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Moderator: Okay, we’re going to move on to our next presentation. And we have coming to the stage Marc Mullin from Sleep Number and Bill Schneider from SheerID. And they’re going to present some work that they did recently with targeted community offers for Sleep Number, unlocking revenue growth. You guys have a presentation? There you go.
Bill Schneider: Thank you. Thank you. Thank you very much. Hi everyone. Nice to see you. Thanks for spending some time with us today. The next 20 minutes, we’re going to talk about community offers and the power of community offers. My name is Bill Schneider. I head up product marketing at SheerID. If you aren’t familiar with SheerID, we are an identity verification company for commerce brands. We work with hundreds of commerce brands to protect personalized offers to, uh, specific consumers within a community.
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Bill Schneider: And when I talk about a community, I’m talking about groups like, uh, students, teachers, members of the military, healthcare workers. What makes them similar is that they all share a common aspect of their identity. And what makes them different from a segment is that typically, they’re highly networked. Right? So we were talking about efficiency just a minute ago, um, and because you’re working with an offer for those specific communities and they’re highly networked, there’s a strong word-of-mouth effect, which helps, um, with marketing efficiency for customer acquisition and also loyalty. So, um, I am going to pass this off to Marc here, and he’s going to talk about how Sleep Number has used community-based offers to help them drive their growth. Um, it’s really been an important factor in their growth engine, and he’s going to talk about, um, how that has matured at Sleep Number over the last couple of years. Um, and then we will go back to Q&A and we’ll dig into some of the details. So, with that, Marc?
Marc Mullin: Thank you. Good afternoon, everybody. And thanks for coming. I know you guys had some choices, so we do really appreciate you choosing us today. I’m Marc Mullin, Sleep Number setting 35, my average SleepIQ score is an 82.
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Marc Mullin: How many people know what I’m talking about? How many people have a Sleep Number bed? Wow. Raise those hands again. How—that’s pretty impressive. I did not think we’d have that many. Er, there—we could get more, though. So I’m looking for more. If you want to come find me after, I’ll find you a coupon. We—we need more Sleep Number bed owners out there. All right, thank you, guys. Sleep Number—we are a—just a little bit overview on what we—what we do and what we are. We’re in the premium mattress space. We’re about a two-billion-dollar company, publicly traded. We’ve been in business for about 40 years. 650 stores roughly and over 4,000 employees. And, compared to Revlon, this is super easy because we only have one website, not 73. So, uh, that’s a little bit about Sleep Number.
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Marc Mullin: Um, what I do is I run all our promotions, so all pricing, uh, strategy as well as all financing offers that run through our company. So you go to our website today, you see the discounts—that comes from my team. There’s a very specific piece of what we do, which is community offers. Okay? When you think about the landscape of—of what we’re selling to, new customers, to what we call Smart Sleepers or insiders, referral, NFL partnership that we have, and various other partners, we also sell to communities. So, um, I’m going to talk a little bit about community marketing and why it’s important, how we leverage our omni-channel experience, and, um, how we unlock additional revenue, which is really at the end of the day what it’s all about.
All right. When we talk about, um, communities, SheerID is our partner here and they have many different communities that we can actually target. And the great thing is, is that we can verify any of these groups. Sleep Number today, we actually run offers for everything you see on the left-hand side. So, military, first responder, healthcare professionals, and teachers.
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Marc Mullin: And about 5% of our total sales annually come from these groups. So it’s very important for us. This is a very important strategy. Um, I’m going to keep moving, but there are—when you think about, uh, communities and—and why we’re doing—I talked about the sales lift, but really it’s about driving more customers into our store. Ultimately for us, like I said, we have 650 stores. Over 90%—well, 85 to 90% of our sales are actually in-store. The rest is web and—and, uh, in—and calls—and calling. So, um, when—what we’re doing with these offers primarily is to drive traffic into our stores.
And the important thing about the communities is that, you know, my—I’ll tell you guys personally, my wife’s a teacher. And if she sees an offer on the—on through SheerID or—or those competitors or actually a lot of times we get picked up organically, uh, we get offers picked up on, last year we had USA Today pick up some of our offers. So obviously that brings organic traffic into our store.
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Marc Mullin: And for those communities, like my wife who’s a teacher, she’s going to see those offers and actually, she’s more willing to buy and has a higher intent to buy for companies that are featuring those offers and—and utilizing these communities. You—so you think about that and then you got—so between, uh, driving additional traffic, but also adding credibility. Uh, the credibility within this group, your—your company, your brand gets a lot of credibility, especially I would say, especially in the military community where those customers are looking for these offers. And ultimately you get word of mouth. The cheapest form of marketing is referral. So what we love about these programs when we run them is that we get word of mouth. Obviously, within these communities, they’re talking to others within those communities and they’re—and they’re driving foot traffic into our stores, which ultimately leads to incremental sales and leads for us.
