How To Dominate Affiliate Marketing

0:00Every day there's a company getting acquired or getting funding, and we've known from the beginning that that's not the path we want to take. Hey, what's going on? I'm your host, Shuang Esther Shan, and welcome to Shopify Masters, your companion for starting and building a business. From mixing formulas in a salon to landing on Sephora's shelves, our next guest turned a hairstylist dream into a multi-million dollar clean beauty empire. Today, we are joined by Hilary Markinson of Reverie, the hair care brand that proved you don't need to raise funds to make waves in the industry. Just an unwavering commitment to quality and a knack for turning hairdressers into affiliates.

0:47Hilary, welcome to the show. Thank you for having me on. It's a pleasure to be here. So happy to have you. I love the story of Reverie because it started in the salon. Your partner, Garrett, has so much experience within the hair industry. And this is something that was primarily salon focus and then transitioned into a consumer brand. Talk to us about that journey. Yeah, I think what's unique about Reverie is that it started as a passion project, not intending to really grow into what it is today. The line was born from Garrett's desire to make something that fit his aesthetic and his client's needs behind the chair.

1:33And then from that, we really saw a white space in the industry, especially in clean hair care, because that wasn't a thing 14 years ago. There were no brands forefront doing what we're doing today. So taking that, just really learning from his clients and then developing product after product very organically and slowly until we came 14 years and we have 10 products and we're still just developing very intentionally. Very organic growth. It's all self-funded, bootstrapped. And you also came into the business very naturally. I feel like you guys are so well balanced, him being the creative and you come in with all these skill sets for operations and finances.

2:21Talk to us about joining the company and also looking for opportunities for scale and growing the brand in a way that you're both comfortable with. Yeah, I did not have aspirations to be an entrepreneur. That was not where I was going. Coming from an interior design background, I had a lot of design and then retail sales later. And right before our wedding, we were launching in Sephora the next year. And I remember Garrett said, I can't do this. I need more help. And so that's when I left my career in design and decided to join Reverie. And it really, it was a journey figuring out where I fit because for the five years prior, Garrett had been doing it pretty much on his own.

3:12Just, yeah, developing the products and also working in his hair salon, doing his clients, doing sales and just networking. So when I came on, we really developed a larger vision for the brand of where we wanted to take it, more of a strategic product launch schedule. When we had an idea, it was like, okay, we can't just throw this idea out into the world. We have to have a timeline for it and get in front of our retailers and have a schedule. So all of that was, it was a learning curve for us because I had no, I had no DTC experience. I had no experience building a brand. I had always worked for larger corporations, which gave me skills in different ways, but not necessarily prepared for working on my own.

4:02But I think that's also very valuable, right? And speaking to that partnership with Sephora, it's such a game changer for the business. Talk to us about that transition, right? Because previously the brand was beloved by hairstylists, by salon owners, and they had the chance to talk to clients one-on-one to share about the brand. And now you are faced with pitching to Sephora and establishing that partnership so that Sephora can be the channel to communicate to consumers on your behalf. Yeah. Sephora came to us. We did not seek them out. We were such a small brand that that wasn't, that was a goal.

4:47It was an aspiration, but we, we thought we were 10 years off from that still. So when they approached us, we originally said, I don't, we're not ready. We can't do this. And six months later, they came back and said, are you ready yet? And we finally said, okay, we can do it. And we came on as their first clean haircare brand. We helped build out their clean section of what Clean at Sephora is known today and worked with them on refining our brand messaging and just really getting clear on how we can capture their consumer because it was a completely different audience than what we were talking to before.

5:24And I think there's also a big hurdle of upscaling your inventory, managing your cash flow. When you're working with salons, you can grow at a rate where maybe it feels more manageable. So how did you approach scaling to meet Sephora at where they are? Time. It took us six months. The way we manufacture our products with the type of ingredients we use and how we harvest from small family farms is also a little bit challenging to scale quickly. So it took us about six months to get the product inventory built up and ready to launch with Sephora. Cashflow, yes, being a bootstrapped brand, that's always a concern.

6:12But we had, because we're so intentional about those launches and about how we spent our money and we weren't doing any paid ads, social media was kind of a thing we were starting to dabble in, but it wasn't what it is today. We had, luckily, a pretty good working capital to launch with them. For some new founders who might be entering into a partnership with a retailer, what are some things you hope they prep themselves for when taking on such a big PO or a big partnership? really talk with your buyer about what the timeline looks like and what the support after launch looks like that that was a little bit of a learning curve for us of how much the retailers the bigger retailers were going to require from us after launch and I would say either if you're bootstrapped get a line of credit from your bank and work off of that working capital rather than seeking investment from the beginning if that's not the path you want to take and just get clear on those responsibilities that are going to be required of you after you launch.

