Douglas Lim from Crochet Surprise
In this episode of Beyond the Inbox, host Sam interviews Douglas Lim, co-founder of Crochet Surprise and Sub Amplify. Lim shares his insights on building a successful e-commerce business, including the importance of building a community with customers, becoming the face of the brand, and the challenges of marketing in the subscription box and e-commerce industries.
Lim highlights the importance of building a close relationship with customers in order to create a community. He and his wife did all the customer service for their subscription box business for the first two years to get to know their customers and add a personal touch to their interactions. By doing so, they were able to turn customers into raving fans and build a strong community.
Another key takeaway from the interview is the importance of being the face of the brand. Lim stresses that customers want to buy from people they know, like, and trust and that founders should take advantage of this by becoming the face of their brand. He cites Steve Jobs as an example of someone who did this successfully by telling a story and becoming the face of the brand during product presentations.
Lim also discusses the challenges of marketing in the subscription box and e-commerce industries. He notes that profit margins are lower in the subscription box industry due to the expectation of high value for a low price and that paid advertising costs have gone up, making it even harder to make a profit. To overcome these challenges, Lim and his team have pivoted to a paid community membership model, which they believe will be the future of e-commerce marketing.
The podcast also delves into Lim's insights on email marketing and how it is a cost-effective way to reach customers. He emphasizes the importance of planning email campaigns during certain periods of the year, such as Mother's Day, Black Friday, and Cyber Monday, and using Facebook ads and organic marketing to promote their products.
Throughout the interview, Lim shares his experiences with running Crochet Surprise and Sub Amplify and highlights the differences between the physical product and software industries. He emphasizes the importance of balancing marketing efforts between the two brands and delegating responsibilities to team members.
The episode concludes with Lim discussing his plans for the future of Crochet Surprise and Sub Amplify and the trends he sees in the subscription box and e-commerce industries. He notes that physical product-based businesses, like subscription boxes, will continue to face challenges due to the lower profit margins and increased competition. However, he sees a future in paid community membership models, which will provide customers with a more personalized experience and allow businesses to build stronger relationships with their customers.
Overall, this episode offers valuable insights into building a successful e-commerce business, with a focus on building a community, becoming the face of the brand, and adapting to changes in the industry. It is a must-listen for anyone interested in e-commerce and subscription box businesses.
- (00:00) Introduction
- (01:14) Douglas Lim's background and experiences with Crochet Surprise and Sub Amplify
- (03:00) Becoming the face of the brand and building a community with customers
- (05:30) The challenges of marketing in the subscription box and e-commerce industries
- (08:08) The benefits of using email marketing
- (10:19) Sub Amplify and pivoting to the paid community membership model
- (16:02) Overcoming challenges in driving reviews for the app
- (17:39) Balancing marketing between the two brands
- (20:22) Managing a small team and delegating responsibilities
- (24:54) Future plans for Crochet Surprise and Sub Amplify and trends in the subscription box and e-commerce industries
- (27:50) Outro and where to find Douglas Lim
Read the transcript:
Sam (00:00): Doug, welcome to Beyond the Inbox. Thank you so much for taking the time to join us.
Douglas (00:05): Oh, it's an absolute pleasure, Sam. Thanks for having me on.
Sam (00:09): I wanna start by asking you to tell us about how you and your wife started Croque Surprise and grew it to be one of the biggest croque subscription boxes in the us.
Douglas (00:20): Yeah, great question. So, one day, oh, a few years ago, one day my wife and I were sitting on a couch and we were just we really wanted to get into e-comm and we just thought of, you know, different ideas and one day, yeah, just hit upon us that, 'cause my wife loves crocheting, it's her passion. I'm more the marketing tech guy. So we thought, well, why don't we bring it together? And at that period of time, there was like no crochet subscription boxes. And so yeah, we, we literally were one of the first to launch. And that brought some challenges as you know, when you're first to market, you've gotta educate the market. So a lot of our marketing was just educating what is a crochet subscription box. But then we had competitors come on and then that helped educate the market and it made it easier for us. So yeah, we, we grew it to be one of the largest crochet subscription boxes in the us so pretty proud of that.