I’m going to talk a little bit about the journey. I’d mentioned we’re a 40-year-old company. We’ve been running community offers for quite some time, you can see about 15 years.
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Marc Mullin: What we had been doing prior to partnering with SheerID is a really pen-and-paper process in our stores. So, customer—we would run a military offer, generally about extra $100 off was our typical offer. And customers would come in and often times our sales people would sell on those offers and they would—the—what they had to do was actually just scan the ID and put it in a binder off to the side. Okay? And these were supposed to be audited. But obviously, after over 650 stores at the corporate level, we weren’t really auditing these binders. So we were seeing 40% take rate back then when we were running this in-house solution. 40% take rate on these offers and obviously, we were giving away a lot of margin in doing that.
Fast forward to the pandemic where we partnered with SheerID. Now, what we’re seeing is, uh, obviously more—we’ve—we’ve decreased the amount of customers that are taking the offer, but we’re actually expanding margin.
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Marc Mullin: Because we’re not giving it away to everybody. And what we’ve also found is that we can actually add—we can actually give a stronger offer to those customers because we know that they are who they say they are. So what we’ve generally found is about 20% off is the right level for to make—to everything I said in the last page, make them feel special, make—help them, you know, give them a reason to convert, give them a reason to come into the stores, roughly about 20%. So we’ve been able to go from $100 off to 20%, which has been great because we’re driving additional traffic with a meaningful offer, a relevant offer, and we’re converting at a higher rate.
Today we’re expanding this program. So we started with just military. Pandemic, we went to Heroes, so we added the healthcare community, first responders. Today we’re expanding this to not only be what historically had run a Vet’s Day only offer or Memorial Day only offer for military, today we’re running more of these offers more frequently with more expanded groups.
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Marc Mullin: And in the future, it’s about building a year-round growth channel. So, offering these offers every day and being relevant with this consumer every day for all the reasons we mentioned, for referral and for driving new foot traffic into our stores.
All right. So, a little bit about the execution on this. Um, first off, when you have this many stores, it’s really important to have consistent experience. And you want that to flow all the way to your website, obviously. And—and really what—most of our traffic, obviously your customer journey starts on the website. So, getting them there and moving them to the stores is our main objective. With this offer, with these types of offers, obviously I mentioned earlier, we’re picking—we’re picking up, we’re being picked up on various different channels. Customers are finding us through SheerID’s website.
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Marc Mullin: And so as they come into the funnel and they come to the store, you want to make sure this is easy for them. One thing that we struggled with upfront was because our store checkout time today is 30, 35 minutes on average, we didn’t want to add an extra 10 minutes for this verification process. So it was really important for us to streamline this process, and SheerID helped us with that. And now it’s essentially instant verification in our store, and customers are obviously able to use that coupon immediately and transact.
On the website, from an omni-channel perspective, we do feature the offers. It—it generally at the—in the footer of our website. And so if you were to search on Google, you can find these offers. And it’s a very simple, easy-to-use form that then, like I said, is instantly verified and then that customer can take that coupon, either go into the store or—or purchase on the web.
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Marc Mullin: Um, ultimately, this is my last slide and then we’ll—we’ll jump to Q&A, but like I said, a significant portion of our sales drive—comes through these offers each year. Um, but um, the gating of it is—is important because it’s allowed us, like I said, to increase discounts and then more effectively attract and convert those new customers to our brand, ultimately enhancing margin. So, um, like I said before, giving away money to customers that didn’t—didn’t actually qualify to now, um, we’ve—we’ve gated it to ensure that we are selling to only those customers, uh, that have the certain profession and, um, ultimately we drive—drive expanded margin growth through that strategy. So that’s it for me. I think we’ll go to Q&A.
Bill Schneider: Cool. All right, great. Let’s—let’s go into Q&A. Thanks, Marc. And you know, hats off to you guys on expanding your program, um, to multiple communities.
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Bill Schneider: Obviously, the pandemic was a big opportunity to do so because essential workers was a community that a lot of brands were responding to and wanting to do something special for at that time. You know, as you guys moved, uh, from an in-house solution to a verification provider, you know, you mentioned margin erosion was an important aspect to you. What were some other considerations? What were you looking for in a verification provider as you made that switch, and who did you have to get involved, uh, to make that decision?
Marc Mullin: Yeah, um, good—yeah. So, a few things on that. And actually, the Revlon piece was interesting because it’s all about budget, right? And so, um, various—this is a very cross-functional effort. I will say the—the marketing team is super important in this. Um, if—if I run—I’m in the promotion space, so I’m—I’m generally in—in the pricing side, but I do have to partner with the marketing side to get buy-in.
