Samir Balwani 0:03
Hi, I'm Samir Balwani, host of Chief Advertiser and founder of QRY, join me as I talk to industry leaders about their strategies, challenges and successes in managing their advertising and marketing. On our episode today, I have Ben Davis, the founder at TryNow, he's super smart. I've had a chance to know him for a long time. I think the technology is super interesting, and I'm so excited to have you here. Thanks for joining us Ben.
Benjamin Davis 0:31
Samir, I am stoked to be here.
Samir Balwani 0:33
Oh, this is amazing. Let's start with kind of the fun stuff. Tell us about you. Who are you? What is TryNow. How did you get to where you are today? Let's do all the background.
Benjamin Davis 0:43
Yeah. So I've been, I've been in the Shopify ecosystem for just a little under 10 years now, and before TryNow, I was focused on an apparel brand. I was VP of Operations at an apparel brand, helping to build and scale the business, and wanted offer a try before you buy program. We had just incredibly tough Carmen, super soft fabric, but you just can't convey that through a browser window. So had the idea that, hey, if we allow shoppers to try the products, only pay for what they keep, we're going to increase conversion rates, increase LTV, but all focus on just creating a 10x better customer experience. And we did, and the metrics were super strong. Profitability was super strong, but it also added quite a bit of complexity. So my team and I were managing vaulted cards and spreadsheets and tracking orders and doing everything manually. Figured, hey, there's a there's an opportunity here. There's got to be a better way. So that was the genesis for TryNow, we since raised about 24 million in funding to really scale the platform, the product, our go to market motion, and we're very product led organization, so we've been pushing and advancing our product for quite some time to build a really robust platform that allows any brand to very seamlessly offer a try before you buy a platform. So that's the genesis try. Now is very much built by merchants, for merchants. I
Samir Balwani 2:07
think it's so cool, and it's exactly such a key thing, right? Because the concept of like, I want to know what this feels like. I want to try it like I you know, you go and apparel is a perfect example of this, right? You go to a store, you go try it on. Well, you literally try it on before you buy it. So I love this. So one of the biggest pieces of this is, and we talk about this all the time on this podcast, is trying to reduce CAC. Customer acquisition cost is always rising. Pay media has been one of those ways that people have always looked at it. Customer Experience is another one you've touched on this slightly. How do you actually help drive customer experience? How does that lead to customer acquisition?
Benjamin Davis 2:50
Yeah, so our analog is always the physical store. Like you mentioned, just just a few minutes ago, a few moments ago, you said you walked into a store you want to touch and feel the product. Now, imagine you go into that fitting room and I said, Hey, Samir, before you go to the fitting room to try that jacket, a pair of pants, couple different sizes, just give me your credit card. I'll charge you for $317.22 but if it doesn't work, no worries. We'll just issue a refund to your preferred card at about 14 business days. You say that's crazy. There's no way I'm going to pay to try this on. And of course, you would never operate your brick and mortar store that way, but you do your online store, and that's how all brands operate, and we've just grown really accused that. So we help reduce customer acquisition costs, we help improve LTV, we help improve AOV. And when we talk about these metrics, we're always looking at net net of returns, so ultimately, like the net revenue that's captured on the card. And so I think our general philosophy is like when we think about rising tax, when we think about, you know, loyalty challenges, retention challenges, I think when I was running a brand, there were so many solutions, so many different point solutions to solve different problems, personalized sites, and those are all great, and a lot of them are best practices, but there is, like a fundamental flip, and if we can just stay focused on the customer and the end user and focus on delivering and solving their acute pain point, the output is lower customer acquisition costs. And so for us, we're a very kind of input, output focused organization, where, if we just stay maniacally focused on creating the best possible customer experience with guardrails, of course, to ensure profitability, the output is more money in a merchant's bank account. And so for us, it's a it's very much predicated in behavioral economics and consumer psychology. No shopper wants to pay in the face of doubt, will the sweater that I'm wearing be it? Are these? Do. Is going to fit? Is the jewelry going to be flattering? Is it going to be too big on my ear, or to or not big enough? You have all these questions. You have all these doubts, and paying in the face of that of those doubts requires marketers to really overcome these objections and handle these objections really thoughtfully. And which, you know, of course, we don't, but we definitely mitigate them. And so that's, that's the core. Now, of course, the $0 in the cart helps, so shop. It's a button on the product page. Shoppers fill their cart with items to try. They only pay for what they keep. And so when the shopper goes into the cart and Shopify checkout. It'll say amount due today, $0 the amount if kept the value of the cart. And so by keeping that $0 fixed, despite a shopper filling their cart without them to try, we reduce checkout anxiety, which reduces checkout abandonment rates and drives conversion rates. And so
Samir Balwani 6:00
when you're looking at the actual checkout experience for somebody when they're when they're on the PDP, what are they actually clicking? Is it just a checkout or does it say TryNow
Benjamin Davis 6:08
it says try before you buy. Although a brand can adjust that copy. So if they wanted to test and optimize different CTAs, they can it could be a TryNow CTA it could be try before you buy. Try for free, try at home, so it varies by brand, and
Samir Balwani 6:23
then it ships them out the product, and they're only billed once the return window is completed.
