it was, it had enough educational materials in it that they were willing to pay for some of these as part of their curriculum. And I was like, Ooh, that is such an interesting way in its own way. It marketed itself. But he focused so hardcore on making that really good experience, but I think we all need to meet in the middle. It needs to be, you focus on that, but you also focus on building that audience so that when you do launch it isn't a crickets .

Eric:

Yeah. What a great point. And I think, yeah, going back to like concentrating on things like there's so many things going on and you see the shiny object syndrome, right? So this is new to us . Everything was new and exciting. You know, like I would see this thing, I would try to do that. I would do this. I would try to take this, do this, do that. And I was pulled in so many different directions that my focus wasn't where it needed to be. I think that's probably the best way to put it. And the focus needs to be on growing your audience as much as you can. And there's great organic ways to do that. There's paid ways to do that, but I think once you get that, you're not going to launch a crickets. And I think starting slow is not a bad thing either. We all want to launch, you know , hundreds of subscribers, but sometimes starting slow, you get the kinks out slowly is not a bad thing. And just kind of incrementally grow after that. Then you're going to be better off sometimes than just starting huge, which rarely happens anyways. So...

Julie:

I would definitely agree with that as there were some kinks that he had to work out and he said to me, he's like, "Wow, I'm really glad I didn't have hundreds of subscribers when I tried to fix this problem or when I decided to switch this." So, and it was interesting too, cause he recently switched from a custom printed box to a craft box with logo tape from Stickermule. And he saved a couple of bucks doing that. And I was like, it's really, you, it's almost like you have to pull your audience. Like, is that really important to you? That it shows up in a custom printed blue box or this is a family box. So it's less important, I feel like, for it to show up looking, you know, shiny and brand new and not brand new, but like all custom printed. So that was a big win for him. Do you guys do, what are your boxes look like?

Eric:

Yeah. Glad you brought that up. So for the quarterly boxes again, we spent so much time, like we were talking about like, not just the boxes. So we do, we love our boxes by the way. So for the quarterly boxes, because the target market is affluent, Eco-friendly, it's a premium subscription, they're a hundred percent recycled material boxes with eco-friendly ink. So everything in there is like algae ink, and it's the packaging is everything's so tons of design on it, custom print boxes. Okay, but they're, they're not cheap, but on a quarterly subscription where with a higher margin and there are things are priced out. You're able to price that in, but it's still, probably too much expensive. So for the monthly's we want to bring things back down like , something that's priced very well. So we brought it to start at 29.99 for the monthly must haves. So what we did is we bought off, we just decided, let's try this, you know , pool our customers, we did tons of surveys during the prelaunch . And it turns out that the people don't care that much. You know, you look at some of the good cause box and some box that just have like a logo on the craft box. So we're like, let's try that. So we decided let's just order a couple of hundred boxes from Uline that we wanted nine, six threes kind of classic sized box. We're going to try to keep our weights under control and under a pound of stuff in there. Something I learned from you, which was that you want to, you know, don't push something that's not supposed to be in your box. Don't rush it in there. So for example, like your example of the books, right? Like the book, we really wanted that book in your box, but it doesn't fit. So we didn't compromise. So we did was we made a rubber stamp with our logo and we rubber stamping our boxes right now. For the first few, for the first shipment of boxes going out. And I think we were going to hit our goals for the month of February. It looks like we're very much on track. So then we're going to use the money that's coming in from the cashflow from month two to pay for maybe for some custom printed boxes. But again, not completely we're just gonna keep it simple, the one logo on the top, maybe one logo inside, something like that. But right now, yeah , we just bought a hundred plain boxes from Uline rubber stamping it, we're going back to like the basics and just kind of really keeping our business lean and simple.

Julie:

Yeah. I think that's really smart and it's not critical that you come out the gate with that custom printed box. So I think you're doing a great job on that, and asking your customers is important. For Sparkle Hustle Grow, I feel like it is important. It is become kind of this part of, it's obviously a part of our brand. They see the pretty pink box show up and we have golden white crinkle cut in there, which feels a little luxurious. So I feel like it is for my particular audience, but you need to, everyone listening needs to ask their own audience cause different audiences will care about things or not care about things. And again, for my husband's box Together Unplugged, but the kids were probably going to color all over the box. Now that it was, you know, a craft box or cut it up and make airplanes out of it or something. So I think it really works for, for him with his audience. And I'm glad to hear that you're doing it, you know, scrappy and make the long-term game plan. Like maybe, you know, month two or three or wherever when that margin permits it, you upgrade.

