Soft-launch Strategies That Lead to Immediate Sellouts

0:00As a founder, you always want to communicate 10 different things that make your product great. But at the end of the day, no one is going to remember what makes your product unique. They're going to remember one thing about your brand. Hey, how's it going? I'm Shuang Esther Shan, and welcome to Shopify Masters, your companion for starting and building a business. How do you test and iterate elements of your business before launching? My guest today, Claudia Snow, has perfected the process for Clue, a luxury coffee-concentrated brand. and she co-founded with her mom, Mariela, who is a certified Q grader with decades of coffee tasting experience.

0:42Before launching, Claudia spent over a year gathering feedback on product, sourcing sustainable packaging, and building out production and logistics. Claudia is here to share her pre-launch strategies and more. Thank you so much for being here, Claudia. Very happy to be here. So happy to chat with you. I love how you had an extensive pre-launch process. It took over a year to actually launch Clue. Talk to us about your approach and how you really honed in on this pre-launch process. So Clue is a craft coffee concentrate brand that I actually founded with my mom, Mariela, who is a Q grader, which is like a master sommelier in the coffee world.

1:26It's a super rare position. There are only about a few hundred, I believe 800 in the US, and they are basically certified to grade the quality of coffee beans when they are imported and they're graded on a scale of 100. So through Clue, we are on a mission to kind of decode the complexity of craft coffee. And we do this by offering the highest quality coffee in the easiest format. And so the hero product that we launched with is called craft coffee concentrate, which is a single origin super concentrate that is 12 times more concentrated than your typical coffee. So instead of filling your cup entirely with hot or iced coffee, you add a small shot of the concentrate and fill the rest of the cup with hot or iced water.

2:13The whole idea here is we do all the hard work of sourcing and roasting and brewing using only the highest grade beans so that as a consumer, all you have to do is really pour and sip and hopefully kind of find the flavors that best suit your palate. And to answer your question about soft launch, basically when our product and initial website were ready but nothing else was, instead of waiting for the rest of the infrastructure that is common for an e-com business like social, emails, even some part of the packaging to be all set up, I thought it would be smarter to just start selling right away as a trial run.

2:53This way, you know, we can practice our day-to-day ops. And if there's anything that we can adjust before we officially go public and do any sort of marketing, we can really learn and pivot. I think that once people make up their mind about a brand, it's a little bit harder to change their perspective about a specific brand, especially if it is premium. I think people are a little bit less forgiving about iterations. so basically during our soft launch we sold to family and friends and others who somehow managed to find us through word of mouth or just randomly online we got featured on some sites like thing testing and grommet and during this time we asked for lots and lots of feedback from customers I would you know text them email them ask to speak to them on the phone whether we knew them or not personally, I would just bother them.

3:51And then toward the end of the soft launch, we also did a pretty extensive survey as well. From there, we really learned a ton about who our target customer is and what is their behavior. And we did actually end up making big adjustments to our branding, packaging, and pricing. Well, those are very important components to a business, your pricing and your packaging. So when you were gathering this feedback, how were you able to distill all the information and actually execute in a way that you were able to pivot quickly and adjust those elements? So there were really three major areas that I mentioned, branding, packaging, and pricing.

4:36With branding, I really learned the importance of the brand story. It was super fascinating to learn that from the survey, anyone who heard the brand story directly from me personally knew exactly what made us unique, knew what we stood for, how we differentiated from other competitors. But people who discovered us randomly online mostly thought that we were just another coffee concentrate brand with a cool bottle. They didn't really realize that we were a QGrader-founded brand and that my mom invented our brewing, proprietary brewing process, all the quality aspects of the brand, all the effort that we put in to create the craft coffee concentrate.

5:21So what we did differently when we were really launching were two things. One was we invested in a brand video that really explained our journey. My mom's story of how when she first immigrated to the US. She found her group of friends with coffee lovers and that's really how she started her journey and eventually became a Q grader. And that actually ended up being a huge success on social as well. And then also secondly, we redid our website completely to make it less aesthetic focus and more about our journey, about our quality and flavor and the craft aspect of the product. And then packaging was the second thing.

6:02The punchline here is less is more when it comes to packaging, surprisingly. We were surprised to learn from the survey that our subscribers didn't necessarily want to get the nice glass bottles that we offer with their every order. A lot of them actually offer to ship those glass bottles back to us to recycle and reuse. And I think their feedback was at the end of the day, they're subscribed because of the flavor of our coffee. The nice packaging is just an added bonus. So we ended up introducing low impact refill pouches that are recyclable and also much, much lighter for our subscribers. And it ended up being a silver lining because it really helped us on the Uden economic side with much better margin.

6:52So we were actually able to offer our subscribers a much better price. And then I think finally on the pricing side, I think the key takeaway that we learned is no one likes to pay for shipping fee. And people really care about the price per bottle and less about the price of the total order. We did have a lot of abandoned checkouts during our soft launch period. not abandoned carts abandoned checkouts which means that they had the full intention of purchasing but they probably saw the shipping fee that we used to have and then abandoned checkouts happened and then in addition to that again during this massive survey that we launched during soft launch that a lot of people who were subscribed to our email list but have never purchased from us their biggest roadblock was the price per bottle.

