In this episode of Beyond the Inbox, Sam and John discuss the pricing structure of BattlBox, a subscription service that delivers outdoor and survival gear to its customers. Jon explains the evolution of the pricing structure, which started with a basic box priced at $25 and a Pro Plus box priced at $150. Surprisingly, the Pro Plus box turned out to be the most popular among customers, with 45% of the customer base opting for it.
Transcription from audio:
Sam (00:03): John, welcome to be on the inbox. Thank you so much for taking the time to join us.
Jon (00:07): Thanks. Thanks for having me. Excited to be here.
Sam (00:10): Can you tell us about BattlBox and what led you to co-found the company?
Jon (00:16): Sure. So BattlBox, it's a monthly subscription for outdoor gear, adventure gear, camping gear. Um, we've been around since February, 2015, so we just hit the eight year mark, um, last month, which is pretty cool. So it's a long time. Uh, so how it was founded was, um, so my ex-business partner, um, Daniel, um, so he's no longer involved in, in the company. He, um, was just hanging out with his fiance and he'd watch her every month open up a Birch Box, which is a, a women's, I guess they had, they had men and women's, but it was a women's subscription, makeup samples, beauty products, et cetera. And he saw this excitement when she'd open up each month. And, you know, after watching it a couple of times, he was like, man, I wanna have that, that, that, that joy, that feel. So he went online and Daniel's a avid outdoorsman, couldn't find what he wanted. He wanted a outdoor adventure, um, box. And there, there wasn't one on the market. And, um, the business, him and, um, uh, Patrick, who is my, um, current business partner, the two of them had, uh, ran a business that was very slow in December, basically dead. And, uh, that gave Daniel some time to come up with this idea and concept. And, um, two months later, February, uh, 2015, launched in live.
Sam (02:00): I have so many questions. I want to ask about how you're marketing the company today. Before I dive into those, I want to ask you about Southern Survival and the Netflix show. How did that come about? Tell me more about that.
Jon (02:16): Man, it was, it, it was a process. So we had, um, we, we had brought on, so in, in our infancy, we were sending YouTube bo or boxes out each month to Influencers, YouTubers. It was part of our, we were very heavy off the jump, and it was part of our go-to market strategy. Um, you know, we came across through the, at the time, it's funny to say this existed, our pre-purchase survey, um, asking them, uh, you know, word you find out about us and the usual suspects, but there was another button and people were writing this individual, his name is Brandon Kerr, and he's the face of our brand. They were putting his name in over and over again. We looked him up, he was a paying customer. He wasn't even one of the comp boxes. That relationship turned into a comp box to a, here's a monthly payment, to finally, Hey, do you wanna move, uh, yourself, your wife, and your three kids down, down to Georgia?
(03:17): And really doubled down on this content piece. And, um, he said, he said yes, and he moved down and we immediately, um, not even doubled down. We quadrupled down on the amount of content we were putting out at, at that point, we were only putting out, um, we, we actually really weren't putting much out. He was putting some out for his channel, and it was really just one video a month, which was the monthly review. But we had kind of this idea of, of really growing the community via content and education and training and product reviews. So shortly after he, um, came on full-time and we started rolling and the content started being produced, um, a production studio saw. And, and they reached out to us. And, let's see. So I'm gonna do some reverse math here to, uh, figure it out. So, 2020, I meant 20 19, 20 18.
(04:16): Yeah. So I think, yeah, so 2018, um, they reached out to us, said, Hey, we, we love what you guys are doing. We, um, we, we have some money. We wanna shoot something called a sizzle reel, which, um, I had no idea what that was. It's, uh, comes prior to a pilot. So you shop a sizzle reel, you get the money for a pilot, you shoot the pilot, then you get a money for a season. And that's how TV had traditionally worked. Um, so they came down few days, shot the sizzle reel. They, they were hot and heavy with History Channel, and that's kind of where we thought this was gonna go. History Channel sits on it for six months. They don't tell us yes, they don't tell us no, it's just kind of, um, we don't know. And, uh, after six months, they tell us, Hey, you know, we're gonna pass.
