Andy Hayes on Subscription Boxes, Community, and Email Marketing

Interviews

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Tara:  Hey everyone.  Welcome to Profit. Power. Pursuit.  I’m Tara Gentile, your host, and together with CreativeLive, we explore the unique strategies that creative entrepreneurs use to take control of their lives, profit from their passions, and pursue what’s truly important to them.

Today, I’ll talk to my friend, Andy Hayes, founder of Plum Deluxe, a subscription tea service that helps people create moments that matter.  I spoke with Andy about the windy road he took to finally find the business idea that would work, what he’s learned about growing a business with a physical product, and the unusual way he’s finding new subscribers.  Andy Hayes, welcome to Profit. Power. Pursuit.  Thank you so much for joining me.

Andy:  Absolutely.

Tara:  All right.  So let’s dive right in.  When you first told me about the idea behind Plum Deluxe, you told me about your vision for helping people find affordable luxury.  What does affordable luxury mean to you today?

Andy:  Juicy question to start.  I feel like it’s changed a lot for me, and that in turn has helped me be a better teacher of that to other people.  So for me, what does affordable luxury mean to me?  To me, it’s a very individual concept, and to me, it’s the things in your life, the experiences, the objects that do not require a large amount of time or money to make you feel really good, and so for some people, that may be a walk in the park, more time with your grandchildren, or for other people, it might be frozen yogurt, House of Cards on Netflix, etc.  So it’s a very individual thing, but to me, it’s a small amount of effort equals a delicious reward.

Tara:  Ooh, that’s awesome.  I love the personalized aspect of it, too.

Andy:  Well, absolutely, because otherwise, it doesn’t feel very luxurious I don’t think.

Tara:  That’s a good a point.  So why, I think you’ve basically already answered this, but I want to dig a little further.  Why actually pursue luxury?  I think it’s something that we think of as beyond the necessities, so why put attention to it?  Why pursue it?

Andy:  Well, I feel like our lives have so many challenges to them, you know, building a career, building a portfolio or book of work.  I know a lot of people listening to this call have their own businesses, and that’s a whole endeavor into itself.  Raising children is a big piece of work.  So if our lives have so many big kind of seemingly heavy things to them, not to say that, you know, any of those things are heavy, but it’s just there’s a lot to take in and a lot to hold, then we owe it to ourselves to take care of ourself.  To take good care of ourselves, so that we can show up fully in all those things, and to me, luxury represents the things that sort of really make you feel like you’re able to take on the world.  They are the things that as we say in the cliché, make you feel like a million bucks, and you know, I think we owe it to ourselves those things.  I think in today’s culture, luxury has a very specific connotation, and it’s not necessarily a good one, and we need to change our tunes a bit on that, and remind ourselves, and this is … if you’re hearing this, this is a reminder for you, that whatever you feel like a little luxury is in your life, you deserve it.  You can have it.  It’s totally okay, and even if your definition of the thing that really makes you feel good is kind of weird or different or strange, that’s totally cool.  Like rock on with it.  You know, I … nobody’s going to judge.

Tara:  Nice.  I love kind of thinking of you as a spokesperson for luxury for everyone, not just, you know, the rich or the famous. 

Andy:  Thanks.  I like that.

Tara:  Yeah.

Andy:  I like that.  I had someone else also told me they felt like I was a spokesperson for helping people to slow down.

Tara:  Oh, nice.

Andy:  And I feel like that kind of goes hand-in-hand.  I think Plum Deluxe is a great place to stop for a moment, and it’s in those spaces that you can get a feel for the things that are really important to you and what they look like and how you can make room for them.

Tara:  I love that.  So tell us a little bit more about Plum Deluxe.  What is your business?

Andy:  Plum Deluxe.  Well, the business of Plum Deluxe is actually a purveyor of premium loose leaf tea.  All organic, all free trade, free of artificial chemicals, sweeteners, etc.  That is our business, per se, but I think, as I like to tell people, we’re more in the business of helping people create moments that matter, and that ties right into that thing about slowing down.  So if you think about tea, tea is often paired with a lot of very slow, thoughtful moments.  You know, catching up with an old friend.  Mothers and daughters getting together, you know, for thoughtful conversation.  Slowing down and trying to take in everything that’s happened at the end of a busy day, and so that’s why, if you go to the Plum Deluxe website, under our logo, it doesn’t say, you know, organic tea, you know, oh my God, you know, get all of it before it’s gone.  It says making moments matter, because that’s what I feel like our mission truly is try to help people create those moments, and the tea is just how we actually pay ourselves along that path.

Tara:  I love that, because, so I’m a big fan of thinking of products as tools.  We buy products to help us accomplish something, and often, especially people who sell physical goods kind of get caught up in that, because they don’t see what it is that their product helps someone accomplish.  All they see is the product, and so I love hearing from you that you see tea as really being a tool for helping people accomplish those moments that matter.

