How We Doubled Revenue Last Year Through Affiliate Marketing
This is a follow up story for Baloo Living. If you're interested in reading how they got started, published about 5 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
Baloo Living is a sleep and wellness company created in Bali in 2017. Our signature product is the Baloo weighted blanket, an incredible tool for calming the nervous system with gentle pressure, similar to the way being hugged or held makes us feel naturally calm. These blankets have been used for decades by therapists and are now going mainstream as people discover just how powerful they can be for improving sleep and anxiety--without the use of medication. Our customers are people who may have trouble sleeping looking for sleep aid, as well as those who understand how incrementally improving their sleep is a powerful way to improve overall health and wellbeing.
I launched Baloo through Amazon but have been successful at growing off-Amazon; now 75% of our business is through our website and third-party retailers. Revenues have doubled year over year for three consecutive years due to a growing market and demand, as well as growing brand recognition.
Tell us about what you’ve been up to! Has the business been growing?
The business has doubled since we last spoke due to a combination of factors. In 2020 there was a shift toward health and wellbeing as well as an increase in interest in insomnia treatments and sleep aids. The world was feeling anxious and sleep was disrupted. Our sales increased dramatically as a result in the spring and continued to stay above the previous year’s levels. As the holiday season approached, and while unfortunately, traditional retailer business declined, we definitely benefited from consumers’ habits shifting toward eCommerce.
When you’re struggling to grow your business, look at the data first to get in touch with what’s really happening.
We saw google search results related to insomnia and sleep increase dramatically in March and April, year over year:
We have been working with the same PR agency since we launched several years ago and this year we were featured in dozens of gift guides and editorial guides including Vogue, GQ, Apartment Therapy, The Wirecutter, and The Strategist. We also did a sponsored podcast episode with Dave Asprey’s Bulletproof Radio in November as a test to reach a new audience. The episode was very effective at reaching an audience interested in health and wellness, and we saw the power of an endorsement from a trusted expert. We created ads on Facebook using content from the episode to target similar audiences and that campaign was quite successful for us.
Our strongest sales channels are the affiliate channel, SEO and organic search, and email marketing. We’ve had the most success with building relationships with strong media properties like The Strategist and CNET who publish unbiased product reviews and recommend our products. Our partners came to us through a combination of my own outreach, our PR agency, and through organic inbound inquiries and we pay a starting commission of 15% on sales referred by those affiliates.
I’m most excited about how the team has been growing with the addition of a director of operations and building up our marketing department in-house, as well as adding support to our US-based customer service team. We see customer service not as a cost center but as an extension of marketing and consumer insights; we encourage customers to call our toll free number and speak to a real person--it’s actually my mom who answers the phones--and we design our policies to be empathic and supportive of our customers as much as possible. Many of our reviews call out the great experience with customer service. We love surprising people by having a real person answer the phone without the need for navigating an automated system. We use Gorgias for our customer service help desk, which integrates with AirCall - but AirCall is quite expensive so we use Grasshopper instead and that has been great for us.
What have been your biggest lessons learned in the last year?
We are strongly challenging the data and attribution models provided to us by Facebook Business Manager. We use a 7-day click, 25% of the 7-day view attribution model - which as I write this should be revised to 7-day click, 1-day view - versus the default 28-day click, 1-day view attribution model. We’re currently running a lift study to assess the incremental impact of Facebook. To do this we suppress 50% of our audiences as a control group, then measure conversions within the control group and the group that’s served our ads, and compare the difference in sales. Early results indicate that Facebook is overstating the true conversion value by an astonishing multiple. While we’re mid-study I’m not yet ready to share the numbers, but the results indicate that Facebook may not be a viable channel for us to grow our business. As a direct to consumer brand where the conventional wisdom is to use paid social as a primary channel - this comes as a bit of a surprise.
Whatever the final results of this study, I do believe validating the data in a channel where we spend hundreds of thousands of dollars will come to be our greatest learning of 2020. The next steps based on this data are yet to be determined but may include saving us significant marketing spend.
Personally, my life has changed in amazing ways this year because our team has grown! In 2019 I hired my first full-time employee, a marketing coordinator. Unfortunately, that hire did not work out, but I learned so much about hiring and team building through that experience. So in 2020, I’m thrilled to say that the three full-time hires that joined the business are doing exceptionally well. One of those people is my sister, Jennifer, who left her 15-year career in publishing and sales to join us as the Director of Operations. She’s implementing more systems and structure in the business, and it’s been wonderful for me to have as a partner and sounding board. Two other extremely impactful new team members are our new marketing coordinator, as well as an outsourced CMO with deep experience in digital marketing and data analytics. From talking to other CEOs I know that building a strong team can be one of the most challenging things to do, but when it works, it’s life-changing! I used to work 12-14 hour days, 6 days a week, and now I work normal business hours, with weekends off.
Practically speaking, the steps we follow for finding a new hire include posting a job description online (we use AngelList and Indeed) and including a specific directive. We ask people to use their favorite emoji in the first sentence of the cover letter. Those who leave it out either don’t care that much, or aren’t careful about details. We also include a link in the job description to complete a google form to apply for the position. Those who disregard the link and apply only through the platform are disregarded. Within the google form, we include questions to assess previous experience relative to the role, with some situational questions to see how the candidate would respond in a given situation. For a customer service role, we’ll present a scenario and ask the person how they would handle it. For a marketing role, we may ask them to judge three potential IG partners and tell us who they would work with and why or why not. In these cases, there isn’t a right answer but it helps us see how they think and approach problems. Once we receive a critical mass of applications we go through them all at once and score them on a scale of 1-5. Those who receive a 5 rating are invited to complete a second, more thorough google survey with more questions specific to their role. We tell people that we value their time, this may take up to an hour, and we are only asking a select number of people to complete this survey.
