Joe Anhalt from Koio

Sam (00:01): Joe, welcome to Beyond the Inbox. Thank you so much for taking the time to join us.

Joe (00:06): Yeah, thanks for having me. Excited to chat.

Sam (00:10): Can you tell us about your background and how you got started in the footwear industry?

Joe (00:16): Sure. So my career started as just a, a content copywriter at an early stage tech startup while I was working and living in, in Chicago. And really yeah, sink my teeth into the entrepreneurship culture, the startup culture, and, and really enjoyed that. And my career quickly developed from just a copywriter to content strategist and email and social and paid and ss e o and some creative and branding. So really this kind of generalist master of none marketer, if you will, intern in the startup ecosystem after a few years morphed to the D two c, world and that have been in that for the past, I don't know, 6, 7, 8 years. And I started in the furniture vertical, but then shifted to footwear about five years ago. And in the d d C world, as you know, best, you know, the, the fundamentals track, right? You know, the, the acquisition strategies, no matter if it's furniture, footwear, beauty a lot of the same principles, a lot of the same best practices apply, right? So it, it was quite easy, easy to transition from a furniture D two C brand to a footwear D two C brand. And yeah, I've been doing that for the past five years. And yeah, D two C all day, every day.

Sam (01:34): When you meet people for the first time and they ask you what you do, how do you describe Koyo? What is the elevator pitch?

Joe (01:43): For, for what I do versus Koyo? Obviously two very different things for Koyo. It's I, I like to say it's a it's a luxury footwear brand. All the products made in Italy obviously sell primarily in the States. But we like to focus on a few things. So first and foremost, it's the quality and craftsmanship, right? So we were very adamant from the beginning about being manufactured in Italy, which has some of the best footwork factories in the world. That's where most of the heritage luxury brands manufacture. And then in terms of design, we love to be as versatile as possible. That often means clean, simple, right? So a pair of boots or sneakers that you can wear to the office, but then to happy hour and potentially to, a wedding, right? So very versatile.

Joe (02:32): And then the third one pillar I would say that we're really starting to sink our teeth into a bit more is what's our PO point of view on sustainability, right? So very exciting. Actually, today we're continuing to develop our regenerative line, which is essentially we're sourcing leather materials from regenerative farms in the Swiss Alps. And this is something that people will start hearing more about primarily in the agricultural space, but we're taking it and bringing those materials from those farms to our footwear. So this is our, what we believe is more unique and kind of early adapter to this regenerative story that we're trying to tell throughout products. And so that would be kind of the, the third and, and final point of the, the d n A of of Koyo. What I do more more so on the, on the marketing and e-commerce side of things, is, you know, a lot of the, the standard, you know, I guess like growth and performance side of the business, right?

Joe (03:32): So managing our customer acquisition costs across our channels meta social creator, things like that. Understanding our entire customer journey through email, s m ss onsite, you know, ab testing, understanding the user flows where people are falling off, managing that process, and managing the team that is responsible for all those functions. And, and more so as of late you know, we are a venture backed firm. So as most venture backed firms these days, we are all hyper aware of of our cash on hand of our burn rate how quickly we are approaching our profitability goals, things like that. So I've really put on more of a bean counter hat these days. So you know, my, my title says VP of marketing, but it's, it's, it's very widespread, and I feel like my entire career I've been this generalist marketer, e-comm you know, sometimes getting behind the camera and shooting things as well. So that brand side of things as well. But as you know, best, when, when you're a small company, a small team, you have to do all these things, right? You, you have to keep your head count low and demand a lot from your, your employees, no matter if it's a executive level or an associate. You know, we're, we're all hacking away at this, this challenging problem of, of building and growing a business together.

Sam (04:55): One question I wanna ask before I move on. You used this word mm-hmm. <Affirmative> regenerative quite a few times. Can you explain what that means?