Andy:  And it took me awhile to figure it out, so I, you know, I don’t want to overlook that statement that you just made that it’s easy to get yourself lost in that.  I mean, I came at it from a different angle.  I had Plum Deluxe before the tea, and I tried a lot of different things to see what fit, and having a physical product for me worked the best, because it’s physical.  People actually have an experience with it.  You know, they taste it, they see it, they smell it, they, you know, can meet other customers in our Facebook group, so there’s, you know, the conversation.  So for me, that’s what worked best, but I came to that along a journey.  It didn’t … you know, I would love to say I was so genius that I was like, oh, you know, this is, you know, we’re about moments, and you know, the tea’s how it all works.  That all came together, but it took a long time.  Like, you know, five years.

Tara:  Yeah.

Andy:  So …

Tara:  I’m really glad you pointed that out, so let’s actually hear a little bit more about your journey, because I think, you know, the different things that you’ve been doing in online business are really interesting.  You had a travel blog for awhile, Plum Deluxe started and was maybe something a little bit different, and then you’ve evolved into the tea.  Can you tell us what that journey actually looked like?

Andy:  Oh my goodness, we’re going to need three episodes for this.  Okay, so I used to be in IT corporate software, and was really burnt out and seeking a change, really wanted, I had experienced two or three different corporate mergers.  Each time, I ended up on the shorter end of the stick.  I didn’t lose my job, but I just found myself in a worse and worse work environment, and so I decided I was going to take control of my future, and I left, and the thing that I started, that you mentioned, travel, that was where I started, because I was living in Edinburgh, Scotland, and Edinburgh’s a big tourism town, and I kind of ended up in there, and travel, the thing that I was talking about when I was in travel was I wanted to understand why we were better versions of ourselves when we were on vacation.

Tara:  Ooh.

Andy:  That is the thing that started it all.  I wanted to understand that, and when I started to get my head around it, I learned, and I realized that to be in the travel business, you needed to travel all of the time, or hire people to travel for you, and it just doesn’t, it just didn’t really, wasn’t clicking for me.

Tara:  Mmhmm.

Andy:  I had a lot of early success.  You know, I was blogging and kind of in the social media things really early, and so I did have a lot of visual success in terms of followers, you know, page views, things that I don’t think mean a whole lot, but as a business, it was not very stable.  It was just, yeah, not … it was very unstable.  So that’s when the brand came in, because I felt like I had started and not really done that step, and that’s something that I knew how to do really well was creating brands.  It was part of my old work in the IT space.  So I stopped and kind of got myself around Plum Deluxe, and the whole, you know, affordable luxury, life’s little luxuries thing, and so that really established me as a footprint, and I said okay, you know, I kind of have an idea about what I stand for.  I stand for moments.  I stand for slowing down and finding things that are important to you.  I stand for understanding how to be the best version of yourself.  I stand, you know, I was really trying to find the right words for it, but I knew what I stood for, you know, and I think that part of having a good brand, especially if you’re an artisan or a small business, is knowing what you stand for, whether it’s you state your values or you have a great tagline or mission statement, but you know, I think of it as like what do you stand for?  Like what do you want to be known for?  When you die and the business is left behind, what are people going to say about it?  What do you want people to say about it?  So I was getting my feet around that, and I still was this elusive what is the business model that supports this thing?  This site, this structure that’s trying to talk to people about moments?  And let’s see, what did … I think I started out first with affiliates and selling other people’s stuff, and I found out that to make that successful, you needed to have just a crappola ton of traffic.

Tara:  Yes.

Andy:  I’m sure you can link to a footnote on how much traffic that is.  I do not know, but it’s a lot, and I also found that very unfulfilling, because I was selling other people’s stuff.  Like, you know, affiliate links to teapots on Amazon.  There’s nothing wrong with it, but I found it unfulfilling.  So then we started doing sponsorships.  You know, having people sponsor different sections of the site, because at this point, we’d really broadened our horizons, and we were not just talking about this travel and how do you really become the best version of yourself, but it’s like how do you bring that home?  So we had a lot about recipes and entertaining.  I mean, the same things that you see now in Plum Deluxe, if you go to our blog, you see a lot about entertaining and gathering, small gatherings, having people together.  You see a lot about mindfulness and self-care.  So this was already starting to show up.  We still don’t have a business model.  So then I thought about the sponsorships, and I would have sponsors in different sections, and the problem with that model was I found that sponsors didn’t want to pay what I thought I was worth, so that was always really difficult, and sponsorships are a difficult sell.  I find it really interesting now, and we’ll get to that later, I actually purchase a lot of sponsorships now as a successful product business, but at the time, I was really not very good at selling sponsorships, and so that fizzled, and then I moved into events, which was the worst thing that I’ve ever done as a business owner is host events.  If you’re listening and went to one of my events, I’m sure you had a good time, please tell everyone that you did, but I would do like these themed events, so it’s like you, you know, I think it was a good concept, and maybe someday it’ll be a thing again, but you would be part of this Plum Deluxe community and having these conversations and you know, reading stories about great parties and you know, how to, you know, talk about politics without angering your friends, and just did different things, and then you would actually go and meet people who also follow Plum Deluxe in person at these themed events.  So we’d have like, you know, Washington Wine night, or you know, Oregon Bourbon Party, like all these different things.  And that was very stressful.  Events are very hard, because you have to do sales twice.  You have to sell the seats, and you also have to sell all the sponsorships and products and promotions that pay for everything.  They’re very difficult.  At least I felt they were difficult.