(05:08): So we're a little disheartened, you know, this, this didn't work out how we thought it was going to, and the production studio, and this is a, a decent production studio, high entertainment. Um, they've done, uh, the the Fixer Upper series, which, which is very large, uh, cake Boss. I mean, these guys know what they're doing. And, uh, they're like, no, we're gonna, we have some meetings with Discovery Channel, we're gonna pitch it to them. Okay. Uh, they pitch it to them six, seven months, um, again, and eventually they say, Hey, you know what, no thank you. We're good. All right. So now we've had our heart ripped out twice. Um, and at this point, it's January, 2019, it's been, you know, o over a full year. And they said, well, we have two, um, meetings that we have set for January this month we're meeting with Walmart for their streaming service, which I don't even know if it exists anymore.
(06:03): Um, and we're meeting with Netflix. Well, they meet with Netflix, and Netflix doesn't give money for a, this whole time they're shopping it to get money for a pilot. Netflix doesn't do that. Netflix says, we don't do pilots, we do seasons, so we want it, we'll, we'll, we'll pay for a season. Uh, we write a first refusal on the next seven seasons, or the exclusive rights of the next seven seasons. And, um, that was in January by March, or Yeah, by March we were, everything was in place Steel signed. And then the second half of 2019, they came and filmed for six months. Came back in January, 2020 to, uh, get a few extra shots for just continuation and make everything work on, on what they had built. And then Extreme Radio silence for about six months. And in July, 2020 it launched.
Sam (07:00): Wow. Is a lot. That's quite a journey.
Jon (07:03): It, it is. Um, and working with Netflix is not fun or enjoyable, but it's another story.
Sam (07:10): We'll save that for another time. I want to ask you about the night and day differences in terms of brand awareness. There's a story Matthew McConaughey tells in his book about his movie coming out on the Friday, and no one knowing who he was. And by the Monday everyone knew who he was. Do you see that type of contrast with a show going out on Netflix? Or is it more of a gradual brand awareness happening in the weeks and months of follows?
Jon (07:43): So, so it wasn't Matthew McConaughey fame, but um, you know, relative, um, y Yeah, it, um, so we, we premiered July 4th weekend in 2020, um, leading up, and this is probably just the best example, leading up to, um, July, we were averaging probably about 150,000 unique visitors on our site a month. Um, so not a, not a small amount, a decent amount. Um, in July we had 1.2 million unique. Um, and it's not, it's, people are watching this on their TVs, it's not like they're watching it and it's easy to click. It's not an ad where you can instantly bounce to a landing page and hit our domain. You're having to either type it in directly into the search bar or, uh, in the URL bar. Um, so it's a big increase. Um, now the traffic did not behave, I, I identical to, you know, the, the optimal paid traffic we were, we were acquiring, uh, prior.
(08:49): But no, it's, it still, it's still performed. Um, we had built, um, kind of a, a slightly different journey on our website, um, in preparation for it, instead of having the, the one call to action that was subscribed to the box, we had two above the fold. We had subscribed to the box and then we had, um, products from products from the show. Um, cuz we, we, there was no case study, no one had, um, had a, a brand this front and center on a streaming dropped at once. Service. You can look at other examples like Duck Dynasty, um, where they had the, the brand, but you know, a couple things. One, and wasn't as front and center as ours was gonna be, but two, it was a weekly episode. So it's a slow different build. Right. Um, probably not identical to like a Shark Tank because that's just one, but still it's not, it's not eight episodes all at once. So we didn't know really what to expect and forecasting was difficult, but we had a very strong theory that, um, while we were gonna get more subscriptions, there was gonna be a lot of one-time, one-time purchases.
Sam (10:05): It's really interesting you mentioned that. I recently interviewed a Powell that was on Shark Tank and he talked about how there was the initial promotion for him being on the show and then the follow up as well. And it's interesting, I never considered how there's more of a slow burn with having a TV show. And I guess in some respects as well, you leave a lasting impression in the mind of the viewer because it's on every week.
