Sramana Mitra: One of the results of this increased competition is that Google keyword pricing goes up significantly.
Ricky Joshi: Absolutely.
Sramana Mitra: You’re a high-ticket item, so I suppose you have lots of headroom to spend on customer acquisition. Still, everybody in that space does have that kind of headroom, so the bidding war must be tremendous.
Ricky Joshi: It comes back to building the business and being an early mover. Because we were early, we were able to test and learn what worked. We were able to refine our targeting and really refine our campaigns to a point of efficiency that I think would be very difficult for a new entrant without five or six years of data to perform very well. It would take two to three years of learning to really catch up. Part of the evidence there in the marketing sophistication we’ve been able to engender over the last few years is the fact that we’ve launched two new brands.
One is Loom & Leaf that was launched in 2015. Another brand, Zen Haven, which is an all-natural latex bed launched in May 2016. Those have been phenomenally successful. Our Midas touch has been a lot of sophistication that we’ve been able to grow into. Marketing sophistication and approaching the market in a very different way have been a perfect mix for growth in our business.
Sramana Mitra: You’re winning not just because of bidding. You’re winning because you have a differentiated product and possibly some other marketing strategy.
Ricky Joshi: 100%. We offer better service, better product, and we have more sophisticated marketing.
Sramana Mitra: What is the most sophisticated marketing that you do?
Ricky Joshi: Really focusing on targeting and getting really nuanced on targeting is the key. It all comes down to finding the right customer – finding someone who would like a luxury product in your demographic category and identifying and knowing who that customer is. We excel in doing a deep analysis of data to know who would be an ideal customer and finding that customer. I think a lot of companies who have a lot of funding or have a less experienced team go after millennials. It’s what’s in. We know that there are many consumers who are in their 40’s who are our target market. We make sure that we cater to that market.
Sramana Mitra: You’ve done this all organically with no external financing other than your own personal money, right?
Ron Rudzin: Correct.
Sramana Mitra: Do you want to add anything? Is there anything else that you want to highlight in the story?
Ron Rudzin: I’d just like to highlight one thing. At the end of the day, we’re very proud of the three products that are out there. You have to have the right product. We believed in a core philosophy. You asked about how we market to our specific customer. If you look at our website, we make sure that all of our room setting speaks to our customer.
We back it up with 24/7 service. Whatever the issue is, we take care of it. We’ve become one of the best reviewed mattresses in the country. We’re one of the top four marketers in the mattress space. More importantly, if you’re not taking care of your customers, you’re going to lose. I believe the Internet has done a great thing for consumers. If you’re selling, you have to perform.
Sramana Mitra: Great. Thank you for your time.