Finally, after receiving these responses we know these candidates are serious about the role, and we have much more data to decide who to interview. We will interview as many candidates as we can, and I’ll ask our Director of Ops to interview separately, so we have more than one round, and more than one impression. Before making an offer, I’ll ask our Marketing Coordinator and CMO to also speak with our shortlist of candidates, which I think is even more important for giving the potential new hire a better sense of the company and makes their onboarding smoother. So far, this process has helped make hiring a much more streamlined and effective process, although it’s still very time and energy-consuming.
What’s in the plans for the upcoming year, and the next 5 years?
Our plan for the long term is to continue to grow a profitable business offering quality products to a loyal customer base. My goal is to see us as a quietly profitable yet respectably sized business with eight figures of annual revenue, a remote, US-based team of no more than a couple of dozen, and a family-friendly atmosphere. One of my greatest satisfactions is being able to give back and do good with our brand. We’ve donated hundreds of blankets to healthcare workers during the COVID crisis, we give back to our partner nonprofit the Pajama Program, offset our carbon footprint from production, operations, and shipping with donations to environmental programs, and say yes to many other opportunities to support our communities that come to us.
We’ve grown steadily and profitably from an initial family loan of just $20,000 to a company with five million dollars in revenue in less than three years by focusing on efficiency, and staying focused on product, quality, and giving our customers a unique option that’s different from others in the market. We’re a niche player because five million in revenue is little compared to the larger players in the weighted blanket space, but I’m happy with our growth which is based on solid fundamentals, brand awareness, and strong partnerships.
This year the focus is to expand our product line beyond weighted blankets specifically by adding items that round out the idea of sanctuary in the home - soft, natural materials for the bedroom - to help encourage customers to come back to shop with us and to increase the lifetime value of a customer.
This year we’ve added the Sleep Stone Mask, a patent-pending eye mask that has a hidden pocket to hold a crystal over the third eye, and the n.o.w. Tone Therapy Meditation Speakers are amazing for soothing the nervous system in just three minutes.
Have you read any good books in the last year?
I listen to books on Audible, and two I recommend from this year are How I Built This by Guy Raz, based on the interviews from his NPR show of the same name, and The Code of the Extraordinary Mind, by Vishen Lakhiani, founder of Mind Valley.
How I Built This is full of stories of founders on their journey to build their brands, and it helped me look at our business differently from a fresh perspective in numerous ways. Each founder has a unique go to market strategy, and all must overcome galling challenges.
The Code of the Extraordinary Mind I find helpful as a counterbalance to the very concrete world of eCommerce that I sometimes find myself in; it’s a reminder that the universe works in non-linear and ways through energy, and that we have so much power within each of us to shape the worlds around us. It reminded me to broaden my perspective and to be curious about what I may not see or understand, which may be working in my favor, and to have faith in the process.
Another book that blew my mind is Why We Sleep, by Dr. Matthew Walker, Ph.D. The sheer number and importance of what’s happening in the body during sleep and how it impacts us, from improving every biological system in our body, mood, creativity, memory, emotion, patience, reaction time, muscle recovery, heart disease, sex drive, weight gain, etc, etc, is astounding, and in this book, the systems are clearly outlined with easy to read explanations of the studies behind each of these conclusions, with the logic that helped me understand WHY the sleep advice experts give us really matters.
Advice for other entrepreneurs who might be struggling to grow their business?
When you’re struggling to grow your business, look at the data first to get in touch with what’s really happening. I think it can be overwhelming with how many options there are for things to do - there are always so many tips being shared to hack growth - but you can make yourself crazy trying to chase and implement numerous strategies that other people recommend. The best thing is to look at the business you have and understand what is working. Maybe it’s on a small scale, but eliminate the distractions and focus on the one or two key drivers to optimize and grow those, before trying to master every potential sales channel. It’s important to diversify channels, but more important to establish a healthy foundation to grow from. I used to be terrible about trying to do everything - I’d email my team a link to a new case study and say “we should try this!” which only pulled us away from our priorities. By adding more experienced digital marketers to our team I’ve learned to focus on metrics and data and to ignore the shiny objects.
So where do you get the best data? We invested in an outside agency to set up our google analytics properly. If you don’t do that, the data in Google Analytics can be hard to interpret at best, and inaccurate at worst, so I say this as a word of caution against using Google Analytics as a basis for decision making in the early stages. We added a question to our post-purchase emails to ask customers how they heard of us - and while it’s anecdotal, that information is extremely useful. Other ways to get data are by using HotJar (only $29/mo) to understand how users interact with your website or doing user testing to get 1:1 feedback from a real person to understand how well your message is coming through, what may be confusing, or what may prevent a person from buying. I recommend usertesting.com as one of the more affordable options for this. It takes a little bit of time to conduct this research, but the payoff is huge.
It doesn’t hurt to review what I see as the fundamentals for a web-based business in order of priority. First, make sure the website is optimized to convert. It would be a waste to spend resources attracting traffic if the site won’t convert. Next, install the basic email flows - welcome, abandoned cart, browse abandonment, and post-purchase upsell. Don’t worry if these are not built out to the max, but you do want to have the basics there in place because that’s a meaningful part of your site conversion. Then I think it’s time to market and begin attracting traffic to your site, which can be done in many different ways depending on your niche. This is simple, but I do see entrepreneurs often working hard to build traffic with a site that’s not optimized to convert. Keep it simple, remember people don’t have time to read much, photos (or images) are vital, more than half your traffic will likely be coming from mobile, and make it easy for people to understand what they’re supposed to do next (where to click, what to choose, etc.)
Are you looking to hire for certain positions right now?
The next position we’re hiring for is a production manager to work closely with me on new product development, sourcing, and production! This is a remote, US-based position.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
