How a Mattress Startup went from 3 sales to $100,000/month in 3 months
I found this post online from a marketer/SEO who took a fledgling mattress startup, and applied some crafty advertising and targeted ads to the tune of helping explode the sales of the startup that he worked for.
Some of my favorite takeaways are that he targeted his competitor’s names in google adwords, and then had a landing page where he compared his product to theirs. This is genius, because he gets to ride their coattails, and when it comes to mattresses, there are a lot of unsure customers, that will obsess over comparisons. (I know, because I was in that spot a few years ago!)
I also liked his affiliate strategy of sending people with big enough audiences a free bed for a review. And I loved the part about not ignoring local PR. This was a great piece of learning, I hope you enjoy it as much as I did.
Here’s the content:
“I recently helped one of my clients get his online mattress startup from 3 sales, to nearly $100,000/mo…less than 3 full months into the project. Our growth is now on its way to multi-million $ year 1 revenue. I wanted to share some takeaways & strategies that helped us succeed on a bootstrap budget in a highly competitive industry. Pre-apologies for the novel (I like to write) – but hopefully you can at least skim through.
For context – I’m 26 years old, currently working as a freelance SEO & digital marketing consultant. For 6 years prior to doing this, I was a full-time analyst/operations specialist for a Private Equity investment firm – where I learned a ton and got a lot of experience launching businesses from the investor/operator side.
A few months back, a college buddy approached me about a startup he recently launched with his fiance’s father. The company was called “The Dromma Bed” – it was an online “Bed-in-a-Box” memory foam mattress company, similar to Casper. If you’re not familiar with this industry…its been blowing up over the last year or so. The idea is to sell a single high-quality bed design exclusively online, roll-pack it in a box, and ship it directly from the manufacturer to consumer. Cutting out the middle distributors and brick-&-mortar markup allows them to sell much higher quality beds for a much lower price than regular mattress stores.
When he initially approached me the company had only sold a few beds – all to friends & family. They had been paying another marketing company to run Google ads that didn’t produce any results after several months and several thousand dollars spent. So he asked me if I could help them overhaul their digital strategy.
I was skeptical about accepting the project at first. All they really had so far was the mattress design, contracted factories/sourcing channels, and a WordPress eCommerce site. They were self-funded with a limited budget. No big email list or social media following.
Aside from the limitations of the actual business – the competition within the mattress industry is fierce. Its typically thought of an unbreakable Oligopoly, dominated by just a few massive companies. Casper managed to break in with a disruptive business model and the advantage of being the first mover – but they had just secured $70 Million Dollars in VC funding. Several other early competitors with similar products had also secured big-money funding.
I honestly had no idea if we could find a large enough gap in the market for them to grow into -and I feared their product wasn’t unique enough to carve out their own niche. If there was no gap – there was no business. I didn’t want to waste my time on a project doomed from the start.
However, after he explained to me more about the product and company, I could see there was actually something to it.
He told me about the extensive design process they went through with top industry experts. Some of the big differentiators were that their bed had more advanced features, and used higher quality foams & materials than their competitors. Their foams were eco friendly -> most of the competitors weren’t. . They offered multiple firmness levels, while their competitors only had one. And the most important thing of all to me was that he honestly believed their bed was far more comfortable than every similar bed out there they’d tested.
Aside from the product design, the company’s commitment to operating an ethical business model was a big brand differentiator in that industry.
A primary reason they started the company was to help support the manufacturing industry around their hometown in North Carolina – which had been decimated by Asian outsourcing. They made a pledge to source their product with 100% U.S.-made materials and use local production (Their hometown was fortunately home to some of the oldest foam-manufacturers in the country). They refused to budge on this even though it would have been cheaper to outsource.
It wasn’t necessarily revolutionary … but they had a better product design than their competitors, a good story, and a strong set of company values. So I agreed to the project, and got to work.
My first order of business (after disabling the useless Adwords program from the other company), was tweaking the website – refining the copy and layout to reinforce the sales funnel.