So I decided after that I really needed to take stock of what I was going to do, because at this point, you could imagine I’m feeling like wow, I’ve been doing this for a long time, and I’ve not really made any results, and while people are really liking what I’m doing and very interested, you know, I felt like I have always had a following of people who really want to know what I’m going to do next, because I’ve always, you know, knew what I stood for, and I feel like people always saw where I was going, but I didn’t.  So people were like, oh, you know, I really want to see where this goes, and I decided that I was going to … The only thing that I had not done that I would try to do was my own products, and I will say that I had a lot of people tell me if I had sold my own stuff, they would buy it, no matter what it was.  So I took them up on their offer, and I said, okay, Plum Deluxe, you know, little luxuries, slowing down, moments that matter, you know, like what product would we sell, and I’ve lived in Europe for a good part of my life and very steeped in tea culture, pun intended, and you knew that was going to come in there, didn’t you?

Tara:  Oh, yeah.

Andy:  So I decided that tea would be a lot of fun, and I would give it a try, and I really lucked out into finding a mentor who helped me get started, and the amazing thing was that all those people on my newsletter list or in my community were correct.  They said if I would make something, they would buy it.  They have.  And so the tea, I think I’m just I’m now in to my, about to start my third year into it, but I’ve had a more successful two years than all the other ones combined, and doubled and tripled, I’m sure.

Tara:  That’s awesome.  So when I first saw that you were coming out with the tea, I was like that is brilliant and awesome, and then I was also thinking how the heck did he work that out?  How did he get that product developed?  Is it like is he white labeling someone else’s product?  Like can you tell us like actually kind of the step-by-step of how you went about developing the tea line?

Andy:  Yeah, yeah.  It’s a good question, because I had the same question, Tara.  How the heck am I going to do that, and I really lucked into someone who could help me.  I found a mentor who had a successful tea business on the east coast, in Pennsylvania.  We had a mutual connection, who you know, Tara, Carrie Keplinger.  She introduced me, and I got a lot of mentoring.  And I feel like in this particular business, some mentoring is really useful, but let’s just break it down into general steps.  So the first thing is you need to know what your concepts are going to be.  So how did I want to appear in the tea world?  And I knew that I was really excited about creating things.  You know, I really wanted to have lots of like seasonal teas.  You know, some of my tea favorites are things that are like, you know, just for the holidays or pumpkin spice, or you know, these like just really limited edition things, and to me, it seemed like a tea club where the things would change every month really suited my personality, because I could be creating all the time and actually have a place for it to go.  So that really suited me.  A lot of people might think that’s a terrible idea for them, that that would be way too much, so you really need to think about your concepts, and the other thing that I also thought about for my tea products is I wanted to really tie into my moments mission, and so a lot of the earlier teas that we developed were kind of tied to moments.  Reading Nook tea was one of the first, and it says it’s great for reading and writing.  You know, we have, for years, we had published blog posts about reading nooks and about journaling prompts and about conversation starters.  Well, here is a tea for all those things.  You know, it just, it fit right in there.  We had Cuddle Time Tea was one of our first, it helps you sleep, and that fit right into, you know, the turning your brain off at night and trying to calm down and with stress and self-care.  You know, you had Self-Care Blend.  So for me, that was my shtick was the moments, and so I think that’s what people were thinking about something like this would really need to look at is how would your product show up in the world?  And for me, you know, it’s like these really interesting names that are tied to activities all underlying a foundation that is a tea club where the tea changes every month.  So I kind of laid out that.  If you think of it as almost like a blueprint, you know, like I was kind of an architect here, like saying okay, what are the, how are the, what’s the structure that puts this all in place?

And so from there, I then went and got the help I needed to actually, like, write recipes, you know, learn how to write recipes, and put things together.  Now, you could, at that point, said I’m just going to white label someone else’s product.  And that does happen in this industry a lot, and there’s nothing wrong with that, but I just made a decision, a very conscious decision, and for almost all physical product people, you have to actually do this side of this.  This is … I wanted to manufacture the product.  I wanted to have, like, really tight control over how it was put together, because, and this is partly because I had had so many failures, I really wanted to be able to turn on a dime.  You know, if I controlled all the pieces, I could just like, errr, you know, nope, that’s not right.  You know, change that up here, down here, left here.  So that’s why I did it like that, but all physical products, you do have that kind of big decision point, and it can be different for different people, and we might even, you know, later do tea ware or something where we white label it.  You know, it can go either way, but I don’t white label.  We make everything our self, because it just happens to be something that, you know, we’ve gotten really good at and we like it, so that’s how I do it, but you can white label.