Sam (01:18): So let's dig into that a little more. You and I were talking in our pre-interview and we talked about Facebook ads. Yes. I wanna ask you, yes. How did you use Facebook ads as your primary acquisition channel for customers? And what creative strategies did you use to capture people's attention in the beginning?
Douglas (01:35): Yeah, that, that's a great question, Sam. So nowadays, a lot of the, a lot of Facebook ad experts and a lot of the narrative is around doing very good creatives on your ads. And when we ran our Facebook ads this is going back 2016, 17 we were doing awesome creatives then. So even before it became like the buzzword now, and underneath it, it's the same marketing principle. It's the fact that people are looking through their Facebook feed, they're scrolling, and you just need something that really captures their attention. Something that just forces them to stop, have a look at your product and something that channels that desire that they have internally to go, Hey, I've gotta check this out. And so what we did was we had a stop motion video. So stop motion is like literally our box being opened up in real time, but in a, in slowed down.
(02:29): And yeah, we literally found another guy who we'd become friends with on another subscription box Facebook group, who kind of posted a similar video that he'd done of his subscription box. And we reached out to him and said, Hey do you mind doing one for us? And he's such a nice guy, he wanted to do it for free, but we're like, no, gotta give you some money. 'cause You know, we appreciate your time. And yeah, thankfully he did it. And by running that ad, I literally had that same creative for like, almost a whole year. 'cause It was performing that well. Things are obviously a little bit different now, but back then and I suppose you could still get away with it depending on how good your creative is. Yeah, it, it was literally just a stop motion video of the box being opened.
Sam (03:16): Who or what was informing your marketing in the beginning? Was there anyone in particular that influenced how you thought about some of these ideas?
Douglas (03:27): Ooh, that's such a good question. Truthfully, I think we, we kind of just discussed it together. So the way that my wife works, she's our target market. She's female, older generation 40 to 60. So she was our perfect target market. So it, I think it was just a combination because your, your ideal customer profile is actually the business owner as well. We kind of just brainstormed that idea and yeah, just, we weren't really influenced by anyone at the time, but we kind of stumbled upon it, so to speak together.
Sam (04:06): I know you are a Drip customer, and I wanted to ask you about your experience using Drip to grow your email list. Tell me more about that.
Douglas (04:15): Oh, yeah. Drip's been so influential. So when we, when we installed our, our email flows with Drip we've had, we've set up about eight automated campaigns using Drip. And our broadcast campaigns are as well go through Drip. So our post-purchase campaigns, card abandonment we've got a series called Buy or Die series, exit Intent browser abandonment, like we've got all these flows, customer win back, all set up with Drip. And I think the thing that made it really easy to drip, 'cause I've used a lot of email marketing programs, like I've used MailChimp, I've used Active Campaign, I've, you've name it, I pretty much use them all, but I settled on Drip because it's just, the UI is just really, really easy to use. Like you can set up on your email series, I wanna send this campaign this many days later, this campaign, this many days later, this campaign workflows super easy. Yeah, highly recommend it.
Sam (05:18): So let's dig into this a little bit more. Someone say clicks on a Facebook ads, they land on the website. Are you inviting them to join your email list straight away? Or are you pushing for a one-time sale? What does that customer lifecycle look like?
Douglas (05:34): Yeah, so we, we like through every, like, so a lot of people at the time we were reading and a lot of people say, you know, do a lead magnet, collect the email address or never send traffic to a product page. You know, maybe send them to like a, something small and then get them to upsell later. But we went straight to the subscription. So our, it was literally our Facebook ad, you click on it and you'll go straight to the product page offering the subscription. And literally we had so many, I think our cost of customer acquisition came out to 15 US dollars per customer, so we're requiring at 15 for a subscription product to cold traffic, which was insane. But I mean, along the way we did other things to really get that conversion up. So it, our, our ads were all like, my wife and I became the face of the brand. So when you saw our, our Facebook ad, you knew that you were buying from like a, a, a family type business versus say a big corporation and you actually saw the founders in it. So I think that made a, a massive difference.