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Marc Mullin: Because if we’re not actually featuring these offers anywhere, uh, it’s not going to drive any incremental organic traffic into our stores. And ultimately what happens then is—is that customers are finding out about the offer when they walk in because the sales reps are asking them what their profession is in the discovery stage. So it was important for us to get buy-in more than ever to utilize marketing to a stronger degree because we have to get incremental people walking through the door. So, um, that was probably the—the biggest hurdle or piece to that, um, as far as getting—getting buy-in.
Bill Schneider: Getting buy-in from the marketing team. Did you also have, um, what types of conversations did you have—I’m wondering with like the finance team, um, obviously because you’re doing a—a discount or promotion that is above and beyond typically than your standard discount?
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Bill Schneider: Was that—I mean, was that an important factor in this as well?
Marc Mullin: Yeah, yeah. So the way we teed this up from a business case perspective is that, um, like I said before, 40% of our sales were coming through these coupon offers. We knew that half of that was—not—was fake, right? Half of those—half of those sales were actually unverified sales that were not who—people were not who they said they were. So we actually had to convince the finance team—good point—and the marketing team that we were actually going to drive more overall sales. We may actually drive fewer sales on a coupon, which we actually did. We actually drove—when we flipped to this solution, we actually drove fewer overall units through this coupon, through the verified community, but we actually drove more overall sales. So we had to be really thoughtful in the planning process, as we go through our forecasting process to—to actually sort of estimate and then prove out what we thought would happen.
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Marc Mullin: And it’s actually—it’s actually fairly easy because we knew how many households in the US were—were actually had a military person, actually had a healthcare person in that—in that household. So we actually had a better idea of what percentage should be coming through our stores and should be transacting through these coupons. And that actually came to be true. And that was with help of SheerID in trying to build this business case and ultimately to drive more sales, which we have done.
Bill Schneider: Got it. So you—you had mentioned that, you know, your wife’s an educator and it’s one of—one of the ways in which she learns about new brands is through, um, educator discounts. And we—um—we actually recently did a—a survey of consumers, 3,200 consumers, uh, we issued an announcement yesterday that polled consumers within these communities, um, what impact these offers have on their purchasing decisions.
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Bill Schneider: And 80% had indicated that it is typically the first way that they do a search when they’re looking at a new product category. So it’s a great way to drive intent, is the word you use, drive trial, right? Um, why—so there’s one part of that that kind of—the economic benefit, right? Like, hey, you know, if I can get a—a benefit for my community, I’m going to take advantage of that. Um, but we also see really strong engagement and loyalty, um, to these offers as well. And you know, what—I mean, maybe I don’t know if your wife kind of shared like what her perspective on it was, but I’m interested in if you have some—a point of view on that as well?
Marc Mullin: I so—we—I do a lot of focused time with our store teams and our call center team. And I will say there’s—there’s definitely more of an—for the military segment, there’s a lot more awareness and actually it’s almost—it’s not table stakes, but for—for some, it actually is.
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Marc Mullin: And so I hear more—about 5% of our calls, there’s a mention of military discounts. So we’re actually—like that is probably more prevalent. I think the other communities, I think the pandemic made—like unlocked some of these types of offers with Hero-type of offers and sort of brought awareness to the fact that you actually can get discounts if you’re part of a certain community. I would say my wife didn’t, you know, sample size of one, didn’t know that, um, and I think now it—because there are so many offers out there for her and in her profession. And the same can be said for healthcare, first responders, and all the other communities, students—there’s a number of communities that don’t make sense for our brand, but actually do make sense for many others. And I think the awareness of—of these offers is growing. So that’s what—that’s what I see.
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Marc Mullin: And that’s actually what I hear from our store teams. When we’re off of a military offer, I get consistent feedback and requests to come back onto a military offer because military personnel are coming in asking, “What is your military discount?” And so when you don’t have that, it—it sort of—you—it’s table stakes. And, um, so that’s where—when we talk about like what’s next, it’s bringing more offers every day to maybe not as deep of a discount, but bringing something so that they feel that they’re appreciated and that they feel sort of more loyal to the brand, which is really what we’re looking for ultimately, like I said, word of mouth and referral is—that’s—now we know you’ve got it if you can—we’re really a big—because we’re in the premium space, we’re really a big—big referral business. And so this is—fits right into where we’re at because these groups of communities do refer at heavier rates.
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Bill Schneider: Yeah, you had mentioned, um, people feel appreciated, you know. We’ve seen in—that was another aspect of the survey we recently did, and, um, the attributes, the—the feelings, the emotional connection that people had responded with was they feel valued, they feel appreciated, in some cases they feel honored. Um, and it—makes sense and is highly impactful because ultimately if you’re a member of the military, if you’re a teacher, you know, you’re spending a—a big amount of investment, a personal investment in that vocation. And when you get recognized by the brand on the other end, that—um—that creates that emotional meaningful connection that helps drive loyalty, right?