The downside, and let’s talk about that for a second.  The upside of white labeling is you get started faster, and you don’t have to recreate the wheel.  The downside of white labeling is you have less control, most of the time, and you also are paying a little bit of your profit out, because you have to, you know, like whomever is providing the white label product has set the price, whereas I can shop around for my ingredients, I can kind of work my recipes to get my pricing down, etc.

Tara:  Nice.  And we should probably clarify, too, that white labeling is when you put your brand on someone else’s product.  It looks like your product, but it’s made by someone else.

Andy:  Yeah.  So like in the tea world, here’s an example.  In the tea world, you could white label tea.  So what would happen is you would have this box arrive with a big bag full of tea, and then you would put it into tins that had your label on them.  Or maybe the supplier does that for you, but that tea is also in someone else’s tin somewhere.

Tara:  Right.

Andy:  But you could name it something else.  You could have a different marketing tactic for it, but it’s the same product in the inside.

Tara:  Perfect.  So are you … are you physically manufacturing your tea, or are you blending it, deciding on the recipes, and outsourcing that manufacturing?  How does that work?

Andy:  So we’re a tea blender.  So we don’t have … we’re not a manufacturer, because I don’t have like tea plants in my backyard or something.

Tara:  Right.

Andy:  You know, here in Oregon, there is a tea plantation, but even I would outstrip their production.

Tara:  Oh, wow.

Andy:  So it’s just, it’s not… yeah.  Yeah.  So there’s a lot going on.  So we buy the raw ingredients, and then blend everything in-house.

Tara:  Nice.  Okay, awesome.  I am so glad that I know how that works now.

Andy:  Yeah, yeah.  It’s really interesting to see it all come together.  You know, it’s different, they’re different colors, they smell differently, they look different, and then when they come together, you know, the tea actually kind of transforms, in a way, even before you put it in hot water.  So it’s kind of fun.

Tara:  Yeah, that is so cool.  I mean, really, as I’ve watched, you know, each kind of iteration of how you’ve been working on this, it keeps coming into my mind exactly what you just said.  Like the product itself is so almost like sensuous the way, you know, there’s a smell and there’s color and there’s texture and there’s so many ways that you sense the product itself.  It seemed like it would be just so much fun to do.

Andy:  I love it.  It’s a lot of fun, and it’s … We have kind of this, I feel, real close attachment to our customers, because just of the nature of the product.

Tara:  Yeah.

Andy:  So it makes … It means you have to really be on your game for customer service, but it also means that you can really establish a lifelong customer, if you show up for that conversation I feel like.

Tara:  Yeah, that’s awesome.  Okay, so let’s talk about the ways that Plum Deluxe is generating revenue today.  You mentioned the Tea Club, and so tell us about that, and then tell us, also, how else you’re generating revenue right now.

Andy:  Yeah, so Tea Club is our main revenue driver, and so that’s a $10 a month subscription that people pay quarterly, and I created that program modeled off of Amazon Prime.

Tara:  Nice.

Andy:  With the exception that you get something with it.  I guess Amazon Prime you get like free movies, so maybe it does correlate, but the thing that I wanted to create was sort of $10 and you get all these extra things in addition to the tea.  And that really seems to have hit with people.  So we charge that, and you get a tea in the month.  So in each month, it’s different, and it’s kind of themed, so in the summer, it’ll be more light, iced, citrus, you know, little fun, fruitier, and then in the winter, it’s heavier, spicier, maybe just better with heavier food, so it’s kind of, you know, the tea, you don’t know what you’re going to get, but you know that it’s going to be great for what’s happening in March in your life or you’re going to enjoy it in a pitcher in the backyard in the summer in July.  So that’s the main thing, and then they get a sample of something else from our shop, and then they get free shipping on anything else that they want, and then they get just periodic special offers or freebies or just, you know, extras.  Like one thing I do, and my community decides these things.  I don’t always come up with them.  When we make a mistake in the blending room, which happens on occasion, we don’t do it too often thankfully, but if we make a mistake and the tea is still good, it’s just not what somebody ordered or what is supposed to be the recipe, we put them up as Blooper Teas, and they’re like half off, you know, and people, there’s been some ones that people are like you should just sell this, because this is really good.

Tara:  Yeah.

Andy:  You know, like it’s, you know, had lemon peel instead of orange peel or something, so it totally changes it.  So the Tea Club is really the driver, and it’s the driver of our community.  They do gift exchanges every quarter and there’s a secret Facebook group that everybody hangs out in, and so that’s really the core.  Like just such a huge bulk of our revenue comes from that, and not just the subscriptions, but also them buying extras.  You know, they say hey, you know, send me extra this, I’m buying something for my mother-in-law for Mother’s Day.  So that’s the main thing, but then if you go under our website, there’s a shop, there’s an ecommerce shop that has signature blends that we have all year round and then limited edition blends that change throughout the year, and then a small selection of accessories.  So like honey sticks, sugar, tea infusers, that sort of thing.