Sam (06:49): It's so interesting that you say that because every founder I speak to talks about how they inevitably became, inevitably became the face of the brand, but was somewhat resistant in the beginning. And it really seems like more e-commerce founders should be taking the stage, so to speak, and being the face of the brand, even though they might not want to do that.
Douglas (07:14): Yeah, totally agree. Sam. I think Steve Jobes did the best, like I, I watched a lot of his presentations when he presented new Apple products, and every time he presented a product, it was always a story. So he'd always be telling a story, he'd, he'd always become the face of the brand. And I think that what you said is so true, Sam, like, you know, big corporates, I think I think people just wanna buy from people that they know, like, and trust people that, you know and they wanna support local, they wanna support family type businesses. So I think now's the perfect time to be doing something like that.
Sam (07:52): I couldn't agree more. And something you said in the pre-interview, which I found really interesting was you talked about building a community with your customers, and I wanted to ask you, can you share more about how you did that and how it helped grow the business?
Douglas (08:08): Yeah, definitely. So first two years of the business, we, Sarah and myself, Sarah's my wife we actually did all the customer service. So we got to know our customers. We didn't, a lot of people say you should outsource it straight away, but I think an element of that should be, you definitely should outsource it or get someone to handle your customer service, but I think you as a founder should do it for a certain length of time so that you can get close to your customer and get to know them. So yeah, we were answering these customer inquiries like using our own personality. Like we weren't, we just literally talked like I'm talking to you now. Yep, no worries, I'll get that sorted for you. We also had a Facebook group and we personally replied to a lot of emails and adding our own personality, as I was saying, and we got to know our customers really, really well.
(09:01): Like we were talking about this pre-interview, like a lot of our customers actually became our close friends. They would send us gifts in the mail. They, it got really to the point where it got really sad at sometimes at some points, because a lot of our customers are like the older generation, so between 40 to 60 and we'd have quite a few of our customers pass away. So their husbands would email us saying, Hey, so-and-so passed away, can you cancel her subscription? And it was just, it was kinda like sad as well. Like we were happy and sad to, to get so close to your customer that, you know, their husbands are, are, are just sending you this, these details. It's, it's like yeah. Wow.
Sam (09:45): There's so much to reflect on regarding what you just said. I feel like so many brands, they look at marketing strategies like building a community and they try and meet that demand with a one size fits all approach. And I thought it was really interesting what you mentioned about having this older client base and how you have to think, okay, how would people at this age want to be marketed to? Maybe they don't wanna receive a lot of emails, but maybe they do want a lot of comments in a community and so on.
Douglas (10:19): Yeah, yeah, no, absolutely Sam. So like we, we sent a lot of emails, but we, we put in a lot of content that through our drip campaign, a lot of content like that would add value. So we, we sent a lot of, like, during Thanksgiving, we'd give a lot of like recipes that you could put on for Thanksgiving. But yeah, you're, you're absolutely right. Like, I think at the end of the day, like if you can just talk to 'em like a friend and I find that a lot of brands miss this. So it's all like predominantly transactional mixed in with a bit of relational. But imagine if you could flip that and go completely relational and then put that transactional in there. Because what we found was by doing that, every time we sent an email saying, Hey, we've got a sale on, we would have super fans that would just buy to support us. Like, not just because they wanted it, but they actually wanted to support us. And I think when you do that yeah, you're adding, you're gonna build a very big community, which is what we, we were fortunate to do.
Sam (11:29): I want to switch gears a little bit and ask you about Sub Amplify. What is it and how does it help other businesses?