Joe (05:02): Yeah. So regenerative agriculture and I'll try to keep it high level 'cause it can get in the weeds, no pun intended very quickly, but essentially we've been industrializing the, the farming ecosystem for, for hundreds of years now, right? You know, we were hunters and gatherers, we started farming, and then we got so good at farming because we've specified each, each product that we're going after, right? There, there's no longer you know, produce and, and animals together, right? They're separated, right? So that, that's a great example, right? So we'll have a cattle farm, and then we'll do corn and soybeans over here, and oftentimes it's on different parts of the world, right? And what regenerative is, it's kind of going back to the, the most organic way of farming, right? So you have your crops, you have your animals, and you have this biodiversity of things happening.

Joe (05:56): All right? So another specific example of this is within commercialized farming these days, what's super important is the health of your soil, right? And time and time again, every season we're, we're destroying the soil through pesticides, through other chemicals, through tilling the soil with these big machines that you see when you're driving through the countryside. And while that is fantastic for keeping prices low and for mass production, what it's doing is it's killing the soil. And it's, it's not allowing the, the ground, right, the soil to sequester carbon back into the soil, right? So you see all these dirt fields with no cover crops on them essentially greenery, right? And so we're, again, not allowing the the soil to regenerate itself, right? So regenerative agriculture is this process of yeah, allowing the soil to, to breathe, right?

Joe (06:55): And allowing the, the animals to, to graze organically and, and more naturally. And it is, you know, the, the big challenge is, is the scalability of it right now. And convincing farmers and yeah, I guess just like countries to, to get on board with this because it is quite a shift. You know, it's, it's, it's like the next step, two steps, I would say, above organic farming. You know, it, it's, it's a great step to rid the farming techniques with pesticides and, and other chemicals. But the next step would be this regenerative agriculture experience. So yeah, that's, that's a mouthful. There's a, there's a couple of great documentaries on Netflix that I would recommend. I, I'd say the most accessible and attainable and digestible is called Kiss the Ground. It's really solid. It's like 90 a hundred minutes, and, and it's an easy watch.

Sam (07:48): How do you strike a balance between this very high level sustainable approach with being venture backed and having to <laugh> deliver high profitability? What does that look like?

Joe (08:02): It's really challenging. That's, that's the short and correct answer. And really with every initiative we do, whether it's a new hire or a new marketing channel or a photo shoot, we, we have to on all understand, you know, how that affects the p and l, right? Baking that into our marketing efficiency ratio number, our, our M E R, right? Before it was just how much are we spending on, on Facebook, right? But really now it's okay, we're spending on Facebook, but also you know, what are our e-commerce subscription numbers looking like each month, right? So the, the apps that we're paying for, right? Whether it's like a one click upsell or are our size finder, you know, how much is that going into our, our monthly budget, we did a photo shoot, okay, we should probably put that into our marketing efficiency number.

Joe (08:52): So we, we've shifted from just looking at our marketing spend on Facebook or Google or creators, and really opening the aperture and making sure we're calculating each dollar spent and making sure that that dollar spent is providing a return on investment, right? So really, we've, we've just all become very focused on every dollar, right? And, and making sure each one of those dollars is having a return that's well worth the investment. And it, it's been a really it's been a really good exercise for each of us. And it, it just makes you think, you know, two, three times if this new initiative, again, will actually produce a return. And that's really what it comes down to, right?

Sam (09:37): How does Koyo differentiate itself from other luxury shoe brands? I imagine it's such a competitive landscape and

Joe (09:46): Extremely,

Sam (09:46): I understand and appreciate everything you're telling me around sustainability. Mm-Hmm. <affirmative>, at the same time, I feel like it's something that a lot of brands can say they do. Yes. Unless they have proof. How do you, how do you strike that balance?