Jon (10:30): Yeah, no, it's very true. Um, but what's crazy is, is still to this day, we're, you know, two and a half years later, and if you look at, um, our, it's no longer a pre-purchase survey, it's a post-purchase survey because there's the whole, you know, conversion rate optimization piece. But, um, if you look at our post-purchase survey still in, in a given month, about about a six to a seventh of where did you first hear about us is the TV show, uh, which is pretty cool to see that it's that, you know, long in the tooth to continue two and a half years later and be a, um, pretty significant, uh, lead source for us.
Sam (11:10): I want to touch on something we mentioned earlier, the subscription box itself. You have these pricing tiers on the website, and I wanna ask you, how does each tier impact retention and revenue?
Jon (11:26): So, so it's interesting. Um, so, so we had these four tiers, basic, uh, advanced Pro and Pro plus. Um, initially in 2015, um, you know, pricing was different, inflation was different. So our pricing was a little bit less than it is today. Um, we launched with the basic at 25, the advance of 50, the Pro at a hundred and the Pro plus at one 50. And, um, you know, our was going to be the, the basic was probably gonna be the most popular, right? And it was gonna be a little bit of a waterfall where, um, there were gonna be those big spenders that, that had the, um, desire to go with the 150 Pro Plus, um, package. Um, and, uh, we were instantly wrong. Um, the, the Pro Plus is by far our most popular. Um, for the first couple of years, about a third to 35% of our base was in that higher tier.
(12:26): What's interesting though, as we've, as we've grown, um, unfortunately we've, we've had to raise, raise prices and um, still probably don't have the margin we had back then, but, so the Pro plus it's the 1 69 0.99, so one 70 plus plus tax sales, tax plus shipping. Um, so it ends up being about 200 in, uh, now you received the value of the product significantly outweighs that you're getting so much more. Cause we pass a lot of the value, our buying power down to the consumer. But currently 45% of our base is in that Pro plus box. And, um, you look at retention, you look at churn, not only is that the most popular box, but if you look at that cohort individually, it performs the best as as far as L T V, which would make sense, but it performs the best as as retention, uh, as, as they they have longer, longer life, which is, which is, it's, it's such a phenomenal, um, product. Who would've thought that that's the product that, um, is the, the, the flagship.
Sam (13:36): Do you think that has something to do with how each tier is positioned? Because one thing I noticed that I really liked was you have these four tiers and then you have copy for each that says, this is for you. If, and I'm wondering if a lot of people have a natural bias away from I'm a beginner and it kind of nudges them to the next tier. Do you think that has something to do with it? Uh,
Jon (13:58): A hundred percent. I think it's a, it's a few variables. So, so I think by design that copy is, is you're spot on, right? You identified how we position that and that that was the goal. So it makes me happy that, that you see that cause those people don't see that. Um, but yeah, so that's a piece. There's a couple other things that we do. So, you know, we ship out, um, everyone's box at the same time. We go, um, you know, strategically, uh, farthest away shipping first, everybody gets it around the same time because it's a, a surprise model and there's a lot of, there's a subset of our customers that they don't wanna know what's in the box until they're able to open it up themselves. And, um, so, so the interesting thing is, you're a basic customer, an advanced pro, pro plus it doesn't matter, you get the same six to seven page booklet in there and when you open it up, there's, there's a message from us explaining, um, you know, any, any overarching, um, subjects that we wanna address.
(14:58): But then it goes into the basic box. But after that, it also, and it, you know, talks about each item, why we picked it, what, what it, the value and practical use is, but then you turn the page and the advanced products, and if you're a basic customer, you didn't get these. And then the pro and the pro plus. So we've showed everybody what they're missing out on as well. Um, and we see this natural progression where people through time upgrade. Um, and the other piece is, you know, at this point I say on average we're probably send about 50, um, sometimes more, sometimes a little bit less, sometimes a lot more comped boxes out to influencers, reviewers, um, people with, with social presence and people without social presence that are just, um, fanatics of the brand. And we know they're gonna post. And, um, we only send one box out.
(15:56): A comp box is only one thing and it's the Pro plus. We don't send out comped basic advancer pro boxes. If we're sending a box out, it's going to be our flagship product. It's gonna be the best of the best. Um, so any reviews, anything you're seeing online when you're researching, you're only seeing one of our tiers showcased. Um, so at that point, like you are, you, you see the huge value there. If, if you have the, the discretionary income and discretionary funds and, and and desire to, to get this, this, this product, you're going to go with the, the, the big one.