And I know loyalty is a big component for you as well. Um, I mean, you mentioned, um, there’s, you know, the initial acquisition component to help drive growth, but like from a loyalty perspective, what have you seen with these types of offers and these types of communities?
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Bill Schneider: And how do you think about—I know because you’ve got a loyalty program and you’ve got other groups, your employee base as well, you’ve got special offers for them as well. How—how does this fit into, um, those different—uh—those segments, those different groups of customers that you use to—to drive repeat business?
Marc Mullin: Yeah, couple things. Over half of what we sell is loyalty. It’s—it’s—it’s repeat and referral. Um, so it is a big piece of that. We—we do have a system—uh—any—most retailers especially, um, to—those that have sales people, there’s a—we have lead software essentially tracking everything about the person that walks in the door. You know, we’re making notes and—and we’re—and we’re keeping these in a database. And this falls sort of perfectly for us, uh, from a retarget perspective.
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Marc Mullin: When we verify somebody, they get coded automatically through our system as whatever their profession is so that if we want to go back and retarget, uh, we can easily do that. We can pull call lists for our store teams and they can go retarget these customers. So, um, and if they don’t purchase—and if they verify and they don’t purchase—then again, they’re still in that pipeline. And if they do purchase, now they’re loyalty and now we can retarget them and—and ask for referrals through—uh—through their networks. That way. So, um, the—the unlock there for us has been great because the more you can understand about your customer, the more personalization you can make, and, you know, with a—with a text, whether it’s a text, a phone call, or an email that we’re sending them, uh, now we can personalize that communication to make it special for them.
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Marc Mullin: And so, um, we had not done that before because we had no way of keeping record and we didn’t actually trust that they were who they said they were. So, uh, there’s been a lot of win from—from that and I think it’s partially why we’ve unlocked additional revenue off of this program.
Bill Schneider: Yeah, I mean that’s a great point. So these offers provide an opportunity to collect first-party data. Uh, from new individuals because essentially you’re giving them a benefit, they’re going to raise their hand and say, “I want you to look this up about me so that I can get the reward on the other end.” And then you’re using it then for retargeting, personalized marketing downstream.
Um, okay, we got time for, um, one more question real quick. So, you know, you had mentioned omni-channel as a big component to this as well, right?
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Bill Schneider: And obviously, a lot of these sessions are getting—they’re getting started in the online channel. What did you have to do to get, um, to make that a seamless process in the in-store experience when consumers, when your customers came in, uh, with their verified status?
Marc Mullin: Um, yeah, we—obviously if—like I said, your customers are coming in, they’re hearing about the offers sometimes from the sales people, so we had to make it easy on mobile. Because they’re—you—and so we have iPads in the store too. So we had to make it easily accessible on our iPad, we built an app on the iPad. We also—it’s on our website so the customer could do it on their mobile phone. Um, and we made an instant verification process that actually was unique to what SheerID could do before they brought us on because like I said, uh, we had to streamline the checkout process. Uh, somebody with that high—build—high of a ticket—like I said, we’re well over $5,000 for an average mattress—so it’s—um—so you want to make this as premium as you possibly can.
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Marc Mullin: And you don’t want to have roadblocks, you definitely don’t want to send somebody home to get their verification ID—their ID. So we put in some things in place and made it very clear and easy on how they can transact and how they can transact seamlessly in store. So, um, that helped immensely in—in—in bringing this online and actually getting buy-in from our leadership team.
Bill Schneider: Awesome. So where do you go from here?
Marc Mullin: Uh, where we go from here? Well, there’s a lot of communities that I didn’t have circled. So, um, there’s a lot of opportunity. Um, I think with our brand that skews a little older, there are—there are some opportunities in the more of the retiree categories, um, but even students we’ve talked about how do you get them a pillow and sheets and get them started as, you know, a brand ambassador for us. So, uh, there’s opportunity to go deeper on communities. There’s also an opportunity to offer more, you know, do more from an offer perspective and—and build more of an everyday offer. So, um, yeah, lot of opportunity.
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Bill Schneider: Cool. Um, well thank you. Thanks Marc for being here and sharing your story. Um, if you have any questions, we will—we have a booth on the—um—on the main, uh, stage—on main floor downstairs, and we’ll be, uh, over here on the side. Thank you guys. Thank you all.
[00:24:19] [Applause and outro music]
Moderator: Okay, we’re going to move on to our next presentation. And we have coming to the stage Marc Mullin from Sleep Number and Bill Schneider from SheerID. And they’re going to present some work that they did recently with targeted community offers for Sleep Number, unlocking revenue growth. You guys have a presentation? There you go.