Joe (10:02): It's, again, it's really challenging. The footwear market is ex extremely competitive. So we do feel like with the sustainability point of view specifically, we do feel like we are a trailblazer within the regenerative space, right? We, we've even had people from like Ralph Lauren reach out to us because they're trying to get involved in, in this conversation with, with their products and, and their business. So we do feel like we have carved out some white space with this regenerative approach. You know, it's still a very small percentage of our business, right? We're not by any means a hundred percent of our product is regenerative, but we do feel like that's a differentiator, and we can work towards that. And it can become a bigger story of, of the brand now, the core product offering, you know, the white leather sneaker that everyone else has.

Joe (10:48): The reality is we aren't that differentiated, right? So what that means is we have to beat everyone at their game, right? At the game we're all playing, right? So handcrafted in Italy amazing craftsmanship, versatile designs. How can we tell that story better than somebody else? How can we out execute them, right? How can we out optimize them? And yes, that's really challenging, but it's not impossible, right? And diving into user data, really understanding why people are shopping coy versus somebody else asking those questions and reinforcing those answers across all of our marketing initiatives and in our retail stores as well. So that's the, that's the right answer. You know, for years and years, I was trying to think of a clever catchphrase of why we're differentiated, but the reality is, if we're being intellectually honest with ourselves at coo, we aren't that differentiated, right? With that said, we believe that we have the team and the product that is much more valuable than a lot of our competitors out there, and we need to beat that messaging and beat those touch points over the head of all of our customers and people who are cross shopping in the market. And again, it's, it's not an easy task, but we believe that's what we have to do.

Sam (12:05): I imagine being consistent in communicating those brand values over time is in and of itself a differentiator, and you are attracting a certain type of buyer that also has those values.

Joe (12:20): Exactly. Exactly. And we, we think we're being repetitive, right? 'cause We're seeing this all day every day. But the reality is we're not that repetitive. 'cause We're talking to new customers most of the time, right? We're still small, but mighty brand. So our messaging is fresh to all the new customers. So again, you, you kinda have to pin that in your mind as well. You know, you think you're being repetitive, but the reality is you're not. And even if you are, that's okay, right? Because we're still a new brand, people don't, it, it takes a while to understand what the true identity is, right? Even with like other brands or even people, you know, it takes some time to get to know people and understand like what makes them tick, right? And we, we need to be as targeted as possible because we can't have 10 or 15 different messages of who we are. It needs to be two, three things max. Right? And we just need to continue pouting those home over and over again. So when I meet somebody who is a COO customer, they, they can spit back those two or three things, right? And I think we have a couple of those down. The, the minimalism, the versatility, the, the quality, the sustainability one is something we're continuing to push because it's still fresh and new. But I think that will come in the next, the next couple years for sure.

Sam (13:34): What strategies have you found to be most effective for acquiring new customers, and how have those strategies evolved over time?

Joe (13:44): Yeah, so very specifically, obviously a lot of our cash right now in terms of marketing dollars still goes to meta. That's where we've seen the, the biggest bang for our biggest bang for our buck. We, you know, we've experimented with other channels you know, whether it be a newsletter through like a Morning Brew or something like that, or partnering with like a Con nast to run social ads through them, or direct mail. You know, we, we've experimented quite a bit, but at the end of the day our biggest return on investment is still meta and Facebook and what we found there, what works is, again, speaking to these brand values, but the, the big unlock for us has been how do we like visually communicate those, those value points, right? So, at the beginning of our kind of meta marketing experimentation, whatever you wanna call it, it was very lofty, high level, not too specific, right?

Joe (14:37): And we just started weaning down that messaging. And visually speaking, it's how can we showcase the craftsmanship? You know, how can we get macro shots? How can, how can we get factory shots? How can we show that we, we put the, the level of craftsmanship and quality you know, as, as obvious as it can be, right? So it, it really comes down to like those, those macro shots both still and video. So that was a big unlock for us. And it's like, how can we produce and develop more content like that, that, again, visually speaking says what we wanna say, right? How can we show craftsmanship and quality without any copy attached to it, without any, here's your first order discount. And it's obvious in hindsight, but it, it took some time to get there because we were so, you know, we wanted to create like a Super Bowl ad, you know, we wanted to attach to the emotion, but the reality is you don't do a lot of brand building within paid social, right? You do brand building on your website through email marketing in your stores through pr, news stories, things of that nature. So it, it was the shift from let's be less brand focused and more direct response and let's get into the nitty gritty details as quickly as possible so people can latch onto that and want to learn to discover more.