Douglas (11:38): Yeah, so sub Amplify, like we've got two products. It's, it's a subscription e-commerce platform, so you can set up an online store and be able to sell subscriptions from the get go. So we were actually a customer of ours, so, 'cause we ran our own subscription box, we discovered a few things along the way along our journey that we thought, Hey, it would be cool to have this, we could have this. And so we, we created our own platform and so we launched that so you can set up your subscription box, any sort of online store and, and sell a subscription. And then we also pivoted as well to create a subscriptions app for Shopify. 'cause Shopify is massive. So we, we wanted to be able to give value to Shopify stores as well. And in both cases we integrate with Drip awesome email system or email platform. And yeah, so our focus, our core focus of Safi is really subscriptions and we're evolving that to the next level. Currently.
Sam (12:39): How did you pivot to focus on Shopify and what benefits have you seen from that pivot?
Douglas (12:47): Yeah, well it's, it's been, it's been a great pivot because when we, when we were just purely a, a subscription e-commerce platform, we kind of had to find customers at that point who were looking to set up an online store. And then and that's, that's, that's a lot harder to do versus say finding a, a tribe of people that are already on Shopify, which like, there's millions. So we, we felt that if we weren't being in the Shopify ecosystem, then there was a lot of eco merchants that we couldn't help. Because we learnt so much from creating our own subscription box. We're like, Hey, we've got all this knowledge and we wanna put it in the software, which we did and we couldn't help as many people. 'cause Yeah, we we had, so that's what drove our decision to be on Shopify as well.
Sam (13:40): What are some of the challenges you found with being on Shopify? I imagine that are a lot of competitors and challenges you have to overcome there with standing out?
Douglas (13:53): Yeah, <laugh>, that's such a good point. It, it's not easy because there are a lot of competitors. I think I read the stats like five years ago the Shopify app system had like, I think two or 3000 apps now there's like close to 10,000 apps. So it's like tripled in the, in the last five years. So obviously more apps meaning more competition. So that's one, one thing we've, we've dealt with. The other thing as well is the Shopify app system ecosystem has really evolved in terms of like, it's a lot more stringent now to, to submit an app. So talking to other app owners you know, five years ago it was a lot easier to get approved, but when we went through the process it definitely, there was a lot of backwards and forwards. I think it took like a whole month to finally get approved and we were like, so radio, you know, my wife and I and our co-founder, we, you know, we had a glass of wine just to celebrate 'cause it was a very stringent process. So we're stoked to have gone past that. But yeah, there's some of the challenges and then obviously if you are in someone's playground or backyard, so to speak you know, that can be pulled out at any time. So you gotta make sure that you, you know, be compliant with everything that they're saying and, and follow everything. So, and that in itself is another challenge 'cause they make so many updates that, you know, you have to really keep up to date with.
Sam (15:26): Yeah, it's an interesting one. I remember back before Drip acquired Sleek Note, sleek note was also in the process of developing a Shopify app. And like you said, there's so much back and forth with getting it approved. One thing I would love to ask you about is how are you driving reviews for the app? Because I know Shopify are very strict with how you ask for those reviews and you can incentivize, but you have to be very careful how you word it. And I know that's a challenge for a lot of companies. It's a challenge for Drip as well. And I'm curious how you are overcoming that challenge.
Douglas (16:02): Yeah so what we've done is we've kind of taken the same approach that we did with our subscription box in terms of a lot of our customers that use our Shopify app. I'm actually connected to on Facebook and I talk directly with, so it's a lot easier to ask someone directly Hey buddy, can you, can you do us a favor and, and write a review for us? So we've kind of done that approach. And then obviously using Drip to email everyone to say, Hey after 45 days they get an automated email from our drip series to say can you help us out and, and send us a, or do us a review. So they're kind of like the two major approaches. We're kind of a bit more on the cautious approach, like you mentioned, Sam, like we, we try not to incentivize too much because I've seen especially like not just in Shopify, but in other companies like AppSumo where companies, you know, incentivize their users to give them a app Sumer review. And I've seen that gone completely haywire and gone backwards and ruin their brand. So I've kind of been a bit more cautious with that. So yeah, we don't really offer an incentive, but we just try and get close to our customer and ask them politely.