Sam (16:34): So I have so many questions about the upgrading, it reminds me a lot of what the great Dan Kennedy would talk about when he was talking about how you have these tiers and there is always a percentage of an audience that wants to pay the most just because it's a reflection of their status and so on. And Sure. I wanted to ask you, how are you doing this in email? I wanna talk a lot about email and I wanna ask you, if I come through the funnel and I start on a basic, because I identify with being a beginner, how over time are you nudging me to ascend up the money pyramid, so to speak?
Jon (17:08): Sure. Um, so we do, we, we do send, um, emails after the, after the boxes dropped and, and the items are released. We, we do send all customers our own review. So we, we put out our own review, which we showcased the entire entire box. Um, so that keeps, it keeps it front of mind. We, we also have some mechanisms in, in the customer dashboard that, that oftentimes will suggest, um, they upgrade to pro plus, uh, we, we do make it super, super easy to do that. Um, really other, other than that, um, probably the biggest, um, thing that we have that is, you know, some separation is, is the community, right? So we've by design really engaged with our customers. Um, you know, honestly, we, we view them as friends, as family, like they're this community that we're a part of and they're a part of.
(18:07): And it's, it's, it's genuine and it's, it's enjoyable. Um, but with that community comes, um, you know, posting and messages and people sharing that are not us, right? It's just actual customers that are part of that community. And, and you see that almost playing to some of what you described earlier, right? People showcasing stuff, people giving their opinions, but it really just, it sets the stage that, you know, not everyone can afford the pro class. It's a lot of money. Um, it's, it's a lot of money to give to, to, to a brand every month. But seeing the way the community interacts with each other and it's all in a positive way, um, and they're showcasing their pro plus, um, it, it, it makes you, it's a, you kind of wanna do it. Um, so, and it, it's a very indirect piece. Um, but, but it works.
(19:09): Um, it's, it's the occasional text message. It's the occasional email. Um, but, but it's less, it's less those, um, it's, uh, there's on the dashboard there's also some retention pieces. So if, if customer has, um, you know, had X amount of renewals with us and their, their lifetime spend is over y um, and they try to cancel, we will, we will offer them a free upgrade and they do the upgrade and then the following month we let 'em know, Hey, do you wanna stay at this higher tier? And we've shown it to 'em and they've experienced it. Um, and it's a very small cost, the, the, the delta to potentially win that customer over into the higher tier. So it's a bunch of little things all at once working together.
Sam (20:02): That's fascinating. So you are taking a potential churn, you are essentially upselling them and then there's the option for them to downgrade if they don't wanna stay on that pricing tier, if I understand correctly. Mm-hmm. <affirmative>. Yeah. Wow, that's fascinating. On the subject of churn, are you doing this through automations? Do you have a salesperson? I know you mentioned s m s as well. How's this all coming together?
Jon (20:26): Um, yeah, so we've, you know, we've been fortunate that, that we view churn, um, as, as something very, very important to get ahead of years ago, five years ago it was a priority for us. Um, so it's, it's, the process is always getting, we're always improving. Um, so, so currently, uh, the process at a high level, we always renew on the 15th. Um, that's, that's the renewal for everybody. So on the 15th, um, we renew if, if it's, uh, if there's an issue. Um, and, and talking, this is purely on the passive churn side. Um, with the passive churn, it goes to the Dunning process on, uh, and on the 26th we stopped attempting the card. Um, now during those 11 days, we've reached out via email and s m s, uh, all through automation, really, really chatting with them, um, different voices of the brand, different individuals.
(21:29): One of the emails is from Brandon, the face of the brand. One of the emails is from Luke who runs customer service. Um, it's really us being personal saying, Hey, you know, you haven't actively canceled, right? Like, there's something wrong with your account, with your card. So after the 26th, Luke and his team do a, a full export of the customers that we weren't able to, um, cure. So we, with the, with the failed attempts, uh, card declines, et cetera, um, which is typically around 10% on renewal day from the 15th to the 26th, we recover about 70% of the in involuntary, um, on the 26th, Luke and his team pull an export. They then reach out, um, non-marketing emails. There's no images. It's purely just text the CS team out of the CS platform reaching out personally, I mean, it's a, it's a macro, but it's still a per, it's still personalized, reaching out, seeing if they can help any, anything we can do to help, help you fix your account.