Once the website was updated, I planned out the first Facebook ad. I set it up to run without any targeting initially. Within just a few hours, we had made our first online sale.
That first month using only Facebook Ads as pretty much our only channel (with some small experiments in Adwords), we did ~$20,000. The second month, we added additional sales channels and reached nearly $100k. We’re currently well on track way to well over $1 million year one revenue. Here are some general advice/takeaways & specific initiatives that lead to the success of this project (as well as others I’ve worked on) – which can be applied to other startups working on a bootstrap budget.
Our basic strategy was to focus on 2-3 paid channels, and do them well: We used 3 primary marketing channels to get to this point – Facebook Ads, Google Adwords, & Affiliate Marketing. We decided to go with the channels we knew best, and put all of our effort into optimizing them rather than spread ourselves too thin. We spent very little effort on any organic social media (which I explain a bit farther down). Now that we know what works, we’ve recently been expanding into new channels.
Facebook Ads have been our primary bread and butter. The first month we spent ~$1,000 on testing various campaigns, then narrowed it down to just 2 of the top performing ads – and let them run continuously. We found our most successful conversions actually came from keeping the targeting fairly broad – as our market is fairly spread-out and undefined. The key here was using a compelling image –and compelling ad copy.
Other than running some promotion-specific variations on occasion and some minor tweaks, we really haven’t changed our original performing ad creative much at all. If it aint broke, why fix it?
Bid on Competitor’s Search Terms!: SERP space for the primary keywords around the mattress industry was insanely competitive – resulting in extremely high CPC for prime positioning (I’m talking $15+ per click!). That is why the original marketing company’s campaigns weren’t getting any results.
We were most successful running our ads on the brand keywords of mid-level competitors – and creating customized landing pages directly comparing our beds to that competitor’s beds. This allowed us to get way more bang for our advertising buck. We let our better-funded competitors spend the money to get people to perform a search…then all we needed to do is convince those people that our bed is better. Using customized landing pages for each ad resulted in far more conversions than homepage URL ads.
** Our first sales were the toughest to get because people obviously wanted to see reviews from other customers before they purchased an $800 bed. We found there are tons of blogs and mattress review sites out there who would post a review of our mattress for free, and also post an affiliate link on their site to drive customers to our store. The only up front cost was the cost of a bed…and it more than pays off in every case. We’ve also been experimenting with the Share-A-Sale platform to manage a larger scale affiliate program…this channel takes a lot of effort to manage, but we’ve seen moderate success with it.
Public Relations…Don’t Discount the Value of Local PR!:
From the beginning I knew press write-ups from big publications would be very hard to get as a late-entry company. So rather than wasting time pandering to mainstream content producers – we put some effort into reaching out to smaller newspapers & magazines. Articles we had run in tiny local newspapers regularly resulted in several thousand dollars in sales. Valuable lesson here…don’t neglect local PR!
We implemented a friend referral program last month, and have seen decent results. There is no better marketing than word-of-mouth. The good thing about these programs is they’re incredibly easy to set up with pre-built software solutions. And once you set it up, you can let it run and more or less forget it (aside from the occasional maintenance). Downside is that its a rather unpredictable as a sales channel. Our program offers: “refer a frien dand they get a $75 discount, you get $50 cash”. Obviously our margins/price point were high enough to support those numbers, but I’ve implemented refer-a-friend campaigns with rewards as small as $5.
Takeaway: The number of options for attracting users to your site can be overwhelming. Don’t waste your time trying to implement every new marketing gimmick or technology that pops up…even if everybody says ‘it’s the next big thing”. In the early stages if you spread your brain power and marketing dollars too thin across too many channels, none of them will perform.
Set a Realistic Marketing Budget
Some people working on their first ecommerce businesses dramatically underestimate the budget they need for digital marketing. Your budget should be directly correlated to your targeted revenue-especially in the early stages. You can’t go into it assuming your marketing campaign will net 300-400% ROI. Adwords reports that their average campaign nets about $2 Revenue : $1 Spend – and that’s highly variable. That means if you need to make $10,000 in revenue on a campaign, the minimum you should plan to spend is $5,000…and you should budget even more for wiggle room.