Eric:

Yeah. There's cut costs and stuff. Right. So like in the beginning, if you want a custom print, like you're also adding to your cost, right? So if that's not part of your budget who cares, like get a sticker, get a rubber stamp, like, figure it out. You can, and once the subscribers start coming in, communicate that with them, right? Like, Hey, we're going to keep improving these things, but you know , we're starting scrappy, whatever you just, you know your niche, talk to your niche, and just communicate that, but that it will get better, but ultimately it's inside the box, right? Like the box is important, but what's inside the box I think is what's the most important part. Cause they're gonna open it up. Yeah. They're gonna look at the logo, but once they open it up, what's inside? Does it solve the problem that they're trying to fix? And is it quality? I think quality. I know I always harp on that. It has to be there because people don't want just cheap stuff anymore, right? Like I think, especially for our box, part of it's because we know what parents want, especially, you know , we're focused on babies and moms, every box, you have one mom product, one or two mom products and you have two baby products. So just even there , like it's not the traditional five products, but it's three high quality handmade products. So even that, so you're not inundated with just stuff, but high quality things in their box. And I think that's, what's important when they open the box is it's stuff they want and need.

Julie:

Yeah. And I just got my Stitch Fix yesterday and they have a craft box with just their logo on it. It is very simple.

Eric:

Yeah. I think that's the one I said, Cause box it's Stitch Fix. That's the one I was thinking about it . Yeah.

Julie:

Yeah. I mean, it's , it's fairly simple. And I had, there was another one that I just recently got and it escapes me right now, but the logo, the branding on the tape was really, really beautiful. It was very colorful and that's what brought the beauty to the packaging. It wasn't, it didn't matter that it was a craft box. My eyes immediately went to that packaging tape and we, so we get ours from Sticker Mule. That's the water activated tape. And my husband recently just invested in, I think it was a couple hundred dollars from you line, the little machine that you put the water activated tape in there. So it actually moistens the tape and it measures it. So you determine how long you want that tape to be. And then you crank it open and it like spits out that tape ready to roll wet. Like all you do is stick it on and seal so..

Eric:

Nice!

Julie:

Yeah. But that wasn't something he had for, you know, the first year of his business. It was one of those things is he's like, okay, it's time for me to invest in this. I'm switching up my box design. And he actually switched up the size of it a little bit too . And you can get really strategic. And the United States Postal Service, I don't know about in Canada, but , um , P S they have a cubic rate shipping. So you can get really strategic about length times, width, times, height divided by 1728 to figure out your cubic tier. And if you can get it under one, you can get way better. Like that first cubic tier, you can get way better pricing than if it's in tier two or tier three. So there's a little strategy behind there.

Eric:

Oh, for sure. Shipping has become a huge thing. Like I know it's , it's gone up everywhere. Like here it's become a big pain point for Canadian subscription boxes. It's actually cheaper for me to ship to the States because we shipped Canada-US. it's less expensive for me to ship anywhere in the States than just 45 minutes away here.

Julie:

Isn't that a shame?

Eric:

Yeah. It's crazy. Yeah.

Julie:

Okay. So we've talked a little bit about your launch story, some of the challenges that you had. So what is one of your favorite things about working in the subscription box industry?

Eric:

Oh, well reoccurring of course.

Julie:

Oh yes . Recurring revenue.

Eric:

Yeah. I think it's also in a location independence. Like we can, we can choose to live anywhere, do your business, which is not, you know , only subscription boxes that have that, of course. But I don't know, subscription industry. I love the, I love the community to be honest too . Like now that I'm plugged into the community, obviously , it's such a great community of people. People want to help each other out. People are always looking to collab or whatnot . So I love the community. I love the fact I can work anywhere and that I can do this with my wife and kids. You know, my kids help out with packing boxes and , especially the older two and it's just a ton and it's just a ton of fun. So I mean, obviously on a business side of things, they're reoccurring revenue. And I think the more I talk to just e-comm people , you know, they're really more and more people are really starting to pay attention to the subscription industry because of what it offers, because costs, rising costs you to attain customers for your customer acquisition costs. They're not going to get any less going in the future. They're going to keep rising, especially with COVID right. So people like, Oh, I'm Eric, you're positioned great. You're working online, everything's going online. And I'm like, it's great, but it's also have some setbacks because what's happened now is that it's not just small businesses like us online anymore, which has never been. But for the majority, not all the big businesses are online. All everyone's selling only online for North America, just say, right? And so now you have the rise of Facebook ads and rise of costs to get noticed because you now you're playing against big competition, right? Amazon, Walmarts . It's not just me getting, trying to get in front. So everyone is, has doubled down online, which also hurts our ability as small business owners to get noticed.