(22:36): Um, and then they recover about 50% of those. Um, and there's other variables, right? One's coming from a different server, different platform, one's not, um, one might be hitting the spam folder, one might, one might be making its way through. So at that point, um, they've given up and, uh, that's the end of the passive churn journey. But there's another piece I'll speak to in a second on, on the active churn. Um, it, we, we take a interesting approach. So we, we have a, we have a custom dashboard, right? Um, what we, what we try to do is prevent gamification. Um, and we don't, we don't want the bad actors in there. Um, so, you know, a lot of times the bad actors occur. They exist in, in two places. One, they're going, we might have a strong introductory offer. And they're grabbing that with no intent to be, to be, um, a longtime member of the community.
(23:38): And we don't want to offer them more to stay. We, if you're quitting before your second renewal, then please quit it. It's a loss leader at that point. Um, so our dashboard has no automation in place unless you've had at least two renewals. If you've had two renewals, depending on where you are in your life cycle, um, depending on your tier, depending on your spend, there's a gambit of options that that might occur. Um, the upgrade we spoke about previously, um, we might, uh, give you a discounted rate, uh, temporarily, uh, for the next renewal. We might offer you a free, free item to come on. Um, and there's, there's a, a chance, ba based on your behavior, we might suggest you just skip the month instead of cancel. Um, you know, we have several, I think we last, I I think last time I checked we had like last month, six or 700 people that just skipped, right?
(24:42): They just, they just didn't wanna, didn't wanna ruin, but they didn't wanna cancel. Cause when you cancel, you do lose out on the community piece, the Facebook group, um, you know, the exclusivity of that now on the, uh, because you asked about a sales team. So we have, um, after, so once you've left us, whether it was actively or passively, you're in the canceled category. Um, we have some automation via email and s m s, uh, just traditional winback. We're not reinventing the wheel here, right? Multi-part series trying to get you back, trying to get feedback if you don't wanna come back on why you left. Um, and it's weird to say at the 120 day mark. So, uh, for, for whatever reason we've tested the full gambit. We've tested from, um, day, day five, day 10, all the way to post day 365. But the sweet spot, the works for our brand, which is, I don't know, but we've done enough where there's no mathematical variance.
(25:46): This, this is the best for us on day one 20. Um, we have Patrick on, uh, he's the Winback sales guy. He picks up the phone and calls, um, and, you know, puts an, puts an offer in, explains, um, you know, any upcoming changes, cool things that we're working on and, and gives them an offer. But, um, and again, the 120 day thing is only if the customer has had, had certain criteria, um, if there's any chance that they were possibly a bad actor or not an ideal customer, they don't make it to the, to the lead list, but he calls them and, and he's able to, to actually, you know, win back 60 to 70 every single month, which, which is a pretty big number when you start thinking about what our average order of value size is. Um, and then you're bringing this customer back for, you know, a, a another prolonged period of time. So that's kind of, I think I touched on most, most aspects of it.
Sam (26:50): That is fascinating. That is such a robust approach to Chin and I think it's brilliant. I love this term bad actor because you see it in software as well when you try to churn and you are offered a free month to stay and it's almost conditioning you as a consumer to churn so that you get a free discount. And I love that you have this criteria. You mentioned as well the importance of community. I'm mindful of the time running out here, and I wanted to ask you about what community is for Battle brand and how you are using it to leverage customer loyalty.
Jon (27:26): Sure. So one last thing about, uh, their previous, um, statement. So taking it a step further, once someone takes, um, takes advantage of one of those offers in our dashboard, they will never be shown an offer again, right? Because we wanna, again, prevent gamification. If you're doing it multiple times, um, you know, we could probably improve it. Maybe we don't show it again unless it's six months later. Maybe build some logic like that. Yeah. Could be beneficial. We haven't, it's probably a, not gonna probably move the needle, but it could probably make a, a slight improvement. Um, but yeah, so, so on the community piece, um, so we, so we lead with content, right? Um, we put out a, a large amount of content in, in the past two years, we've, um, started from zero to even mo to an insane amount of short form content because that's how our consumers want to wanna digest.