7:29So you know the amount of investment that you're going to need for the long term, not just that initial PO to get you launched in the stores. Because once you enter into the stores, you also have in a way have to drive traffic in to check out your brand. So I think there's layers of challenges that one might not think about when they first get that order and is excited about it. Right. That's what blindsided us. We were like, oh, okay. We were so excited. We were in Sephora and we initially launched on .com and then they rolled us out to 300 stores. And that was where we were like, okay. So now we We're seeing the bigger picture of how much working capital we need to support this store, not just in building out your store displays.

8:20And then you have to have in-store support to train all the cast members. And those team members are going in once a month. And then the extra inventory to support the stores in addition to dot-com. Yeah, it's worth it if that's the route you want to take. definitely get the whole picture before you commit to it. Yeah, it definitely sounds like there's so many different components than one might anticipate. Another huge aspect of the success for Reverie that we talked about is the fact that it's so strongly backed by the hairdressers community, the stylists and the artists. How did you tap into to that network to support you while you were growing?

9:07That came really organically from Garrett's career in hair. He's been doing hair for over 20 years. And as an artist, he's really well-respected in the hair community. And then when he started launching product and products into the world, then more hairdressers came forward and said, wow, I respect what you're doing. And therefore that gives credit to your brand that you're launching. so we have a really really strong network of hairdressers and a lot of affiliates that have signed on and I think that is a unique positioning for us within the hair care community because there are a lot of amazing hair care brands but not a lot that span through salons into consumer and I think that's so special right because new businesses today when they think about affiliate program.

9:58They think about content creators, but what's special about Reverie is that the affiliates are artists themselves, hairdressers themselves. So they have this expertise in addition to this community that they're also helping you drive. How did you start to set up an affiliate program that would work for them? It happened during COVID when all of the salons shut down, especially in California where we're based. For eight months, hairdressers could not work in the salons or do house calls. It was actually illegal for them. I remember those days. Yes. Yeah. It was wild. So Garrett looking to his community and just hearing what other hairdressers were going through decided we need to do something quickly to bring extra revenue to these people who have supported us for years.

10:54And out of that came our affiliate program. And it's just, it's been growing ever since then. A lot of salons want to do a hybrid model of affiliate and not carry so much retail on their shelves. So it's added a lot of flexibility for our partners. And it's remarkable to hear that it's something grown out of necessity during COVID, but it's still a very robust and thriving community that you still have today. How did you transition out of COVID to make sure that this program is something that people still wanted to be a part of? Luckily, we saw the rise of other brands doing affiliate programs too.

11:33I think, and especially in beauty, affiliate marketing has become massive. So that's really helped us keep the program and grow it. And then we onboard new salons to it. We onboard creators to our affiliate program. Anybody who we identify as a fan of the brand, we will reach out and ask them if they want to join our affiliate program to draw an extra revenue stream for themselves while they're supporting our brand. If someone's thinking about setting up a program, what would you tell them to think about that might be a little surprising? I would say communication with your affiliates and really helping them understand if they are trying to use it as a sales channel.

12:18As a lot of our hairdressers are, they're using it as an additional sales channel for them. You have to teach them how to use it almost. Not everybody comes, they're artists. They don't come with a sales background or they're not necessarily interested in that aspect of the business. So really teaching them how to use the channel to their advantage. And do you feel like because you have to balance so many different channels with Sephora, I bet it's a different structure for margins. And then also for affiliates, you have to reward those within the community as well as managing D2C. How are you looking at these different channels today to make sure that they're all taken care of in the way that the channel needs?

13:07Our D2C, we approach with our direct brand voice. We own those customers. We have really dialed into our funnels via email. That's one thing over the last few years that I've spent a lot of time developing that communication directly with our customers. So they are welcomed into the world of Reverie and they really understand what we're doing and why we're here for them. as far as Sephora and our other retailers credo we lean into the retailer and ask them what they need from us and oftentimes it's completely different than what we're doing on our own channels and it because the consumers are different so we tailor the content the just how we support them completely different than we do our own and then our affiliates it's more like talking to a friend.

14:00I really write like a text-based email and they're talking directly with me and a lot of them write back and they're asking questions or they're like, hey, I saw that video you posted on Instagram. What products were you using? How did you do that thing with the waves in your hair? So that's a more personal channel. It sounds like you found the right balance with managing the different channels. wanted to touch on the website because it is so special to us as well. And there's so many things you can do to optimize that experience when people are shopping online. And this is also, I believe the third iteration of the website.