Bill Schneider: Thank you. Thank you. Thank you very much. Hi everyone. Nice to see you. Thanks for spending some time with us today. The next 20 minutes, we’re going to talk about community offers and the power of community offers. My name is Bill Schneider. I head up product marketing at SheerID. If you aren’t familiar with SheerID, we are an identity verification company for commerce brands. We work with hundreds of commerce brands to protect personalized offers to, uh, specific consumers within a community.
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Bill Schneider: And when I talk about a community, I’m talking about groups like, uh, students, teachers, members of the military, healthcare workers. What makes them similar is that they all share a common aspect of their identity. And what makes them different from a segment is that typically, they’re highly networked. Right? So we were talking about efficiency just a minute ago, um, and because you’re working with an offer for those specific communities and they’re highly networked, there’s a strong word-of-mouth effect, which helps, um, with marketing efficiency for customer acquisition and also loyalty. So, um, I am going to pass this off to Marc here, and he’s going to talk about how Sleep Number has used community-based offers to help them drive their growth. Um, it’s really been an important factor in their growth engine, and he’s going to talk about, um, how that has matured at Sleep Number over the last couple of years. Um, and then we will go back to Q&A and we’ll dig into some of the details. So, with that, Marc?
Marc Mullin: Thank you. Good afternoon, everybody. And thanks for coming. I know you guys had some choices, so we do really appreciate you choosing us today. I’m Marc Mullin, Sleep Number setting 35, my average SleepIQ score is an 82.
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Marc Mullin: How many people know what I’m talking about? How many people have a Sleep Number bed? Wow. Raise those hands again. How—that’s pretty impressive. I did not think we’d have that many. Er, there—we could get more, though. So I’m looking for more. If you want to come find me after, I’ll find you a coupon. We—we need more Sleep Number bed owners out there. All right, thank you, guys. Sleep Number—we are a—just a little bit overview on what we—what we do and what we are. We’re in the premium mattress space. We’re about a two-billion-dollar company, publicly traded. We’ve been in business for about 40 years. 650 stores roughly and over 4,000 employees. And, compared to Revlon, this is super easy because we only have one website, not 73. So, uh, that’s a little bit about Sleep Number.
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Marc Mullin: Um, what I do is I run all our promotions, so all pricing, uh, strategy as well as all financing offers that run through our company. So you go to our website today, you see the discounts—that comes from my team. There’s a very specific piece of what we do, which is community offers. Okay? When you think about the landscape of—of what we’re selling to, new customers, to what we call Smart Sleepers or insiders, referral, NFL partnership that we have, and various other partners, we also sell to communities. So, um, I’m going to talk a little bit about community marketing and why it’s important, how we leverage our omni-channel experience, and, um, how we unlock additional revenue, which is really at the end of the day what it’s all about.
All right. When we talk about, um, communities, SheerID is our partner here and they have many different communities that we can actually target. And the great thing is, is that we can verify any of these groups. Sleep Number today, we actually run offers for everything you see on the left-hand side. So, military, first responder, healthcare professionals, and teachers.
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Marc Mullin: And about 5% of our total sales annually come from these groups. So it’s very important for us. This is a very important strategy. Um, I’m going to keep moving, but there are—when you think about, uh, communities and—and why we’re doing—I talked about the sales lift, but really it’s about driving more customers into our store. Ultimately for us, like I said, we have 650 stores. Over 90%—well, 85 to 90% of our sales are actually in-store. The rest is web and—and, uh, in—and calls—and calling. So, um, when—what we’re doing with these offers primarily is to drive traffic into our stores.
And the important thing about the communities is that, you know, my—I’ll tell you guys personally, my wife’s a teacher. And if she sees an offer on the—on through SheerID or—or those competitors or actually a lot of times we get picked up organically, uh, we get offers picked up on, last year we had USA Today pick up some of our offers. So obviously that brings organic traffic into our store.
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Marc Mullin: And for those communities, like my wife who’s a teacher, she’s going to see those offers and actually, she’s more willing to buy and has a higher intent to buy for companies that are featuring those offers and—and utilizing these communities. You—so you think about that and then you got—so between, uh, driving additional traffic, but also adding credibility. Uh, the credibility within this group, your—your company, your brand gets a lot of credibility, especially I would say, especially in the military community where those customers are looking for these offers. And ultimately you get word of mouth. The cheapest form of marketing is referral. So what we love about these programs when we run them is that we get word of mouth. Obviously, within these communities, they’re talking to others within those communities and they’re—and they’re driving foot traffic into our stores, which ultimately leads to incremental sales and leads for us.