Tara:  Awesome.  And are you handling all the shipping in-house as well?

Andy:  Yes.

Tara:  Wow.  That’s a lot.  So the subscription models completely fascinate me, because there are so many upsides to it, but there are so many, I wouldn’t say downsides, but there’s so many things to think about when it comes to a subscription model that so many people don’t think about.  The chief one is reducing churn and keeping people in the subscription.  Keeping them happy, keeping them, you know, really glad to see that line item on their credit card every month.

Andy:  That’s right.  That’s right.

Tara:  So what do you do to reduce churn and keep your subscribers around longer?

Andy:  Well, the number one thing that I try to do is create community.  So often, when people have to leave my club, they send me an email that’s like a breakup letter.

Tara:  Awww.

Andy:  And they like begged if they can stay in the Facebook group.  You know, they really feel attached, and so that, I think, is the number one thing.  It’s not just a packet of tea in the mail every month.  It’s tea and you get to share it with these people who also like tea and also who are really interesting people.  So that’s my number one piece of advice.  Get them invested in your success and in what you’re building, because they will stay.  The other thing is very practical, and it’s keeping your costs down.  You know, $10 a month, not too bad.  You know, I have to say I spent and inordinate amount of time on the pricing and all of our stuff, and I remember a previous guest of yours, Carrie Chapin, I was, I said hey, Carrie, look at this spreadsheet again, and she was like, you just need to launch.  Like you’ve been looking at these numbers forever.  You know, like, your numbers are good, go, I’m like, go for it.  But you do need to take that time, especially for a subscription, because it’s very hard to change after the fact, especially if you want to go up.  Like good luck with that.  If nothing else, you have to grandfather the people in or you lose a lot of them, so make sure you spend the time working on that. 

The last thing, and you know, you were talking about the downsides, and this is another downside, besides churn, is logistics.  Subscriptions have logistics because there’s so much going on at any one time.  Like today, today that we’re recording this podcast, we had a shipping day for the club, and Tara asked me to be on the show, and I was like, oh, I don’t know, like that’s our club day, and she’s like well, you know, can you do it like at the end of the day, and I was like sure.  So I’m here, so it’s a sign that our logistics are very good, but it’s something that we work on.

Tara:  Yeah.

Andy:  Because we have to process so many different packages and the variations.  You know, if you have even one variation on your subscription, it makes things twice as complicated.  So you really need to think about that.  So why do … I mention that because the logistics goes into your pricing and it also affects people’s experience, so you want to make sure that you know how you’re going to deliver the subscription so that people don’t get screw ups.  And trust me, we screw up every month.  We always have something that we mess up, and I own it, I make it right with them.  You know, people understand, you know, that it’s a, you know, artisan company, our stuff is made by hand, so people kind of get it, so I have a little leeway, but you gotta really think about that stuff.  Like how’s it going to work?

Tara:  Yeah, amen.  So how are you growing your customer base today?  What are the things that you’re doing that are actually working that’s putting, you know, getting more people on your list and then putting more customers into your club?

Andy:  Yeah.  Email is huge for us.  The email list really does wonders for us, and so we have a … we’ve always done that blog, you know, Plum Deluxe has always had a really great blog, and I now today look at the blog as like a way to get people onto the email.

Tara:  Mmhmm.

Andy:  You know, it’s like we publish a blog so there’s something to put in the emails, and I say that kind of in jest, but I do kind of think that way.  But you know, it’s all part of the thing.  You know, I’m not saying that you should just have a blog just so you can stuff it in a newsletter.  We’re really intentional about what we put in there, and we are very proud of the things that we publish and think of, but it’s a big driver.  It’s a big driver.  It creates SEO, it creates social media, but you know, as far as customer acquisition, you know, I’m kind of in a huge growth phase, doing a lot of investing, and I’m even doing, like, print advertising.

Tara:  Oh, really?

Andy:  Yeah, which I thought would be crazy, but I’m in tea, and there’s a tea magazine, Tea Time, and it drives sales for me.

Tara:  That’s awesome.

Andy:  So, yeah, so I’m really creating a relationship with them.  But you know, one of my best methods is, right now, podcast sponsorships.  Would you believe that?

Tara:  I am hearing that from a lot of people right now, actually.

Andy:  Yeah, I’m really obsessive about tracking my cost per acquisition.

Tara:  Mmhmm.

Andy:  And podcasts is the lowest.

Tara:  That is awesome.  What podcasts are you advertising on?