Benjamin Davis 6:29
That's right. So it fills the cart with items to try. We add a line on a property to those, to those items, and to those SKUs. It goes through Shopify, checkout, we store and we vault and authorize that card to ensure there's funds available on that card. We ensure that we're able to capture for those funds, for whatever the shopper ends up keeping. We then track that package as it's make, as it makes its way to the shoppers house, and a successful delivery begins the trial period. Now that trial period is adjustable. Our default is 10 days, and it was what it's what we typically recommend for most brands, unless shop, unless merchants need or shoppers need, a longer period to see if the product is effective. So there might be a 14 day or 21 day trial as an example. They keep what they like, they send the rest back. We're integrated with their returns flow. So whether that's loop returns or another provider, we know what the shopper keeps and what the shopper returns. So I was running operations before. So basically, like, the architect of the program is like, do not change operations. We want things to be as easy as possible for the brand, so that there's no no change management required with selling on a try before you buy basis for versus, a buy now basis?
Samir Balwani 7:42
Yeah, I think it's fascinating, because I think one of the things we talk about on the advertising side is this concept around considered purchases, right? So if I'm going to spend a lot of time researching and doing a lot of investigation and considering if I'm going to purchase something or from a competitor, for me as an advertiser, the better I can shorten that consideration window, the more effective my advertising becomes. And it's, how do I overcome a lot of these objections, exactly what you said. So if I'm looking at a competitive set and I can say, hey, I can try that one at home, and yeah, versus, just like, I have to buy that one and then do a return, even though it may, you know, fundamentally, be the same thing. It just the concept of it is so different too.
Benjamin Davis 8:26
Yeah, yeah. I mean, it's very much aligned. It's a great point around the kind of reducing the consideration window. I don't know of many strategies that have done that since free shipping and easy returns. So free shipping and easy returns very significantly reduce the consideration window. Amazon Prime launched in 2000 and I think for 2005 2000 by the time 2009 2010 came around, like Shopify, brand started offering free shipping and easy returns. Bonobos was one of the leaders of, you know, not, not on Shopify, but one of the D to C early movers on free shipping these returns. But if you look at articles from 2000 567, people were saying free shipping and easy returns was a terrible idea. It's never going to work, and it's just kind of incredible how we look at some of these market changes with so much risk, you see risk as opposed to seeing opportunity. And obviously you look fast forward to today, and free shipping is returned some iteration of it doesn't have to be free returns. You could have a restocking fee. It doesn't have doesn't have to be totally free shipping. You could have a threshold, but you fast forward a day, and that's obviously commonplace. It no longer drives that alpha, and it's no longer a competitive edge, but it once was a very big one. And so our kind of focus is what is best for the end user, what's best for the customer. And if you operate with like true customer centricity, the customer. Sure, like the curve always bends in the long run to what is best for the customer, and it's not linear. It's not always a straight line. We sometimes have changes in market dynamics that influence that. But if you're betting on the most customer centric offering in the long run, you definitely will be right. Yeah, it's
Samir Balwani 10:19
actually really interesting. You bring up a really good point that like free shipping and free shipping and easy returns has been the last like, major thing, right? The only other changes, and if you like, follow Amazon as a market leader on this, it's like two day shipping and now same day shipping. Yeah, right, that's right. So for a D to C site that doesn't own the operational logistics of Amazon, those are just unrealistic. And so how can you kind of reduce the objections in other ways? And how can you do things differently in areas where you can compete versus where you can't compete?