I’m going to talk a little bit about the journey. I’d mentioned we’re a 40-year-old company. We’ve been running community offers for quite some time, you can see about 15 years.
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Marc Mullin: What we had been doing prior to partnering with SheerID is a really pen-and-paper process in our stores. So, customer—we would run a military offer, generally about extra $100 off was our typical offer. And customers would come in and often times our sales people would sell on those offers and they would—the—what they had to do was actually just scan the ID and put it in a binder off to the side. Okay? And these were supposed to be audited. But obviously, after over 650 stores at the corporate level, we weren’t really auditing these binders. So we were seeing 40% take rate back then when we were running this in-house solution. 40% take rate on these offers and obviously, we were giving away a lot of margin in doing that.
Fast forward to the pandemic where we partnered with SheerID. Now, what we’re seeing is, uh, obviously more—we’ve—we’ve decreased the amount of customers that are taking the offer, but we’re actually expanding margin.
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Marc Mullin: Because we’re not giving it away to everybody. And what we’ve also found is that we can actually add—we can actually give a stronger offer to those customers because we know that they are who they say they are. So what we’ve generally found is about 20% off is the right level for to make—to everything I said in the last page, make them feel special, make—help them, you know, give them a reason to convert, give them a reason to come into the stores, roughly about 20%. So we’ve been able to go from $100 off to 20%, which has been great because we’re driving additional traffic with a meaningful offer, a relevant offer, and we’re converting at a higher rate.
Today we’re expanding this program. So we started with just military. Pandemic, we went to Heroes, so we added the healthcare community, first responders. Today we’re expanding this to not only be what historically had run a Vet’s Day only offer or Memorial Day only offer for military, today we’re running more of these offers more frequently with more expanded groups.
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Marc Mullin: And in the future, it’s about building a year-round growth channel. So, offering these offers every day and being relevant with this consumer every day for all the reasons we mentioned, for referral and for driving new foot traffic into our stores.
All right. So, a little bit about the execution on this. Um, first off, when you have this many stores, it’s really important to have consistent experience. And you want that to flow all the way to your website, obviously. And—and really what—most of our traffic, obviously your customer journey starts on the website. So, getting them there and moving them to the stores is our main objective. With this offer, with these types of offers, obviously I mentioned earlier, we’re picking—we’re picking up, we’re being picked up on various different channels. Customers are finding us through SheerID’s website.
[00:09:00]
Marc Mullin: And so as they come into the funnel and they come to the store, you want to make sure this is easy for them. One thing that we struggled with upfront was because our store checkout time today is 30, 35 minutes on average, we didn’t want to add an extra 10 minutes for this verification process. So it was really important for us to streamline this process, and SheerID helped us with that. And now it’s essentially instant verification in our store, and customers are obviously able to use that coupon immediately and transact.
On the website, from an omni-channel perspective, we do feature the offers. It—it generally at the—in the footer of our website. And so if you were to search on Google, you can find these offers. And it’s a very simple, easy-to-use form that then, like I said, is instantly verified and then that customer can take that coupon, either go into the store or—or purchase on the web.
[00:10:00]
Marc Mullin: Um, ultimately, this is my last slide and then we’ll—we’ll jump to Q&A, but like I said, a significant portion of our sales drive—comes through these offers each year. Um, but um, the gating of it is—is important because it’s allowed us, like I said, to increase discounts and then more effectively attract and convert those new customers to our brand, ultimately enhancing margin. So, um, like I said before, giving away money to customers that didn’t—didn’t actually qualify to now, um, we’ve—we’ve gated it to ensure that we are selling to only those customers, uh, that have the certain profession and, um, ultimately we drive—drive expanded margin growth through that strategy. So that’s it for me. I think we’ll go to Q&A.
Bill Schneider: Cool. All right, great. Let’s—let’s go into Q&A. Thanks, Marc. And you know, hats off to you guys on expanding your program, um, to multiple communities.
[00:11:00]
Bill Schneider: Obviously, the pandemic was a big opportunity to do so because essential workers was a community that a lot of brands were responding to and wanting to do something special for at that time. You know, as you guys moved, uh, from an in-house solution to a verification provider, you know, you mentioned margin erosion was an important aspect to you. What were some other considerations? What were you looking for in a verification provider as you made that switch, and who did you have to get involved, uh, to make that decision?
Marc Mullin: Yeah, um, good—yeah. So, a few things on that. And actually, the Revlon piece was interesting because it’s all about budget, right? And so, um, various—this is a very cross-functional effort. I will say the—the marketing team is super important in this. Um, if—if I run—I’m in the promotion space, so I’m—I’m generally in—in the pricing side, but I do have to partner with the marketing side to get buy-in.