Andy:  Let’s see, I was just on, there’s a podcast called the Psychic Teachers, and they talk about these kind of esoteric mysteries and interesting things, and I got the best people from that podcast.  I loved it, it was so nice, and the women that run it are so nice.  They’re so kind, and so that was a really fun one.  And that just happened to be one that I had discovered, you know, along the way and was, you know, a listener of.  I think, you know, that’s maybe a great tip is you probably listen to podcasts that might be a great fit.  Some of the ones that I’m looking at this year, I’m trying to think of the names, like I’m doing a couple of crafty ones.

Tara:  Mmhmm.

Andy:  This is where you’ve really got to understand your customer, like what’s in their head.

Tara:  Yeah, because you’re not just targeting tea podcasts, you’re targeting the podcasts where people who drink tea listen, right?

Andy:  Exactly.  Exactly.  Because there’s not that many tea podcasts, and a lot of them don’t have the reach that I need, you know.

Tara:  Of course not.

Andy:  Yeah, I want a … you know, I have a bigger reach than some of them, so that’s, you know, I’m kind of really getting out of my boundaries.  I do some pay-per-click and it’s really expensive, I just haven’t figured out how to make it work.  I do some Facebook ads.  I can’t get my conversions up enough where it works for me.

Tara:  Yeah.

Andy:  But yeah, the sponsorships.  Oh, and I do, like there’s tea festivals, so I do some post cards and sampling for those, and I have really good experiences sponsoring events, like retreats, you know, where my tea can be enjoyed in kind of the experience that it was meant for.  So that’s a big one for me.  So like really small events.  One that I didn’t talk about I guess I should add, too, is word of mouth, and the way I do word of mouth is if I hear about, say, one of my Tea Club members is sharing a lot of their tea at their office, I will send them extra to put in the kitchen in the office.  Or for the Downton Abbey finale …

Tara:  Yeah.

Andy:  You know, we had somebody that was hosting a big shindig, and I was like oh, like let me be involved, like, can I send you some tea, and they were like, oh, of course, and so and it’s totally non-salesy, but it really got people to try it, and I think, you know, really thinking about if you have a physical product, like where would you love it to be?  Where would it be in its natural state, and for me, like a bunch of Downton Abbey watchers having a party dressed in, you know, all the getup, that would be perfect.  So I, most of those opportunities seem to find me, but I am always on the lookout for them.  Like I kind of have my ears raised for those kind of things, and if I see one, I say oh, hey, like, I would, you know, I’m happy to … Because they don’t usually ask, and I think they would maybe feel like it would turn into a salesy thing, but when I say oh, I’d love to just gift, it’s my gift, you know, I’d love to be involved, they’re usually happy to have me.

Tara:  Yeah.  So you’ve already got this group of brand evangelists, and really, you’re just giving them what they need to do the job you need them to do.

Andy:  Yeah, yeah, and I always try to remind them, too, that I’m a resource for them, so if they’re planning something, and they, you know, want to run an idea by me, like what would be a good tea for this, or have you ever tried this.  I kind of try to remind them that I, and I demonstrate that with trust.  Like I don’t … I don’t try to sell them on anything, I just say, oh, you know, my suggestion would be this, and you know, if you want a bag of it to try, you know, I’ll send you one, it’s no problem, but I don’t push it.

Tara:  That’s awesome.  I love that.

Andy:  Yeah.

Tara:  So you’ve a little bit about money when you talked about, you know, really pricing out the club and making sure that your numbers all work.  How do you … I’m sorry … What role does money play in the way you plan for your business?  How … what numbers are you looking at?  What systems are you using to figure out, you know, what you’re going to be up to for the next year?

Andy:  Mm, that’s a good question.  I pay a lot of attention, I mentioned earlier, to my cost per acquisition, so how much it costs me to acquire a customer.  I’m really obsessive about that right now, but I’m in a growth phase and investing a lot, so I need to pay attention, you know, so I don’t lose my shirt, you know, advertising.  As far as like the core, you know, that churn percentage is an important one.  Mine’s very low, and I like to keep it that way.  And then I pay attention to the breakdown of our monthly revenue.  So for us, it’s subscriptions, and then a la carte, it’s what it’s called in our … you know, my spreadsheet or whatever, but people just buying in the shop, and then what percentage of the people who are buying from the shop are new.  So it’s kind of seeing, you know, like what’s … because people often will buy stuff from the shop to try and then become a club member, versus, you know, somebody who’s totally open to the concept becomes a club member first, and then uses, you know, free shipping to try other things.  So there’s kind of two methods.  So I’m really kind of … I see those numbers just to kind of see what’s the trend.  You know, like … and right now, we’ve done a lot to promote our a la carte offerings, because our club has been so successful.  It’s been so successful that it’s like going to blow us out of our new facility that I just moved into in October.  So you know, we really wanted to try to get people to buy, you know, some of our accessories and things that we had made for the store, and I’m seeing our store numbers go up, so I’m checking to make sure that the things that I’m really pushing on social media or in advertisements are moving.