Julie:

Yeah, it's definitely a challenge and it's shifted and but it's one of those things that's changing all the time. COVID or not, you know, you have to keep up with the latest ad trends or be strategic on when you're placing those ads. You know, when it comes to holiday shopping weekend, like Black Friday weekend, all that, we don't even run ads during that. We just tap into our audience because we know we can't compete against the big guys. Our ads are just going to get lost in the mix. So, yeah, but I do love what you said about the recurring revenue is being one of your favorite parts of the subscription box industry. Because I do talk to a lot of shop owners like e-commerce owners that are potentially thinking about adding a subscription or a membership as part of their, you know, streams of revenue. It's just so smart. So, you know, in my small town, there's a little candle shop and there's probably not a lot of foot traffic going in and out of that candle shop right now. And I'm like, you have all this inventory, like tap into your existing audience and send them one once a month or once every other month. And so a lot of companies are starting to think about adding that. And I love that. And I think it's such an easy way. If you already run a shop to add this stream of revenue that is predictable, it's much more predictable. You're, you're not chasing that one customer over and over and over again. It's on, it's on automatic.

Eric:

Yeah. A hundred percent. You know what, it's funny you say that, like I know you're with Cratejoy we're with Bold and we use a Bold subscriptions. They're actually, they're headquartered about 45 minutes from my house. So Jay Myers from Bold, they reached out to some companies locally in Winnipeg. And one of them was an ice cream shop. So ice cream shops typically don't do well in Canada in the winter because, well, it's cold here, but you know what happened during COVID in March, they , everything was shut down, right? So they reached out to people like that. So these ice cream parlors that usually are shut down, whatever, still during March or even it would be right now, they're thriving the open up subscriptions. And they deliver locally to these people's doors. So they , they opened up subscription business. So you don't have to like, think I gotta ship these ice cream containers internationally. You can just do even locally, like these e-comm shops, I think.

Julie:

Yeah.

Eric:

So it's interesting that people are waking up everywhere and how the subscription is getting noticed. Maybe due to everything that's gone on.

Julie:

I'm glad you shared that story about the ice cream. That's such a cool concept. And when I think about it, you know, even places like restaurants here at Panera, they have a coffee membership now, and it's a, it's a subscription model you can go in and I'm not sure what the terms are like how many coffees you get, but darn right. If I go in to get a coffee, I'm also going to buy like a muffin or a Danish or something, you know? And so it's just, it's helping them get someone into that buying mode with them. I was listening to , I don't know if you've ever heard of the podcast, The Product Boss, my friends, Jacqueline and Mena run that. And it's all about, you know, taking your idea to reality when you have a product idea and they were just talking about, you know, when you walk into a retail store, say Target, for example, and they have the dollar spot area at the beginning where it's a whole bunch of smaller items that are, you know , one, two , $3, that type of thing. And they were explaining that that's a psychology thing about just trying to get you into the buying mode with them, the idea of the act of take , picking something up and putting it into your cart and buying something low ticket helps them convince you as a consumer to buy bigger things and more things. You're not going to just stop at the dollar spot. And I was like, "Wow, that's really interesting." And I feel like that's how places like Panera with their little low ticket coffee membership is going to get us in the door and buy more and more stuff. And I imagine they could do that same thing with, you know, the story you just told about the ice cream.

Eric:

Yeah. So smart. I love that it's getting the customer to do give them like subconscious yeses already, right? Instead of nos , I love that. Yeah. I'm not too sure how you would translate that to a subscription box, but some of these coffee companies, like locally that we're partnering up with our boxes too, for, to get good coffee in the mom's hands. They didn't even realize their subscription box company. I reached out to them. I said, Hey, I noticed you guys are subscriptions as well. And they're like, well, no, we're a coffee shop. We offer subscriptions too . I'm like, that's an interesting take. They didn't even realize they were doing subscriptions on their website. Cause they're a coffee shop first. And they happened to offer subscriptions as another part of their business. So , some people are doing it without even realize that they're technically becoming a subscription box company.