(28:23): Um, at this point, a lot of the content's engaging, right? It's, it's, it's having co it's getting people to give their opinion on the video or, or engaging and joining a conversation. Um, so there's a lot of community building there. Um, we have, it used to be battlboxforum.com, it was a Reddit style bulletin board. Um, we, since unpopular opinion by many, but we converted it migrated to a Facebook group, um, which, you know, there's, there's pros and and cons to that, but, um, the, the group is, is very unique. So not every, you have to be an active subscriber to our service to be in the group. Um, and not everyone's in there. We have maybe I think right at 8,000 members that are in the group. Um, but it's, it's this thriving community. We have buy sell Trade Day on Thursdays where people are selling BattlBox gear or trading BattlBox gear.
(29:23): They don't have or selling something else. Um, it's, you know, we're not, we don't have a, you have an a a a tent that you wanna sell. It doesn't matter that you didn't get it from BattlBox, right? That's the, the community isn't gonna discriminate. Um, so this, this community is, it's, it's insane and it's, it's grown, but one of the, the real separation is it does run itself, but we're in there too. Um, I'm in there every single day, uh, which is a challenge. Um, cuz there's other parts of the business that need, need, attention and time too. But I, I make it a point to, to go in there and interact and you, you don't get that, um, from, from most other brands, right? You don't have senior leadership in there engaging with, with the consumers. And I think that's a, a big, it's, it's different, right?
(30:16): You look at, um, the, you know, the the need wants scale and where does BattlBox fall? It's probably, you know, farther towards the want versus the need. And we realize that, and there's this consumer behavior trend. It's been going on for years, but it's just continuing where for those brands and products that are on the closer to the want scale, consumers wanna identify, they wanna have some kind of connection and bond with those brands. They, they they buy from. Um, it's very evident when you see these, um, influencers, creators, um, that launch companies after they've built this content and community and how successful they are, right? You think about the, the Kylie Jenners and the, the, I think it, in my opinion, the best example is Mr. Feast. Um, he built this insane community through content and then he was like, oh, I'm gonna have a fast food brand.
(31:13): I'm gonna have this chocolate brand. And they were both instant overnight successes, right? You have, you have brands that spend years trying to get into Walmart and Mr. Be launch a chocolate bar and week, week one it's in Walmart, nationwide, right? Um, so taking cues from them, um, because we both accomplished, obviously they're probably on a much larger scale, but we both accomplished the same thing through content community. We just did it in a reverse order. So I think paying attention to the trends we're seeing on, on that side, the creator side, launching businesses and taking cues, it helps us build the community.
Sam (31:52): John, I think that's an amazing place to end. I have learned so much from this interview. Where can listeners go to learn more about Bottle Box?
Jon (32:00): Sure. So, so our websites BattlBox.com. B A T T L B O X, there's no e in there. Um, you can jump on Netflix, you can search for BattlBox Southern Survival. The name of the show will come right up. Um, if you wanna follow me, I'm probably most active on LinkedIn and um, I have a blog online, queso um, dot com spelled exactly how it sounds. The uh, um, I I try to make it a point on that, on when I write a, about what's going on in our journey to not just include the wins. I, I think showcasing the losses is something people don't do enough and I think it's important, um, cuz there's typically a learning, uh, a lesson or an experience in there. But, um, I think it's just toxic when people just share wins. It's just, it sets everybody up for, for thinking that something's wrong with their business or wrong with their journey cuz they're not having all of these wins. Um, so, so I try to make it a point to to talk about our losses too, cuz the reality is we have way more losses than wins and Mo and everybody does. Right.
Sam (33:09): Absolutely. Well, we'll put those links in the show notes as well. And I wanna thank you again for taking the time to join us, John, and I wish you all the best of luck in the future with BattlBox.
Jon (33:20): Thanks. Thanks so much for having me. This was fun.