Benjamin Davis 10:51
And good point on free shipping, or, sorry, on expedited shipping, and as it relates to Amazon Prime's try before you buy program that's also been a huge kind of silent conversion driver. It was called prime wardrobe for a long time, and then they revised that, expanded it across brands to prime try before you buy, given the conversion rate and LTV lifts that they were seeing and on the senior team, senior leadership team at Amazon. They refer to their prime tribe before you buy program, as the second most successful program in Amazon history, second to Amazon Web Services. So it's been a huge driver of conversion rate lift. But they don't have to break it out in their public filing, so not many know about it and but it's been a huge driver of conversion for them. So Amazon ops, a lot of brands into that, into that offering, yeah, and
Samir Balwani 11:43
I think it makes a lot of sense, right? Exactly what you said, lit, yeah. We always talk about the largest obstacle for beauty and skin care and fragrance is, well, how do you sell something that someone can't smell, right? Like, does it give me a headache? Do I know that it's good for, like, all of those things, right? Yeah, you go to a candle store and what is the first thing you do, you pop it open, you test it out, you turn it around, right? So, like, of course, how do you kind of manage that and, and, you know, brand building and reach, and, you know, being able to convert customers that already know who that love your brand or are hearing about you and are willing to take that first lift. You know, you'll access those early adopters for sure, right? But then, how do you get to the middle mass and the laggards, and how do you kind of reduce that friction for them online? Specifically, you know, things like this are key.
Benjamin Davis 12:32
Yeah, it's good point on, on, on sense and Sephora. I mean, they've built their whole business on the concept of trying products before buying products. You walk into a Sephora store and you are swarmed with a sales associate saying, like, Hey, let me, would you like to sample this? Everything is focused on driving trial. We were, we had our team was in New York for an off site last week, and we're walking down the street on Bleecker Street, looking at a bunch of brands that we either work with, or soon we'll be working with, and we're popping into stores, and there's a group of friends that were talking about a car, and a friend just yells at another friend, like, how could you not test drive a car before you buy it? And I said exactly, you got to try it and like that, sort of like that is just so fundamentally part of our human experience is like you got to try things before you buy things. And in e-commerce, we didn't have the technology to enable that when we started. So, yeah, cool to see the growth that like loop returns and other partners have been driving that enable, that provide the infrastructure to even rethink how we, how we, how we transact online.
Samir Balwani 13:46
I mean, I love this conversation because it automatically translates into one of our thesis is, and we really believe that some of the best CMOs are really good translators and communicators. They can communicate externally, but more importantly, they can translate internally. And so you said it from the beginning, right? Like the whole goal of TryNow is to have limited change management fit in with operations. But I can imagine that a CMO that's looking at this, or even an operations person, will need to have a really clear understanding of how to, how to get a CFO on board, or, like, how to, how to communicate the benefits of this to the CEO. How do you help people kind of manage that conversation? What have you seen there? Yeah,
Benjamin Davis 14:33
so I mean, for us, it's focused on tracking costs at a very granular basis. So within our platform, we have the ability to track and accrue costs that are based off of outbound shipping costs, return shipping costs, stocking costs at the warehouse, both per order and per unit, any other value added services costs. So we understand the true profitability of a TryNow order versus a buy now order, and so we. Like, that's like, that's our focus is not driving revenue growth. Our focus is driving contribution, margin, EBITDA, some unit of profitability, ultimately putting more money in our brand's bank accounts. And it's very kind of non consensus, because a lot of brands think about returns as a lost sale. That's the case with try before you buy, we decouple the concept of a buy zero, where a shopper keeps nothing, versus a partial keep, where a shopper keeps something going back to a store experience. If you, you know, smell two cents, or you try to two items, you keep one, you don't you buy one, you don't buy one. That's on a 50% return rate, that's a that's a sell. Yeah, and so, but you do absorb other costs. So more up on shipping costs because those packages are heavier, more return shipping costs because of the higher rate of returns, more warehouse stocking costs because more units are returned. And so the good, more revenue needs to outweigh the bad, more costs. And that's that's what we're really focused on. And so take Billy Reed as an example. Amen next month. Lt for buy now is $452.20 and that's net revenue per customer after returns. For TryNow it's $811.84 so