14:45Yeah. What have you learned each time around when you're trying to perfect the online experience? I think the biggest thing we have learned, and this goes for the brand as a whole is just Once we hit about seven years old, it was really stepping away from the brand being so personally tied to us and our aesthetic and our voice and finding the brand's footing outside of us. and the website is the same thing. When we launched with Shopify, we made the site very much design focused and everything that we would want to see when we landed on a website and sort of let the UX fall to the side. And with every iteration, we've made it a bit better for the customer.

15:38Because there is that balance as well, the tension between building a beautiful editorialized site and also optimizing it for shopping and also just the experience overall. Right. We had to pull back and realize we're not Bottega Veneta and that the consumer needs a little more education and thoughtfulness out of what we're putting on the website to make it easier for them to navigate and learn and not just an editorial website. We actually have a fourth iteration coming out very soon. So for the fourth iteration, then, what are you thinking about to enhance that shopping experience even more?

16:20We are really diving into the homepage and bringing our best sellers forward. We're refining copy, taking out a lot of the noise on the site that pages that people wouldn't typically visit. and moving those somewhere else on the site, but not putting them in our navigation and bringing even more information into the product pages and just a simpler navigation. Okay. Makes a lot of sense. And then have you thought about also just looking at the conversion of the site as well and thinking about that while you're optimizing it for the utility of the site as well. Absolutely. That's what drove us to do this new update we're doing.

17:09We had a company called Audit come in and completely go through the site, tear into it and give us all the tips on here's what we'd love to see. Here's what you're doing. Here's how you can maximize the conversion rate doing just very simple things. But because we're so close to the brand, we couldn't see it. Yeah, talk to us about that. Were there changes that you thought for areas of the website were fine, but then it surprised you and it led to a big change for the site? yeah like our cart they they showed us our current cart and they had just really simple if you just put um at the bottom of the cart a couple use the app upsell and put a few things in there to suggest pairings with the customer then you're giving the customer an easier access to your products and also it's a convenience factor so the chance that they're going to be like oh i didn't know those two worked really well together i didn't see that you had a brush yeah I'm going to add that to my cart and a couple of tweaks as far as like the free shipping call out in the cart just really simple things that we didn't think of that's so smart because I envision those upsell cart reminders kind of like the aisle before checkout at Sephora where there's those really tempting minis or new products that are like oh okay I might pick that up as well Yes, it's the afterthoughts, the things you didn't know you wanted, but now you do.

18:41So lots of changes you're making for the website and coming off of the site, there's also so many channels for social media. It's a place for the salon owners, affiliates, hairdressers, as well as customers to gather. How are you looking after those channels? I think social is something, it's always going to be a moving target for us to figure out what exactly works. One of our brand pillars is education. And because we are expert led and we have that resource, that's what we put to the forefront. And when you educate a customer on a product and teach them something, nine times out of 10, you're going to convert that customer and build them into a lifelong customer because now you have trust with them.

19:29You're giving them education. They know there's an expert behind the brand. And so that leads our retention, our customer retention rates are huge because of that. And I think growing outside of the Reverie social channels, there's also so much social content created by experts within the affiliate program. So how do you build on top of that to grow the momentum even more? We're figuring that out. Partnerships are new for us. and tapping into our hairdresser network changes. We have had in the past a core group of hairdressers that created content around the products, but there is a constant flow coming through of hairdresser content.

20:16So we're still trying to figure that out still for ourselves. And I like the fact that you take the growth in at a rate that both of you guys are comfortable with, And I think that's why Reverie has been able to grow sustainably year over year. I believe it's 20 % year over year. Also, it's still not taking outside funding. So I think that's something really hard for companies to achieve for such a long time. For founders who are trying to build a good financial foundation for themselves, what's your advice to make sure that they can be profitable? they can grow sustainably in a manageable way?

21:00Start small and make sure it's something you really want to do for the long term. Because if you have passion behind a business, it's going to be infinitely easier for you and easier for you to stick with it and not want to throw in the towel versus if you start a business with just identifying a white space, but there's no passion behind it. And we also have our own goals. Like we're not looking, there's every day there's a company getting acquired or getting funding. And we've known from the beginning that that's not the path we want to take. So it helps to be very clear and stick to those goals and not let the outside noise influence where you take your brand.

21:48If your idea is to get funding out the gate and build a huge brand, that's amazing. That's not what we wanted. So we every day remind ourselves, that's not what we're looking for. And this is how we do it here. Because even at the top, when you mentioned the brand has been running for close to 15 years, and you've only launched 10 products in totality up to this point. So when you're thinking about the business and thinking about new products, do you make sure that the new expansion makes sense, fits into the business, and it also is a profitable addition and it's going to help the growth in the rate that you're comfortable with as well?