[00:12:00]
Marc Mullin: Because if we’re not actually featuring these offers anywhere, uh, it’s not going to drive any incremental organic traffic into our stores. And ultimately what happens then is—is that customers are finding out about the offer when they walk in because the sales reps are asking them what their profession is in the discovery stage. So it was important for us to get buy-in more than ever to utilize marketing to a stronger degree because we have to get incremental people walking through the door. So, um, that was probably the—the biggest hurdle or piece to that, um, as far as getting—getting buy-in.
Bill Schneider: Getting buy-in from the marketing team. Did you also have, um, what types of conversations did you have—I’m wondering with like the finance team, um, obviously because you’re doing a—a discount or promotion that is above and beyond typically than your standard discount?
[00:13:00]
Bill Schneider: Was that—I mean, was that an important factor in this as well?
Marc Mullin: Yeah, yeah. So the way we teed this up from a business case perspective is that, um, like I said before, 40% of our sales were coming through these coupon offers. We knew that half of that was—not—was fake, right? Half of those—half of those sales were actually unverified sales that were not who—people were not who they said they were. So we actually had to convince the finance team—good point—and the marketing team that we were actually going to drive more overall sales. We may actually drive fewer sales on a coupon, which we actually did. We actually drove—when we flipped to this solution, we actually drove fewer overall units through this coupon, through the verified community, but we actually drove more overall sales. So we had to be really thoughtful in the planning process, as we go through our forecasting process to—to actually sort of estimate and then prove out what we thought would happen.
[00:14:00]
Marc Mullin: And it’s actually—it’s actually fairly easy because we knew how many households in the US were—were actually had a military person, actually had a healthcare person in that—in that household. So we actually had a better idea of what percentage should be coming through our stores and should be transacting through these coupons. And that actually came to be true. And that was with help of SheerID in trying to build this business case and ultimately to drive more sales, which we have done.
Bill Schneider: Got it. So you—you had mentioned that, you know, your wife’s an educator and it’s one of—one of the ways in which she learns about new brands is through, um, educator discounts. And we—um—we actually recently did a—a survey of consumers, 3,200 consumers, uh, we issued an announcement yesterday that polled consumers within these communities, um, what impact these offers have on their purchasing decisions.
[00:15:00]
Bill Schneider: And 80% had indicated that it is typically the first way that they do a search when they’re looking at a new product category. So it’s a great way to drive intent, is the word you use, drive trial, right? Um, why—so there’s one part of that that kind of—the economic benefit, right? Like, hey, you know, if I can get a—a benefit for my community, I’m going to take advantage of that. Um, but we also see really strong engagement and loyalty, um, to these offers as well. And you know, what—I mean, maybe I don’t know if your wife kind of shared like what her perspective on it was, but I’m interested in if you have some—a point of view on that as well?
Marc Mullin: I so—we—I do a lot of focused time with our store teams and our call center team. And I will say there’s—there’s definitely more of an—for the military segment, there’s a lot more awareness and actually it’s almost—it’s not table stakes, but for—for some, it actually is.
[00:16:00]
Marc Mullin: And so I hear more—about 5% of our calls, there’s a mention of military discounts. So we’re actually—like that is probably more prevalent. I think the other communities, I think the pandemic made—like unlocked some of these types of offers with Hero-type of offers and sort of brought awareness to the fact that you actually can get discounts if you’re part of a certain community. I would say my wife didn’t, you know, sample size of one, didn’t know that, um, and I think now it—because there are so many offers out there for her and in her profession. And the same can be said for healthcare, first responders, and all the other communities, students—there’s a number of communities that don’t make sense for our brand, but actually do make sense for many others. And I think the awareness of—of these offers is growing. So that’s what—that’s what I see.
[00:17:00]
Marc Mullin: And that’s actually what I hear from our store teams. When we’re off of a military offer, I get consistent feedback and requests to come back onto a military offer because military personnel are coming in asking, “What is your military discount?” And so when you don’t have that, it—it sort of—you—it’s table stakes. And, um, so that’s where—when we talk about like what’s next, it’s bringing more offers every day to maybe not as deep of a discount, but bringing something so that they feel that they’re appreciated and that they feel sort of more loyal to the brand, which is really what we’re looking for ultimately, like I said, word of mouth and referral is—that’s—now we know you’ve got it if you can—we’re really a big—because we’re in the premium space, we’re really a big—big referral business. And so this is—fits right into where we’re at because these groups of communities do refer at heavier rates.
[00:18:00]
Bill Schneider: Yeah, you had mentioned, um, people feel appreciated, you know. We’ve seen in—that was another aspect of the survey we recently did, and, um, the attributes, the—the feelings, the emotional connection that people had responded with was they feel valued, they feel appreciated, in some cases they feel honored. Um, and it—makes sense and is highly impactful because ultimately if you’re a member of the military, if you’re a teacher, you know, you’re spending a—a big amount of investment, a personal investment in that vocation. And when you get recognized by the brand on the other end, that—um—that creates that emotional meaningful connection that helps drive loyalty, right?