And then the other one is because it drives so much that we have a tool, we use Moonclerk.  I wouldn’t necessarily recommend it to everyone, but it’s what drives our subscriptions, and it’s just a front-end for Stripe, to create … you know, Stripe, which is a payment system, very popular payment system.  It has subscription plans built into it, but you have to have to have some kind of front end.  You know, it’s more like an API or something, like a program.  You know, you can’t just like go in and type in subscriptions on your own, so we use Moonclerk to do that, and I pay a lot of attention to, say, what amount of money is coming in for renewals in the next month.  You know, is there anything funny about that?  Is the number of subscribers that are coming in more or less than before?  And then of course, for me also, because we make everything, I have to really stay on top of the inventory attached to what’s coming in and out.

Tara:  Yeah, I can’t even imagine.  Better you than me, man.

Andy:  It’s not too bad.  Once you have a routine established, it’s not too bad.  But it does take, especially, and this is frank advice for people who have subscriptions, I really think it takes about six months for you to get your head around it, and I tell you what, your first holiday season, you’re going to have your behind handed to you, but you’ll be better for it.  You’re going to be like, wow, we made so much money, and then you think I’ve got to save some of this and buy, like, you know, a hand truck, or new cardboard boxes, or that kind of thing, but it takes a good six months for you to get into a really good place with subscriptions.

Tara:  Yeah, that’s a great benchmark for people to keep in mind, because it is not all … you know, you think, oh great, these people are paying me every single month, but there’s way more to it than that.

Andy:  Yeah.

Tara:  Yeah.  Okay, let’s talk about your team.  Who’s on your team right now?

Andy:  Well, I had a big shift at the beginning of the year.  I went from a lot of people who were specialized, and I kind of shifted direction into having fewer people who were more invested.

Tara:  Hmm.

Andy:  Which seems to be working out for me.  But the main things I have right now is I have one person who handles all of the social media and the marketing, and is kind of like my wingman on product development. So that person has quite a bit of stuff to do. 

Tara:  Yeah.

Andy:  Oh, and she also manages the blog, too, comes under that.  Making sure our writers, because we pay them, you know, making sure the writers send in their stuff, making sure that I know that they need paid, getting it loaded into WordPress, but you know, that, we kind of created this wheelhouse, all these things that go together.  So it’s working.  And then the other person that I really rely on heavily is I have a woman that comes in to help with packing and shipping, particularly the club, because you can be down there a whole day of working on one thing.  Like you know, if the club, for example, if the club is getting, everybody’s getting the same thing for the month, we have a caffeine free option and a caffeinated, so sometimes, there’s more than one thing being made, but if we’re doing like one thing, well, you can just, it’s like you can spend hours making this one recipe, and I can’t do that, because I have so much else to hold and to focus on and I need to be like where are we going to invest for growth, and are we, you know, managing our expenses correctly, and you know, all the CEO things.  So I’m so thankful I have someone down there that’s kind of just stocking, making sure things are ready for ship, and then the bonus is on her way home, she drives by the post office, it’s right there, so she always is dropping off our shipments.

Tara:  Fantastic.

Andy:  So it’s really nice, because often, you know, we … Because tea is light, we are always post office, USPS, and I feel … I feel like I have to buy our new postman, you know, after we moved, like this most splendiferous gift basket because of all the mail that I leave out for him.  It can be crazy sometimes, but whenever she is here, she’s always like what do I need to take with me.  Like you know, what have you not dropped off that needs dropped off.

Tara:  That’s awesome.

Andy:  That’s the core.  Here and there, you know, I have a graphic designer that pops in and works, helps us with the website upgrades, and you know, I might hire someone for advice on pay-per-click or something like that, but the core is really, that’s the core.

Tara:  Nice. 

Andy:  Yeah.

Tara:  That’s great.  So you mentioned there’s a lot on your plate.  There’s a lot that you need to kind of hold in your head and hold in your bandwidth, really.  Do you have a system or a strategy for managing your time?

Andy:  Well, I make sure that everything is in Asana, so that if it’s recurring or if it’s something that I need to do later that I have it, and then I use a print planner, like paper, paper journal, and it’s right here.  I’m trying not to move everything around to make a loud noise, but it has two pages.  I use them, where is this one from, May Designs, M-A-Y, like the month, MayDesigns.com, and this is a really plain journal, and it just has on the left a schedule, so anything, any meetings I have, and I really try to minimize meetings.  I do not need to be in many meetings.  So those are on the left, and then on the right it’s kind of to do list, but I have them in different areas.  So I have like production things that I have to do, like this week, we’re launching something new this month, and so I have I need to make the labels and go down and make sure the recipes are right.  I could give that to somebody else, but we haven’t made it before, so I want to make sure that it’s right.  So I have like production things, but then I have more strategic things.  So it’s like PR, you know, I do a lot of the PR, and then, you know, I have on here checking our paid advertising, making sure that we’re not, you know, spending a fortune, even though we do spend a fortune.  So that’s how I kind of break it down, and so each day, so I have this whole big list here for the week.  I don’t know if I said that.  This is for a week.