22:33Oh, absolutely. We don't put anything out into the world that we don't need ourselves and identify a need within our customers. every product like for instance our rake styling balm that was a product that Garrett created personally for himself because he couldn't find a hair balm that he liked they were all waxy pomades or they didn't rinse off his hands the way he wanted or they they left a film on his hair so that's very personal and a lot of the products start that way our exfoliating shampoo was something that I wanted because I didn't want to use a salt-based shampoo. And I think when you create from a place of personal need and also identify within your community a need and in the industry a need, then there's no way the product isn't going to be successful.

23:27Because when I hear need also translates to demand. So in a way, you are finding those opportunities and you've kind of already found market product fit before you expand. Yes. Because of the hairdresser community we have, I want to say we're in maybe a thousand salons across the country at this point. We have a really unique advantage of speaking to them. And when you amplify how many hairdressers that is times how many clients they see a month, now you have a lot of data that you're gathering, right? Because they're talking to their clients about what they're looking for. The hairdressers have input so that the community in which we're gathering data from is large.

24:15So if there's not something that I'm personally seeing or Garrett's personally seeing, chances are they've come to us and asked for it already. That's incredible. And do you also involve the community when you're, let's say, having a new product idea and you're iterating on the formula, do they get involved in perhaps helping with the iteration? That's newer for us. And that's part of the expanding the brand beyond ourselves and our personalities. The last two product launches, we have involved our community and sent out samples and received feedback. So that's something we're going to continue because it was really valuable for us.

24:56Yeah, that's amazing. That's a built-in testing, built-in survey group. And then in case listeners didn't pick up on it, one other really amazing factor is that Garrett and yourself are life and business partners. And I love chatting with founders about this because, you know, the advice is telling founders not to go into business with family or friends. I love to just empower those to think about actually doing that and starting something with a loved one. It's been the most fun journey because we're doing it together. I think if we were doing it with anybody else, it wouldn't be what it is today.

25:42And the brand wouldn't be what it is today because every piece of the brand is infused with us. and the scents we create are usually based off travels we've had together and gotten inspiration from a certain location we've gone to or an experience we had. That's, yeah, I say do it. As long as you clearly identify your roles and come together when you need to, it's really a beautiful, beautiful thing. And it sounds like even though you're looking after operations and the business side of things. You also get involved in the creatives because you're talking about the sense that you get to also be a part of and also help create.

26:26Yeah. I mean, how could we not? We live together. We do everything together. So when the product's in development, I would say probably 85 % of our customer demographic is women. So of course, I'm testing the products and giving feedback from that lens. And that helps, helps get it out. Awesome. Yeah. Instead of like patient zero, you're like customer zero giving all the feedback and insights. I know that we've talked about so many different areas and this might be a big question, but I think looking back from a brand that's born out of the salon to now a multi seven figure business. What are some, I guess, like most critical decisions you would say that really contributed to the brand success?

27:16Refining our operations was a big one because neither one of us came from a background in a corporate setting where we saw how to do that. That was a huge learning curve of how do we set up the flow of the business so that it is setting us up for success And we're not always having to backtrack and have my accountant call me and ask for 10 things I don't have. That was very early on. And then also just keeping up and being open minded with with changes within the business and like integrating new tech stacks into our website, optimizing our funnels. And I'm learning something new every single day on how to more efficiently run the business.

28:03And it's really fun. Yeah, it does. It definitely sounds like that. And I think like often we talk so much about building community and like growing a brand alongside a community. And I think Reverie has done that so perfectly. So looking into the future, are there things you're excited about to experiment or expand with the community? We are getting out in real life this year and in the coming years. That's been a huge decision that we've made that we really want to get in front of our customers and be with them and spend time with them and let them know even more that there are two people behind this brand that are hugely passionate about how they look at their hair and entering into new product categories.

28:53Oh, very exciting. Yeah. Awesome. Well, we look forward to all of those events and new product categories. Thank you so much for being here, Hillary. Thank you for having me. It's been a pleasure. That's Hillary Markinson, president of Reverie. Our show is produced by Gogo Zoger and Megan Coyle. Our engineers are Miku Betlam and Matt Shorts. Benjamin Gottlieb is our managing producer and I'm your host, Shuang Esther Shan. Come back every Tuesday and Thursday to catch brand new episodes of Shopify masters. And Hey, if you're still here, go share this episode with another entrepreneur. Thank you.