that's an incremental $360 However, they do pay for $20.35 of returns for a TryNow customer versus a buy now customer, but you're paying 20 bucks to get 360 bucks. So really strong economics now for CFOs. So therefore most of our brands don't use this feature, but we do have a feature called a buy zero restocking fee, and that's really helpful for CFOs, who want to have the confidence and the guarantee that in the event that a shopper keeps nothing, they order three items, they return three items. As an example, the brand has their cost covered. So you can assess a fee that is communicated to the shopper as keep something. Returns are free, keep nothing, just a $20 fee, because that fee is only assessed on the buy zero, as opposed to a partial keep or a shopper keep something. You're not penalizing a shopper who is becoming and going to become a very loyal customer. Instead, you're only focused on shoppers that keep nothing, because you give the shopper this great experience of trying and only charging if they keep nothing. It also affords a brand to charge a higher rate, as opposed to an $8 $12 restocking fee, which doesn't cover the costs of return.
Samir Balwani 17:41
Yeah, that's fascinating. It's so interesting because, you know, I'm looking at this and hearing it, and then I'm hearing examples of, like, business models that we've seen before, and kind of coming together into a place, into a way that kind of helps our our customers actually get what they want. And kind of, your focus is, like, weeding out people that you know are just like, just try, like, curiosity, low intent, yeah, low intent. There was like, Oh yeah, you know what? I could totally like, check this out and call it a day, right? Yeah. That's really interesting. It is a fascinating perspective. I would be curious to hear kind of, what are some of the concerns you hear from CEOs around the TryNow program, because it is like a mindset shift, like it is a true mindset shift for people and and I know you said there's no change management, but I would say that actually the mindset shift is probably the change management. I'd be curious. I'd be curious to hear how you kind of manage that, because I'd love for readers to or listeners to actually take away both. Like, hey, TryNow. Is a really cool experience. You should check it out. Just you know, all everything aside, but also it is this, how do you help executives have this mindset shift knowing that you've had this experience with so
Benjamin Davis 19:01
many so I think we get it, we can get on a call with a brand, and within 10 minutes, we basically know if they're an early adopter or they're a later mover. And so I think, like there is a there's a very big difference between the two, and our motto is trying new things. For a reason. I think trying new things is a fundamental part of the human experience, and some brands really embody that, both with how they run their business, also, you know, maybe themselves personally. But that is, that is key. And so if there is, if you're focused on seeing the opportunity versus seeing the risk, and you instead see the risk of, like, what's the risk of not trying something that's that, that's like, how we initially start? I think in terms of helping brands get comfortable there, I think it starts with just ensuring incentives are aligned. When I was running a brand, i. Everyone wanted to sell, sell a software that required a long term commitment with with a with a high SaaS fee, and so said, Hey, for trying out, we're never going to operate that way. We're just very confident in our products. We want to make this as easy for shot, for merchants to to begin using, for them to see the benefits themselves, and because we can stand here all day and help convey the value of TryNow, but ultimately, they should see the data for themselves, and when they see how shoppers resonate, and they see the incremental revenue that's coming in through their store, that the data does the selling for us. And so what we're focused on is just making it easier for them to try. So everything's order to order, no contracts, just, you know, 2.99% of the net order value only what the shopper keeps, plus 99 cents an order. So if a shopper doesn't keep anything, we don't really make money. And so that that aligns incentives. Now the object yet are, what about return costs? And is the good? Good now way the bad, which we sort of touched on earlier. And then the second would be, what about inventory? So that varies by brand, but if for a lot of brands that may have some breadth in the number of SKUs on their site, but little depth that is just a general challenge for their business, and so we'll TryNow exacerbate that issue that already exists. It's not it's not non obvious initially, but actually TryNow drives more inventory efficiency, because typically a 10 day trial period is much shorter than a 21 or 30 day return policy. With the 30 day return policy, most shoppers return between days, kind of 18 and 22 there's no incentive to return more quickly with TryNow, because they're going to get charged with a significant bill. They're actually initiating, initiating that return on days two, three and four. So those inventory, that inventory comes back and cycles back their warehouse much more quickly. So in many instances, we drive about a 15 to 20% improvement in cycle times.