Sam (17:22): How do you balance your marketing for the two brands? Is everything running nicely and you are simply optimizing as and when is needed or are you thinking in terms of projects and things you need to ship? What does that process look like for you?
Douglas (17:39): Oh, two different complete mindsets, to be honest. <Laugh> so doing a physical product versus creating software, oh my gosh, like two different mindsets. So I'll start with the product, the physical product. So physical product, we deal with so many different things like during Covid U S P S who we use in the US to ship our boxes, like 10,000 of their staff got covid. So boxes were arriving late. Christmas is usually our very, very busy period. A lot of people buy boxes for their crochet surprise boxes for their, their family and friends. And so when it doesn't arrive by Christmas there's a, you know, they're really, really upset and we, we feel that. So doing a physical product, we've kind of gotta work on on those sort of logistics. And in terms of marketing, the biggest thing, the biggest driver I, I feel in, in terms of e-comm and physical products is email marketing.
(18:41): I, I, I don't think you can get any more bang for buck then email marketing, to be honest. So our whole focus is on that predominantly. So that's like writing campaigns during like certain periods of the, the year, like mother's Day black Friday, cyber Monday, Thanksgiving and putting campaigns around that. So we try and pre-plan that out. And then obviously we've got Facebook ads and then the organic type marketing, so doing posts and all that sort of stuff, which Sarah mainly handles. She's the domain expert, so she understands our target market in that. And then software, my gosh, bugs being the product owner as well, working out how things work from a technical viewpoint. Getting our message out there. Not so much on the email marketing with our software purely because the scale that we're we're working at at the moment is, is a lot different because you can send a lot of Facebook ads to a physical product, but it's very different to send, use Facebook ads and paid ads to a software product. Very, very different bit more of a different buying cycle. So yeah. In answer your question, Sam, I think we two different kind of sides of marketing but we try and plan out as much as we can, but we're not perfect. So we, some of it is quite we're doing it as we're going.
Sam (20:14): You have a small team and you're doing so much. How do you manage everything between the team?
Douglas (20:22): Yeah, well thankfully for our software, I've got a co-founder, Tom, a massive shout out to Tom. So I, I'm technical as well, but I've let him run with all the technical side so that I can just focus promptly on the marketing. So that, that helps a lot. I think it's very hard when you have to do the technical and the marketing and everything else. So being able to delineate those two tasks is, is a huge benefit. And then on the physical product side, I've got my wife, so she handles all the logistics and being able to work out the patterns that go in the box every month. And then I can work on the, on the marketing. And funny enough, a lot of our so our customer services handled by customers who have loved our product and we've just asked them to be our customer service reps, and then some of the, the stuff that's in our box is, is sorted by more of our customers. So yeah, we, we kind of just do more with less, right. Kind of just yeah. Use what we've got and, and leverage it.
Sam (21:27): It's so interesting talking about recruiting customers to do customer service. I've heard that before. I heard a story from Aaron Powell who founded Bunch Bikes. He was on the US version of Dragons Den and he was talking about how he went to one of his best customers and practically begged her to take on the customer service role, if I recall correctly. And I found it so interesting because it's so difficult for founders especially to delegate that responsibility, but I'm guessing the second best person to do that's probably your best customers.
Douglas (22:02): Yeah. Yeah. I I actually listened to that podcast interview. Oh, cool. Yeah, yeah, yeah. I really enjoyed listening to that one. And yeah, he's spot on. Like if you can make 'em raving fans like our, our customers, we, we treat 'em like gold. Like I, I go on these Facebook groups with other e-comm store owners and it's really interesting hearing some of the, the questions they post and stuff like, and, and we did this differently. And it goes back to what you were saying, Sam, like I remember reading the other day about a e-comm store owner who was saying, you know this customer of mine purchased a subscription, then she canceled it and she's asking for a refund. Even though the, like with a subscription box, you have cutoff dates and she went past the cutoff date, what shall I do?