Never give up your core values for the bottom line
When I first heard the founders were only open to sourcing locally– I admired their integrity, but the Private Equity guy in me winced. In the PE industry, dealing with other people’s money … everything is about the bottom line.
But during the course of this project and others I’ve worked on, I’ve seen that the companies’ commitment to values has been one of the biggest things that strengthen the brand, and actually ends up driving conversions. Customers really do appreciate things like local sourcing, and knowing we use safe, eco-friendly materials – and sometimes thats the difference between buying from us and a better-known competitor. Sticking to your guns on ethical business practices might sometimes cost you slightly more money in the short term, but you’ll end up benefiting with a better performing brand in the long run.
You don’t need to dump a ton money on your website pre-launch
For an ecommerce company, your website needs to be decent. But if you’re on a budget – it doesn’t need to win a webby award for you to start driving revenue. The most important thing about your site is good copy, an efficient checkout process, and making sure you have a strong sales funnel. Don’t waste too much time trying to implement every bell and whistle at first. The Dromma site is extremely basic, and certainly not the prettiest, but it got us to where we needed so far. Now we’re planning to upgrade to a better site as we have more capital to do so.
Real consumer behavior trumps a good sales pitch
Most of our competitors were running on the business model & sales pitch of selling “One bed suits all”. They offered one bed design, with no customization options. However, the actual researched we did showed that one bed doesn’t suit all – real people have preferences in firmness. Selling “one perfect mattress” is a great sales pitch, but it didn’t match consumer buying habits. We found that many customers from our competitors were returning beds because they were too soft or too hard – they were bouncing around to multiple companies trying to find the exact right fit. So one of the biggest competitive advantages we’ve capitalized on is offering multiple firmness levels. If the first bed a customer tries doesn’t work, we swap it out for the other free of charge.
Takeaway: make sure your sales pitch matches with actual consumer behavior. Don’t just go off “gut instinct” what you think people want to hear…go off what they actually want to buy & use.
If something isn’t working, cut your losses as soon as possible
At one point we tried migrating from WordPress to Shopify. We put a significant amount of time and effort into getting it going. But once we launched, we found an unforeseen problem with it that would take a lot of time & money to fix. Rather than letting our pride get the best of us and stubbornly pushing forward, we cut our losses, and reverted back to the original system. It was disappointing, but we didn’t waste any more time or money than need be.
Takeaway: If something isn’t working out, cut your losses sooner than later. Don’t try to force something to work just because you’ve put a lot of effort into it.
Don’t get lost in targeting (at first)
When we first launched we had expectations about our primary demographic. Based on our research, we expected our primary market to be young millennials who are more likely to buy something from a new industry. However, I still decided to run our ads with very broad targeting with no age limits so we could see how the older . in their mid 30s to late 50s were buying beds. We wouldn’t have discovered this
Takeaway: Do your initial demographic research, but unless you have a very niche product, don’t target your ads too narrowly until you 100% confirm that’s who will be most interested in your product.
Good Copy Is Essential
I managed to start driving initial sales just by making some adjustments to the on-site copy. We’ve also seen measureable improvements in conversion rates from just making minor text tweaks. The most common issue I come across with ecommerce startups is that they launch their website with extremely shoddy copy. A lot of these guys are great entrepreneurs – but terrible sales copy writers.
Takeaway: Copy is king – you won’t see nearly the sales you could if its not up to snuff. Don’t be afraid to get outside help to write for you.
Traditional Organic Social Media is nearly dead – don’t waste too much time on it
We spent very little time with organic social. And until we get enough of – its not a priority for us.
Facebook essentially killed traditional social media marketing when they updated their algorithm to drastically limit organic reach potential to 1-2 percent of your audience. However, many companies are still dumping countless man-hours trying to grow their pages and get that “free traffic”. Unfortunately, no matter how much time & effort they put into it – most will not see the results they want. Twitter is hit or miss. And Instagram is great for awareness in certain niches – but its extremely hard to drive actual conversions from.