Julie:

So funny, right?

Eric:

Yeah. But yeah, I don't know to go back. I don't know how you would translate those little wins, maybe free resources, I guess, which is a classic one, right? And then...

Julie:

Like a lead magnet or yeah. Coupon codes , um , in exchange for the email address , I suppose, that could translate it or, you know, there's probably some boxes and I don't know any off the top of my head that offer some sort of small trial product to just get the product in their hands and to , from a business owner perspective to capture their credit card information in the system then, because once their credit cards in the system, their next sale is going to be that much easier.

Eric:

Yeah. It's nice.

Julie:

And when we do add ons, you know, I don't know if you do add ons in your cart flow in your subscribed flow, but when we have a new subscriber join, we offer them last month's box. If we have any left and excess inventory as an add on , so that it kind of translates in that way too. It's like, you're already buying this. Wait , do you want this too ?

Eric:

Yeah, no, absolutely do add on . It's a great part of it. And it subsidizes a lot of the, the shipping costs and all the costs we put on end , if you have a great add on , and it's priced right cause if, you know, cause you did your surveys and you know what people are willing to pay. We have like something like a 90, we were at 95, I think we're at 96, over 96% uptake on our add-ons right now.

Julie:

Wow!

Eric:

So it's been amazing. And right now we're also testing. So you're talking about free trials were actually, we were trialing out for the monthly must haves. We've never done this before. We're doing the free , the first box is free.

Julie:

So tell us about that.

Eric:

Yeah. So when you sign up to our Louis and Lea, monthly must haves, you get your first box free, but it's with a commitment term. So , of course that's how you, it can't just be obviously like a month a month because there'd be too many. It would be too much loss, right? It has to be on a commitment term, but once you commit to us, we're committing to give you the first box for free. So that's been a really good, really good push on, on the sales. Obviously it's a great offer. Yeah .

Julie:

What is your commitment turn to get that free box?

Eric:

So we first tried it out for the first, for the pre-launch at 12 months. And , I'm doing some consulting with Liam of course , with our mutual friend, Liam. We're going to try that out at six and 12 months now as well.

Julie:

I'm so interested. You'll have to keep us posted on that. We offer one box free with Sparkle Hustle Grow with an annual subscription, but we it's our 12th box. So you have to get through the commitment of your first 11 months and then we reward the last one. And that was just purely from a margin perspective. Like, yeah. So I'll be interested, I'll be following along with that story. So you should do a podcast episode on it.

Eric:

Yeah. You know what, that's a great point. I should, I think we were able to eat some of that margin for those first boxes because of the quarterly subscription...

Julie:

Yeah.

Eric:

offset some of the costs . But I mean, if you can somehow eat that cost, I think it's a great way to try out even if it's a 50% offer, but it all comes down to people think, well, this is how we look at it, right? Just strictly business. So let's say our products , let's just use, you know, my first box is 29 99. That's where it starts at. And let's just say our boxes cost us $15, right? So 50% margin. So that's , that's $ 15 it cost us shipping out. Now let's say my offer wasn't that good? And my Facebook ads would cost me $50-$60 to acquire a customer now because of my great offer, they're costing us $25-$30. So it's actually less expensive. My CPA's around 40, 45. So like , because my Facebook ads are costing me around $25, $30, plus my free $15. I'm giving away. It's actually costing me less to give the box for free. Then I went to get a cold customer on any other offer that we've tested. So , and that's just from testing around things and talking with other people in the industry. And sometimes you got to kind of look at the big picture where it might be less expensive for you to do that kind of offer. Then if you can again, eat it on the first month, right?

Julie:

Yeah. That's so interesting. You really have to do the math. You need to know, you know what you're paying to acquire a customer in the different channels. And then you can compare it to what you predict or what you project that this new amazing free box offer could do. Of course, you got to test it though. You know, you got to put your money where your mouth is and see if it's going to work. And if it doesn't, the beautiful thing is you're your own boss. And so you can pivot, you can change and you can, you know , change up the offer.