Sam (15:56): That's so fascinating because when I think of most apparel and footwear brands, especially when it comes to their copy and creative, I always think of models modeling the products <laugh>, and the same in the emails as well. But I never thought about actually showing the manufacturing of the product, because that, again, in and of itself is communicating values such as quality and craftsmanship. And I can imagine that's very appealing to your target buyer.

Joe (16:27): Exactly. And again, it took us an embarrassingly long amount of time to figure that out. But also, one thing we've learned is, you know, we're a, we're a unisex brand, right? So we have men's products, we have women's products, and we started out essentially the same products for each because we had a minimal skew count. It was just this, our, our hero product, which is the minimal white leather sneaker, the Capri in triple white. And we've started to branch out from that. So there's a proper women's collection and a proper men's collection, and those two shoppers are different, right? Again, just being honest with theirselves and looking at the data. Men, which is our, the largest part of our business, they, they love the nitty gritty details. Again, like zooming in on the shoe, understanding the stitching. Is it Blake stitching? What's the sole, what's the weight?

Joe (17:09): What's the what's the material? Right? And again, like visually showing that as clearly as possible on the women's side of things, it is, how can I work this into my wardrobe, right? How can I see this on a few different pairs of pants or a dress or what have you, right? And so it is two different approaches. And so that's been a new challenge that we're always trying to sift through, is how can we yeah, segment those two audiences. 'cause They are very different, right? The, the approach for women is not the same approach for men. We obviously spend a lot more time and resources on our men's side of the business because it makes up a larger share. But yeah, our, our men customers respond to the nitty gritty details, right? And so when we're shooting men's product, that's what it is. When we're shooting a women's product, it's, let's zoom out and look at the styling of it, the, the background, the story. And yeah, it took us, took us some time to learn that, but that's, that's baked into the playbook now.

Sam (18:04): That's a fascinating insight. And that leads into my next question. Where are you sending visitors? Are you sending them to a product page, or are you sending them to another part of the website where you are capturing email? What does that life cycle yeah, look like?

Joe (18:21): Yeah. good question. So this is another area that we've experimented with quite a bit over the years. And we send the, we send most of the traffic, I would say to the homepage. So what we tried to do in the past is push product specific ads on, on Facebook. And what we found out is those ads, even if they were performing well, those products actually weren't selling on the website. So maybe it was like a picture of a red shoe that was eye catching and thumb stopping, but they'd come to the website and still buy our copy and triple white, right? So, and I think that's the nature of our high price point, right? It's, it's a considered purchase, right? So maybe we'll, we'll catch your eye with that red sneaker, but after a few weeks of shopping around, clicking through the Koyo website, not coming from that Facebook ad, something else will, will catch your eye.

Joe (19:09): So we, we like to land people a bit further up on the funnel because we found if we land them on the P D P, it just doesn't drive as many conversions. So we're getting creative with homepage experiences and then also landing pages as well for larger collections, right? So if it's just the men's collections or women's collection or if we do have, let's say, like low tops, right? So we feel like that's broad enough where we can show a low top on the ad and come to the low top page and do a bit more storytelling, a bit more selling as well, have a, a mixture of, you know, assets that show lifestyle, but also product details. Then also have maybe a carousel where you can click into a P D P. We've had a lot of success as of recent with building out those landing pages specific to the audiences we're targeting. If you're not doing that, I'd highly recommend it. You can get landing page templates or apps through Shopify, or if you have your own development team, ask them to build some templates where you can kind of drag and drop different elements. But we've had a lot of success with with the landing pages specifically.