Tara:  Okay.

Andy:  And then at the end of the day, I make a little post it note, and I highlight what are the most important things that I need to work on the next day.

Tara:  You are the second guest who has given that particular tip today.

Andy:  And on that list, I include things like working out, so you know, that’s important to me.  I feel 100 times better if I work out, so it’s on the list, because it needs to happen.  So that’s kind of how I do it. It’s kind of loose, and you know, flexible, because that’s how I like it.  But that’s how I do it.

Tara:  That’s awesome.

Andy:  Asana and a paper journal.  And some post its.

Tara:  I think a lot of people can relate to that for sure.  I love the idea of breaking your to do list down into pieces, so you can kind of see, I mean, that’s … We run in Trello as opposed to Asana, and that’s one of the reasons we like Trello is because we can see pieces like that, but I love the idea of having it just in a paper journal as well.

Andy:  Yeah, and I like the pieces because it’s a couple of things.  It reminds me that I need to be both strategic and tactical, and I’m making, you know, I’m aware of how much time I’m spending in each, and then it helps me, for some reason, just having this kind of big squares, it helps me make sure I don’t forget anything, because things can get … I’m one of those people that if it doesn’t get onto a list somewhere, it gets forgotten.

Tara:  Oh yeah.

Andy:  And when I’m writing this down, putting a big square in, you know, strategic … Strategic items, and I’m putting them down, for some reason, the squares like trigger my memory.  It’s like oh, you know, I’ve got to remember to prep for that call with Tara, you know, or I’ve got to do this other thing.  So for me, it’s just that paper and pen moment kind of really gets, make sure it gets the bases covered.

Tara:  Nice.  All right.  So what’s next for you and what’s next for Plum Deluxe?

Andy:  Well, we’re upgrading our packaging this year.  We’re trying to go 100% recyclable.

Tara:  Oh, cool.

Andy:  Yeah, and just the packaging that we have is fine, but we want to just make it even better.  You know, like we don’t have any tea tins, we only have the smaller packages, so upgrading our packaging is on the list for this year, and this is another great reminder for people.  It’s like, you know, if you have things that are just okay, like sometimes they can be just okay for a whole year or two.  You know, like our packaging is fine. We’re ready now to make it truly like what we want it to be, and you know, that could have taken another year.  It’s totally fine.  The other thing is we have some really great, new products coming online.  So we mostly have flavored teas, you know, the essential oils, you know, vanilla or citrus or fruit, and so we’re launching, we’re calling them Royale Teas, and they’re unflavored blends.

Tara:  Oh, nice.

Andy:  So we’re doing a small selection.  Our club will still primarily be, you know, the flavored ones, which I see as kind of more fun and interesting and different, but we’ll have this new core line-up of something that appeals to, you know, another segment of tea drinkers, and it’s something we’ve always wanted to do, but it’s just not, it’s just one of the things that’s like not been on the list yet.  So we’re excited that that’s on the list, because that’s a big thing, and interestingly enough, it … Getting the recipes right more difficult, because there’s like nothing to hide behind.

Tara:  Right.

Andy:  You know.  It’s like, oh, you know, throw in a little more orange peel and a little extra vanilla, that’ll be fine.  Not that we do that often, but you know, if it’s just a very simple black or green tea, you really got to get it right, because there’s just nothing in between you and that taste bud, so I feel like we’ve done a really good job, so I’m excited about that.

Tara:  That sounds awesome.  Well, Andy Hayes, thank you so much for joining me.  It’s been really interesting seeing inside Plum Deluxe.

Andy:  Thanks.  Thanks for letting me share.  I appreciate it.

Tara:  Absolutely.  You can find Andy and the Tea Club at PlumDeluxe.com. 

Next time, we’ll talk to Nathan Berry, founder of ConvertKit, about making the decision to pursue growing ConvertKit full-time while putting his lucrative digital products business on the back burner, the direct sales strategy he used to woo influencers to his product, and what he’s learned about building a Software as a Service venture.

What can boost your credibility, woo new clients, and bring in more cash for your business, publishing a book.  Luckily, you don’t have to wait for a big name publisher to tap you on the shoulder.  In my brand new CreativeLive class, I’ll guide you through writing and publishing your book faster than you thought possible.  Find it at CreativeLive.com/eBook.

That’s it for this week’s episode of Profit. Power. Pursuit.  You can download other episodes of this podcast and subscribe in the iTunes store.  If you enjoy what you heard, we appreciate your reviews and recommendations, because they help us reach as many emerging entrepreneurs as possible.  Our theme song was written by Daniel Peterson who also edited this episode.  Our audio engineer was Jaime Blake.  This episode was produced by Elizabeth Madariaga.  You can catch up on older episodes in the iTunes store, where new episodes are added every week, and you can learn more by going to CreativeLive.com.