Eric:

A hundred percent. Yeah. There's you can change it, you can test it. There's different ways of doing things and not, and it depends on your niche too, right? Like who are you targeting? What are your offerings? There's different ways, different sectors of the industry that things are gonna work others and look at what your competition is doing too sometimes, right? Like , you know, we always talk about studying your competition, not copying your competition and there's certain things that just seem to be working. And if it's working for them, there's probably a reason for that, right?

Julie:

Yeah. No, that's such a good, good point. Okay. So let's, let's wrap it up here. What is one piece of advice that you can share with new and aspiring subscription box business owners, something that you learned the hard way?

Eric:

I think it's getting too deep into the details in the beginning. I'm not focusing on what was important. And I know we touched on that, but it's, that's really what caused us was just like spending too much money on trying to buy too much inventory at first, focusing on the wrong things, rather than focusing on who we were serving and what we were offering and what we're ultimately solving.

Julie:

So get out of your own way, right?

Eric:

Yeah. And I think email collect, like we didn't really, we were always worried about building an email list and it's something we've actually got a nice hack. Now we've got, if you guys can I say my little trick? People love email list building. So we've trialed something. And this is again a good friend of mine, Gary Redmond. He's one of the other cool founders at Buster box, which is with Liam, right? So what they do, they put their email collect flow in the middle of the subscription flow. So what I mean by the subscription flow is, you know, you people go to your website, they click on, you know , get offer, whatever claim gets started, whatever your button is. And then you go through a bit of a flow. So what we've done is we've added a series of little micro-commitments . So for example, you'd click on, you know , the monthly must haves and it's gonna say, are you expecting okay , or are you pregnant and , sorry, expecting, or have you already met your baby? And then they click on that. And then there could be know, depending on your niche, you could have another little micro-commitment question there. Right. So if you had a dog box, right, you would say like, well , how big is your dog, small dog. And then , is your dog a male or female, whatever. And then right next to that, then we have in our flow, the email. So then you have to put in their email to see the offer. So did we don't even show the offers until they put in their email and then it has a little key thing there you have to have is the , you have to click to make sure that they, they know they might be clicking to get emails , marketing emails.

Julie:

Yeah.

Eric:

So they click off the checking box and then it goes to the offers and we've collected a ton of emails. So if you're listening to this and you've, you're already generating traffic to your website, it's a fantastic way to get emails on top of your pop-up. You should have a popup as well, but have it right in your subscription flow, we've collected hundreds and hundreds and hundreds of emails from the traffic. As soon as they go there from the Facebook ads through obviously interested in, they want to see the offer , and then to get to the need to put in there ,

Julie:

You know , good tip. And then your offer, is that your free box or your discount or is that just see what the pricing is?

Eric:

Yeah, so then it goes to my offers, which has there's three offers. We offer a 12 month, six month and month to month. The month to month, you pay the 35.99, the six month and the 12 months you get the free box on a 32.99 and on the 29.99.

Julie:

So do you even have your pricing on the homepage or any other page or do you have to go partway through that flow to see that

Eric:

You have to go through the flow to see it?

Julie:

Oh, that's the ticket right there. Huh? That's where you're getting those emails.

Eric:

That's right. Yep .

Julie:

Oh, I love it. That's so cool. I'm going to have to check that out.

Eric:

And because the offer is so good, people do it, right? So that's why.

Julie:

Yeah. Awesome. Okay. Well, I'm sure there's going to be lots of people who are going to want to go check out your website and get in your subscribe flow and just check out the box in general. So where can people follow you and find you online?

Eric:

Yeah. So if you're expecting, or if you have a new baby or if you're not like a lot of grandmas love to gift this , if you just know anyone like we'd love for you guys to share what we do. So LouisandLea .com , it's L O U I S A N D L E A .com . It's the best place to find us on Instagram. It's at OfficialLouisandLea.

Julie:

I love it. And you have a Facebook group as well for subscription box entrepreneurs. So , I'm sure a lot of people listening would love to be a part of that. Where can they find that?

Eric:

Yeah, Julie's a member of the group and we love having her on, she's always poking around in there. So , yeah, just very simple. The website is the subscriptionboxshow.com or just on your favorite podcast player, just search for the Subscription Box Show. Our podcast will show up , we're on all the platforms there. And then the Facebook group is just go on Facebook and search for the Subscription Box Show Facebook group.