Sam (20:14): And what about onsite marketing? Are you capturing email? What does that look like?

Joe (20:20): Yep. So we, we actually do a pretty good job of email capture and, and ss m s as well. Something that we, we focused on a few years ago, and it's just been built into our marketing playbook. And we, there's definitely room to improve on segmentation and also treating our v i p customers like VIPs. So if you do join our email or s m s, everyone gets early access to product drops which our customers really like, and I feel like we could take that a step further and narrow that audience down. So not just the entire email list, but, you know, let's, let's carve out our top 20% of our customers, which is a, you know, ton of our revenue as most businesses are, and how can we upsell them a bit more, right? And so we, we definitely can definitely room to grow there. But yeah, email and SS m SS is a, a crucial part of, of our business.

Sam (21:12): If someone, if someone makes a purchase, what does their next purchase look like? Do you typically have someone buying a pair of sneakers and then a pair of dress shoes, or do you have people buying the whole collection? What does that buyer behavior look like?

Joe (21:27): So we don't have a ton of data on this because our collection until recently has been quite small. So the, the quick answer is, if they buy our bestselling products, like the copy in X color, their second purchase more times than not, will be the same product, but in a different color or the exact same product. Again, back to our business being primarily men, when we find something that we like, we'll stick with it, right? So if it's like a t-shirt or a hoodie or a pair of shoes, even if they're 350 bucks you're gonna buy the same pair again or a different color way. So fall, winter of last year, that's when we started introducing more boot styles. And so I'm really curious to now go back and understand, okay, if, if your first purchase was a boots, is the next purchase of boot, or is it, is it a sneaker?

Joe (22:14): Right? my hypothesis is you don't need as many boots in your closet. Again, I'm speaking just to our men's audience here as you do sneakers, right? So I'm curious to see if if our boot customer, their second purchase is more likely a, a sneaker as opposed to a sneaker customer. I know their, their second purchase is also going to be a sneaker. But that really comes down to the product portfolio and expanding that, which our product team has done a really solid job the past couple years. So as that starts to expand the marketing team, we need to understand the data in real time, so then we can push out the proper products after they make that first that first purchase. And also understand, you know, what, what that timeline is, right? We've seen it's, it's usually around 45 to 90 days, so we gotta strike right in that time period for that second purchase.

Sam (23:01): I can imagine over time, as you are collecting more data, you can start to think about seasonality as well when yep. Spring begins, for instance, you can start to introduce new products, and I can imagine totally over time, you will have such a well-informed profile of how your buyers are shopping for different products.

Joe (23:20): Totally. And every year we're getting better and learning more, right? So spring and summer is our sweet season. You know, everyone is shopping for their, their new wardrobe before they start traveling in June, July, August. So, so right now it's, it's peak koyo time and peak time for our bestselling products. Again, those, those low low profile, minimal clean white sneakers, people, people love those. That's been our hero product for, for some time. And another thing that we, we've gotten better at is understanding that that's the core part of the business. It's always fun to think about the new shiny product, but at the end of the day, your best sellers are what's, what's gonna keep your business you know, keep the lights on, if you will. So there's still room to grow with telling the story of our core product offering, you know, that that minimal light sneaker, that's, you know, touch wood, that's not gonna go outta style for, for some time now, right? So doubling down on that and continuing to elaborate on that story, getting creative with other ways of positioning that product, getting it into PR stories, that's still very important. And a lot of what we do in, in the springtime, because we know that's when those sales spike. So it's it's white sneaker season right now.

Sam (24:27): One thing that really stood out for me when I was researching for this episode was you have so much referral marketing working to your advantage. When I go on YouTube and I research the brand, I see so many YouTubers doing these reviews, and these aren't small YouTubers, these are YouTubers with massive audiences. My question is, are you incentivizing this referral engine, or have you got enough brand equity at this point that the big sneaker YouTubers are simply making these videos out of Yeah, Goodwill.