(22:53): And send different questions like that for us. If, if they've canceled and we haven't sent the box out yet and provided there's enough notice, like it is not like the day before we ship your box, you've given us enough notice, we just cancel and refund. We don't stress about, oh, should we refund or not? Should we go back and forth over 20 million emails, which cost you time? It, it just doesn't, it just doesn't, it just never gave us a second thought about it. We just refunded said, thank you, we really appreciate you. And then by doing that, we've had so many customers who cancel and then come back, or they'll buy a gift during Christmas for their family or their friends. Yeah, I think at the end of the day it just all evens out, right? You, you refund some and it all comes back.
Sam (23:47): It's so interesting. I always remember listening to this Dan Kennedy audio and he was talking about how he always would refund regardless, because especially with the internet, the last thing you want is somebody writing a bad review. We live in a world now where someone will leave a one-star Amazon review because the box the product arrived in was dented and whatnot. So I love that you have that philosophy around refunding regardless, and it's certainly something a lot more e-commerce founders would benefit from.
Douglas (24:20): Yeah, yeah. And I, I love Dan Kennedy. He's I think I've read a lot of his books, so I think you know, he's the what the grandfather of copywriting <laugh>.
Sam (24:31): Yep, absolutely. <Inaudible>. It's hard to disagree with with Dan. So yeah, I think it's definitely a good learning. I wanna be mindful of our time. Doug and I have one more question that I wanna ask you before we start wrapping up. What are your future plans for crochet, surprise and sub Amplify, and how do you see the subscription box in e-commerce industries evolving in the coming years?
Douglas (24:54): Oh, it's actually a good question. So I'll start with sub Amplify. So we are pivoting to more a so we were subscription box and we, that was our primary focus. So we're more focusing now to more paid community type memberships, which is our, our focus and which is what we're kind of switching to. I think that's the next phase in. I feel that subscription boxes are hard work for so you put in a maximum amount of work for not as much of a reward. So subscription box, 'cause we've done it, you know, you've got a pre-order products like, you know, and not all suppliers. If you go to a supply and go, Hey, I need 10,000 items of this and I need it in like two, three months, you know, sometimes it's really, really hard. And generally speaking, subscription boxes as an industry the profit margins are lower, so other subscription boxes like Birchbox, Ipsy, all those sort of brands have kind of changed how subscription boxes are viewed.
(26:04): So I'll, I'll backtrack. So a lot of people now see subscription boxes as like, I pay $10 and I should get $50 worth of value, something like that. Sure. Or I, I pay 30 and I should get like a hundred dollars. And unless you're getting free samples in your box and free product from suppliers that you can't maintain that that profit margin. Secondly, Facebook ad prices and paid ads have gone up, so that profit margin is shrinking. So, you know, it, it, e-comm in general is already hard in terms of its profit margin. So I feel subscription boxes it's even harder. And so we, we still think there's a, a place for it, but we, we feel that these, the like paid community model is membership model is, is where it's at. So we're pivoting to that. And we will have that ready in our Shopify app first, and I'll be ready in like literally the next one to two weeks. So we're super excited by that. And that's where I think it will head so, and we're placing a bet on that. And that's kind of where our focus is at the moment.
Sam (27:18): That sounds like a great bet to place and a good place for us to bookmark this conversation for now. Doug, I've already enjoyed this conversation and I wanna ask you, where would you like our listeners to go to learn more about what you're doing?
Douglas (27:32): Yeah, so if you head over to www.subamplify.com you can check out our website or my personal email is firstname.lastname@example.org, where you can find me on LinkedIn just by typing Douglas Li. And yeah, send through a message and I will connect with you.
Sam (27:50): Perfect. Well, Doug, I wanna thank you again for taking the time to join us today and all the best in the future with crochet surprise and sub amplify and everything else that you're doing in between.
Douglas (28:00): Yeah. Thank you Sam. It's it was an absolute honor to be on, on, on this interview.