Julie:

All right. All right. People you're listening, go, go join the group. And you can have some more conversation with any of the , with any of us in there. I swear everyone like loves to chime in. And that's what I love about this community is that everyone's so generous with their ideas and their feedback and their experiences. And so there's a lot of great conversations happening in there. Thank you for having that, that Facebook group. I enjoy being a part of it.

Eric:

Yeah. Thanks. I can also plug in my wife's Facebook group for Louis and Lea. So Raising Little Ones, Louis and Lea Raising Little Ones is the Facebook group for moms. So if you're a mama experienced or new mama or expecting mama , um, Christine, we'll gladly have you in there. They talk about all things, mom. I'm not allowed in there. It's women only. So , but you'll meet Christine and my wonderful wife in that group as well.

Julie:

So is that an open Facebook group or is that specifically for subscribers?

Eric:

So yeah. Great point you put there. So right now it's an open group. And at some point when the monthly must haves are underway , we're probably going to open a separate private group for just the members to make it more exclusive. But for now it's an open group for sure.

Julie:

Awesome. Well, thank you so much for everything you've shared. I love chatting and talking shop with you. This is so much fun. I appreciate that you made the time today. And I had to tell this quick story before we wrap it up. I messaged Eric this morning. We were supposed to jump on to do this podcast a little earlier and I'm on a Mac and I restarted my computer. The biggest mistake of the day. I restarted my computer 15 minutes before a podcast interview and I get the dreaded update screen. I'm frantically messaging him and telling him, it says 30 minutes. It says 17 minutes left and keeping him posted on the countdown. But I'm so glad that thank you for your grace with me being late.

Eric:

No, for sure. No problem at all. I'll make the time for you any day, Julie , and by the way, how's the book launch going.

Julie:

Good, good. Everything's great. It's selling, we have it on Amazon, both in a beautiful full color paperback version, and then we also have the e-version so yeah, it's, it's been going really well. And so I would let you know if you ever want to give away any of those, I'm happy to send some, some books up your way and you can send them as prizes. I know you do all kinds of like gaming, like gamification in your Facebook group. So we should do something with that.

Eric:

Yeah, that'd be, yeah, let's do it anytime.

Julie:

Yeah. So if you guys are in the Facebook group, you'll see what I'm talking about. He does like the most active members, the most engaged members.

Eric:

Yeah . Which I thought we should get it in your name, really. It's pretty lame. We need to find something, but yeah,

Julie:

But it's fun.

Eric:

It's totally fun.

Julie:

I know I said, let's wrap this up, but I have to say, when we add gamification elements to our subscription box, it's always really successful. So for example, last month in our private subscriber group for Sparklers, we had the author of the book of the month. And she said, if you post a picture of you reading your book and tag me, I have , 50 sets of affirmation cards. I'm going to set them, send them out to everyone. And then the book was called Thinking Like A Boss, like Kate Crocco. And it was all about getting into that CEO mindset and busting through the lies that we tell us. Like, I need validation from my friends and family, or I'm not enough or this or that. And so we had more social shares than typical because we added this gamification. I love that you do that in your group. And if you guys are listening, think about ways that you might be able to gamify your box or just how people are engaging with your box.

Eric:

Yeah. Like you mentioned, going back to your podcast episode, your packing list essentially is whatever you have, right? Not too long ago. That was great. Like in having that strong call to action, there is key to have it in there. I think it does increase , the people that are likely to have that organic share ability, right? They're going to share that they're going to post it and then you just, you know, you rework that.

Julie:

Yep. All right . Well, I know we could talk forever all morning, but we should wrap it up and I, again, thank you so much, Eric. Everybody, if you're, when you're listening after this episode is over, make sure you go subscribe to the Subscription Box Show as well, so that you can hear Eric's podcast. He records two episodes a week, which is crazy. You used to do three. I don't know how you did it.

Eric:

Yeah. We know what, that's changed. We had to around Christmas time refocused and I talked about that on my Focus Friday. Why did we go down from three to it's just because we're so busy now with the new monthly, is that , yeah, my bandwidth is, you know, and we're still doing everything from our house here in central Canada. So it's, yeah , it's just been busy, but we still want to pump out two episodes a week and that's going to continue. So we're excited.

Julie:

Still two episodes is a lot. So you guys head on over there and check it out. Thanks as always for listening and we'll see it in the next episode.

Speaker 3:

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