Samir Balwani 22:13
That’s fascinating. That's really interesting. And not what I expected at all, to be very honest. And yeah, but, you know, personal experience, I absolutely wait till the last day to return stuff, and I'm, I get that for sure. Let's, let's shift gears a little bit, because I do want to talk about, you know, emerging trends of technologies, you guys are what I would consider an emerging trend. But how do you stay ahead of what's or what are you most excited about, kind of coming down the pipe. I'm sure you guys are kind of staying ahead of everything and talking to customers and seeing things TryNow is the next stage of, you know, free shipping, free returns. But what else is out there that you're excited about? Yeah,
Benjamin Davis 22:56
I mean, I think that what I get excited about is new marketing strategies and so, you know, you see the rise of some new platforms, some that take and draw some traction, some that don't. So I think sampling across those is exciting. Obviously, there's been a lot of talk about App love and and some of the and some of the results that they're seeing across select verticals. But I think that broader trend is, is that as meta becomes more and more expensive, there will be new platforms. So tick tock, obviously being one app love and potentially becoming another first select brands. But in general, as markets become as as that, as meta becomes more expensive, more solutions will, will, will, will rise. And so I'm excited about seeing a world three to five years from now where, where meta share of an overall ad budget becomes lower and lower because there are more cost effective channels, and then finding ways to drive efficiency within those channels and so as we think about TryNow as a marketing tool, initially, we work with E commerce teams and marketers to drive conversion, drive efficacy, but we built it through called try links, which allows brands to create dedicated entry points. And those dedicated entry points create really high converting funnels by showing try before you buy only. So when the ad talks about try before you buy, or the land, and then the landing page talks about try before you buy, and then there's a single CTA on that product page that drives try before you buy. It reduces cognitive load, and the conversion rates are incredibly, strong. So take Elwood as an example. Elwood is an apparel brand that has grown incredibly well. Jackson, the CEO there, and Janelle the VP of growth, have just done a tremendous job dropping growth for their business, but their collection page converts at a. 11.1% they're using tri links, and so just becomes, you know, significantly higher converting funnel, but 2x higher than their other funnels by having an offer that's focused on try before you buy, and that replaced the use of kind of discounts that is, like the anti trend I'm not excited about, which is that discounts have over the past two, three years, has just become such a crutch and and there is a retraining of a customer base. And so anything that we can do to reduce reliance on discounts is, I think, very, very important.
Samir Balwani 25:37
Yeah, I’m here for that. Whatever, wherever we can kind of help reduce discounts. They just become such a lever that people continually pull, and then it the lever starts to become the norm, and it's a it becomes a problem. So yeah, I hear you on that for sure. I last question Ben, and I really just, I want to thank you so much for joining us. But if someone wants to learn more about trying out. They wanted to check it out. They want to try it. Where do they go? How do they find you? What do they do? Yeah,
Benjamin Davis 26:07
they can come to our site. TryNow.com take a look at take a look at some of the customer case studies and some of our product pages. Also take a look at our LinkedIn following. We post a lot on LinkedIn, and that's been a key part for our community. And if any of your listeners want to want to chat with me directly, I'd be I'd be happy to chat, just shoot me a note at Ben@TryNow.com I highly
Samir Balwani 26:30
recommend it if you get a chance. I have learned so much from Ben over the years, and he has so much more to share. So thank you so much, Ben for joining us today.
Benjamin Davis 26:38
Samir, thanks for having me on.
Outro 26:42
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