Takeaway: Don’t waste too much time on organic social unless it’s essential for your niche.
SEO shouldn’t be a major factor at first – especially in a heavily competitive industry
I’m saying this as an experienced SEO consultant.
Organic search is a slow-growth channel
– I don’t care how much link-building you do or structured data you enter – if you’re in a competitive industry with well established companies, you will have a very difficult time ranking for the keywords that will drive sales. We have bigger fish to fry right now than trying to get ranked for nearly impossible search terms. We’ll shift our focus to SEO once we get some breathing room.
The only real effort we’ve done with SEO so far is making sure we rank for our own keywords. And making sure we appear correctly in search.
With limited resources, your initial focus with SEO should be making sure your site is solid from a technical standpoint, ensuring that you rank for your own brand keywords names – and making sure your website displays properly on the SERP. Be aware of the keywords you want to rank for over time, and optimize as much as you can…but don’t put too much work into it in the very early stages.
Product First, Brand Second
The success of many of our competitors came from riding on the initial wave of being a “cool new online company” in a trendy industry. But they were so focused on building a “sexy brand” as quickly as possible – they didn’t care enough about the actual product they were selling. That’s why now, many of the competitor’s sales trends are flattening out, while ours continue to grow.
We have been successful because the founders put so much effort into creating a great product. That has lead to many happy customers and subsequently many word-of-mouth referral sales. Great brands can be toppled by selling shitty products. Always make sure you’re putting the thing you’re selling ahead of the brand that’s selling it.
Ignore the competition when setting your initial goals This is an important one. We get inundated by the media with these huge startup success stories, and feel our own smaller accomplishments are inadequate in comparison. . My advice is this – Ignore the competition’s achievements, focus on your own realistic goals.
Casper had done $30 Million in sales their first year. Our next biggest competitor did $15 Million. But we were in a different position than those companies – and I knew if we had gone in trying to emulate those numbers, we were setting ourselves up for failure. So one of the first things I did was talk to the founders about realistic expectations for revenue. We agreed: Coming from 0 sales, If we could get to the point where we were selling 1-2 bed per day, we would consider it a big success. Planning around an achievable goal allowed us to better focus our marketing dollars, and scale the business in a controlled fashion.
You Don’t Have To Be A First Mover To Be Successful – Especially if you’re on a tight budget
So many would-be entrepreneurs (myself included) have been dissuaded from pursuing a great idea when they realize it’s already been done before. But ask yourself this – how many pure monopolies still exist out there? As a startup on a limited budget, you’re much more likely to be successful coming “fashionably late to the party”.
Our ability to break into the market quickly was the result of our ability to research our competitors, and improve on their strategies and product offerings. We could see how customers responded to their products, what worked, and what didn’t.
Being the first mover certainly has its advantages. It’s also thought of as “sexier” and more exciting than coming late into a trending market. But being first is generally much riskier and much more expensive. They have to make all the mistakes themselves…and also spend the money & effort to grow a market from scratch.
Be aware of your competition – but don’t let it scare you off entirely.
Your Product Differentiation Doesn’t Have To Be Revolutionary To Succeed!
Following up with the previous point, your idea doesn’t have to be some sort of revolutionary breakthrough for your business to do well. There are actually many advantages to launching a business with already proven and tested products & technologies.
For Dromma, most of the features in the bed can be found on other beds out there – but none of the competitors offered all of those features in a single design. The technologies have been around for a long time – we just figured out how to apply them in a new way. That approach is far less risky than trying to launch something new and untested.
The founders also made sure Dromma was more comfortable, and used the highest quality materials possible. Along with the strong values, that was enough. They didn’t drain all of their resources trying to re-invent the wheel.
Anyway, I’m super excited about the success of this project, and where we’re going to grow from here. Just hope everybody here realizes that success is possible in almost any industry, even on a limited budget.