And I know loyalty is a big component for you as well. Um, I mean, you mentioned, um, there’s, you know, the initial acquisition component to help drive growth, but like from a loyalty perspective, what have you seen with these types of offers and these types of communities?
[00:19:00]
Bill Schneider: And how do you think about—I know because you’ve got a loyalty program and you’ve got other groups, your employee base as well, you’ve got special offers for them as well. How—how does this fit into, um, those different—uh—those segments, those different groups of customers that you use to—to drive repeat business?
Marc Mullin: Yeah, couple things. Over half of what we sell is loyalty. It’s—it’s—it’s repeat and referral. Um, so it is a big piece of that. We—we do have a system—uh—any—most retailers especially, um, to—those that have sales people, there’s a—we have lead software essentially tracking everything about the person that walks in the door. You know, we’re making notes and—and we’re—and we’re keeping these in a database. And this falls sort of perfectly for us, uh, from a retarget perspective.
[00:20:00]
Marc Mullin: When we verify somebody, they get coded automatically through our system as whatever their profession is so that if we want to go back and retarget, uh, we can easily do that. We can pull call lists for our store teams and they can go retarget these customers. So, um, and if they don’t purchase—and if they verify and they don’t purchase—then again, they’re still in that pipeline. And if they do purchase, now they’re loyalty and now we can retarget them and—and ask for referrals through—uh—through their networks. That way. So, um, the—the unlock there for us has been great because the more you can understand about your customer, the more personalization you can make, and, you know, with a—with a text, whether it’s a text, a phone call, or an email that we’re sending them, uh, now we can personalize that communication to make it special for them.
[00:21:00]
Marc Mullin: And so, um, we had not done that before because we had no way of keeping record and we didn’t actually trust that they were who they said they were. So, uh, there’s been a lot of win from—from that and I think it’s partially why we’ve unlocked additional revenue off of this program.
Bill Schneider: Yeah, I mean that’s a great point. So these offers provide an opportunity to collect first-party data. Uh, from new individuals because essentially you’re giving them a benefit, they’re going to raise their hand and say, “I want you to look this up about me so that I can get the reward on the other end.” And then you’re using it then for retargeting, personalized marketing downstream.
Um, okay, we got time for, um, one more question real quick. So, you know, you had mentioned omni-channel as a big component to this as well, right?
[00:22:00]
Bill Schneider: And obviously, a lot of these sessions are getting—they’re getting started in the online channel. What did you have to do to get, um, to make that a seamless process in the in-store experience when consumers, when your customers came in, uh, with their verified status?
Marc Mullin: Um, yeah, we—obviously if—like I said, your customers are coming in, they’re hearing about the offers sometimes from the sales people, so we had to make it easy on mobile. Because they’re—you—and so we have iPads in the store too. So we had to make it easily accessible on our iPad, we built an app on the iPad. We also—it’s on our website so the customer could do it on their mobile phone. Um, and we made an instant verification process that actually was unique to what SheerID could do before they brought us on because like I said, uh, we had to streamline the checkout process. Uh, somebody with that high—build—high of a ticket—like I said, we’re well over $5,000 for an average mattress—so it’s—um—so you want to make this as premium as you possibly can.
[00:23:00]
Marc Mullin: And you don’t want to have roadblocks, you definitely don’t want to send somebody home to get their verification ID—their ID. So we put in some things in place and made it very clear and easy on how they can transact and how they can transact seamlessly in store. So, um, that helped immensely in—in—in bringing this online and actually getting buy-in from our leadership team.
Bill Schneider: Awesome. So where do you go from here?
Marc Mullin: Uh, where we go from here? Well, there’s a lot of communities that I didn’t have circled. So, um, there’s a lot of opportunity. Um, I think with our brand that skews a little older, there are—there are some opportunities in the more of the retiree categories, um, but even students we’ve talked about how do you get them a pillow and sheets and get them started as, you know, a brand ambassador for us. So, uh, there’s opportunity to go deeper on communities. There’s also an opportunity to offer more, you know, do more from an offer perspective and—and build more of an everyday offer. So, um, yeah, lot of opportunity.
[00:24:00]
Bill Schneider: Cool. Um, well thank you. Thanks Marc for being here and sharing your story. Um, if you have any questions, we will—we have a booth on the—um—on the main, uh, stage—on main floor downstairs, and we’ll be, uh, over here on the side. Thank you guys. Thank you all.
[00:24:19] [Applause and outro music]
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