Joe (25:00): I, I wish that was the case. It's, it's not, again, being, being super honest here some of those are, you know, paid paid videos, some are organic and YouTube's been interesting. It's, it's a, it's a really solid channel for our core demographic to do their research and their due diligence, right? Again, the sneaker market is ex extremely competitive and very saturated. You, you can get a white sneaker on Amazon at the big you know, essences of the world, Mr. Porter every D two C company has their own kind of take on a white sneaker. And a lot of the research done is on YouTube, right? Because people wanna see product reviews, especially men men love going on YouTube for whatever reason, right? I, I know I'm like on it all day every day, just like looking at different random videos.

Joe (25:46): And so we need to be there, right? And we've seen that from the data as well. We have just a simple post-purchase survey simply where did you first hear about koyo? And a large, large percentage comes from YouTube. Still unclear if that's actually where they discover us or where they're doing their research and due diligence. But regardless, we know people are searching for Koyo on YouTube as well as as Google. So as much real estate as we can get, we, we wanna go after it. We'll do our organic videos, we'll, we'll pay people to do you know, an integrated video. We've tried all different sizes of, of channels. And it's, it's something that's again, kind of always on within our, our marketing playbook is, is our YouTube strategy.

Sam (26:31): I wanna be mindful of the time passing. I wanted to ask you about something that came up in our pre-interview. You talked about this new sub-brand, and I wanted to ask you about that. Yep. What inspired that decision and what can we expect from it in the future?

Joe (26:47): Yeah, so this is really exciting. This is something we're launching next month. And, you know, coyo, we, we do operate in the luxury price point, right? So average order value three 50 and as we're starting to develop new products boots women's boots, the price point is only getting higher. So we know there's an entire market out there that it's, it's just more challenging for them to attain our products. We're also seeing in the footwear market primarily led by Allbirds. There's this big push for a hundred percent sustainable, organic just options out there which is really challenging for the Koyo D N A, right? We're, we're doing our part with regenerative, but that's, again, just really challenging to scale with the supply chain of regenerative leathers right now. So what we're doing is developing a lower price point product a new brand that is vegan materials still will look and feel like a leather shoe, but will be a bit more attainable price point.

Joe (27:46): And we'll be just a bit more fun and, and lighthearted branding to compete in the world of Veja k Yuma Allbirds, right? You know, the, the coil purchase, we know from our customers, it's, it's a considered purchase. It's, it's a nice dress, kind of dress sneaker, right? So it's not something that you can kind of just throw out and go to the grocery store and kind of beat up, right? And so we want to play in that market, right? We want to kind of widen the aperture of, of our customers and our demographic. And, and that's what this new brand that's, that's what we're trying to do with this. So launching it yeah, in, in a few weeks now. We're all very excited. It'll be launched under the Koyo umbrella, so it'll live on our site. And we'll see, see where it goes from there. One thing I love about it is it, it just feels like very entrepreneurial. It's like a, a startup within a startup, and no one really knows how our customers are gonna react. But we're, we're really excited for the, in this initiative. It's been a fun, excuse me, project within the COO team and yeah, we'll, we'll see how it goes.

Sam (28:50): Well, I imagine it will be live by the time this goes out. I wanna wish you all the best of luck with that. Joe, I've really enjoyed this conversation and I want to turn it over to you. Where can our listeners go to learn more about Koyo and everything the brand is doing?

Joe (29:05): Yeah, so koio, koio.com, everything and everything will be there. And if you just Google COO or on Instagram as well Instagram is where we communicate a lot of new product launches and things like that. But yeah, koio.com.

Sam (29:19): Perfect. Well, Joe, I wanna thank you again for taking the time to join us today. I've learned a lot. I have some great Netflix documentary recommendations now, which I'm looking forward to. Yes. So I wanna thank you all the best, and I look forward to seeing how the brand continues to perform in the future.

Joe (29:37): Yeah. Thanks so much for having me, Sam. Really appreciate it.