7:42So we did two things again. We lowered our price, a bottle price from$35 to$32. And then for subscribers, we actually wanted to create a huge incentive for subscriptions to really increase and encourage higher LTV. So we have a$7 bottle discount, which is very unusual for our D2C brand. And of course, we got rid of the shipping fee. And instead, what we did was we upped our minimum quantity to two bottles per order. So we were able to really satisfy our customers' needs by reducing the price and eliminating shipping fee. But it also actually made us more profitable on the unit economic side. And now that we've launched for six months now, we're also seeing that we have a much, much higher conversion rate as well.

8:30It sounds like you also have the most caring and thoughtful customers who loved your packaging, but like, we just love the taste of your product. We want you to like reuse these beautiful bottles. So that's really nice to hear too. I think the survey that you mentioned is also so important and it's also hard to get right because the length, the type of questions that you can glean insights from. Do you have any advice there where you need to craft a survey that people want to take and is also useful for your business? It's helpful to always have some sort of incentive for customers to take the survey.

9:07just putting myself in the consumer's shoes. If I get an email asking to leave a review or do a survey, I will probably ignore it unless there is something in it for me. And so we offered our customers free products in exchange for their time, whether they took the survey or whether they agreed to speak on the phone with me or chat with me, go back and forth over emails. Every time I would kind of offer them something in return. And then to your point about the length of the survey, I think survey fatigue is really real. Survey is something that I do have a lot of experience in back in my days at McKinsey and Ruggable.

9:47If you try to keep it in less than 10 minutes, which equates to about, you know, roughly 10 to 15 questions, obviously fewer, it's more qualitative and longer in length. I think that's the really sweet spot to target. And I think what's really great about Clue's branding is the story that you have with your mom and also her experience really differentiates Clue from its competitors. Getting your brand identity and your story out to the general public is one of the biggest tasks. So are there any branding exercises you would suggest for new founders when they're trying to actually distill their whole story, but into a webpage or into a design?

10:31This is something that I also struggled with and had a big learning lesson through the soft launch process. As a founder, I think you always want to communicate 10 different things that makes your product great. But at the end of the day, they're not going to, no one is going to remember what makes your product unique. They're going to remember one thing about your brand. So make a list of all the value props that you offer and really prioritize the one thing that you want to be known for. Obviously be very thoughtful about it because that will again be the one thing that people remember. And it's hard to reverse people's thoughts once they kind of make up their mind about you.

11:12So prioritize one thing and repeat that story everywhere on website, on social, email, SMS, in your elevator pitch. Repeat that story everywhere you go. Okay. It sounds like you are able to make great decisions quickly because that's just so essential to starting a business, running a business. And I want to link it back to actually your journey into entrepreneurship because listeners might not know that you had an opera career, you were in Juilliard, which is someone's like dream career path. And then you were a consultant at McKinsey, also dream job for someone. But you were able to understand what feels right for you and make those decisions to change or pivot.

12:00And especially your experience within the D2C world with ruggables and glametics. How are you able to make these big decisions that ultimately change your career and change your life and you're able to be comfortable with making those big changes? That's a really good question. I, you know, always tell myself that every step, every point in time really taught me something. So McKinsey, I think, really taught me how to be a professional. Ruggable taught me the ins and outs of the consumer world. And Glomnetic really taught me how to tactically operate a startup, especially a fast growing startup.

12:40And I think from an outside perspective, it may seem like a random and big jump from consulting to a rug company to a beauty brand and now a coffee brand. But actually, to your point, the process is quite linear and thoughtful and did become building blocks of who I am right now, who I am today. And really, I think it was COVID that made me really reflect what it is that I want to do with the rest of my life. I really had to think hard about, you know, what I want to achieve in life. And I realized that I want to do my own thing. And I have a big interest in the consumer space. So from there, at that point, I was still at McKinsey.

13:25And when I kind of came to that aha moment, I actively recruited for any opportunities in the consumer world and landed a job at Ruggable as the strategy and product marketing manager. And here I learned, you know, what a ROAS and LTV were. And less than a year in, Glamnetic actually poached me to be their head of product. And this is really where I had the best understanding of what it's like to operate a true consumer startup? How do I find suppliers and negotiate with them? How do I take customers' feedback and iterate to launch a product? How do I lead a team? So when I decided to do Clue full time, I felt pretty equipped with kind of a full range of experiences from dealing with Fortune 500 companies all the way down to a startup that is only a few years old.

14:17And I think when I really think about my day-to-day, I incorporate a lot of the structure and processes that I picked up from McKinsey and Ruggable and kind of the grind and flexibility from Glamnetic. And every decision that I made from McKinsey to Ruggable to Glamnetic, it actually ended up narrowing down to really for me to start Clue. And so I think it's really hard to know exactly where you're going, but if you kind of have the North Star in mind. And when you make that decision and kind of reflect, does this help in getting me closer to that North Star? I think it will help you make the right decision and eventually help you lead to where you want to be.

15:03Yeah, you don't really need to have the exact destination figured out, but as long as you're directionally aligned to where you want to go. And I think there is a big through line with all of these experiences because you're getting to understand how you can find that next customer regardless of which industry and which role. Is there any common themes or thread line that you see from all these experiences that you take with you when you're thinking about finding the next customer and making sure that they want to stay with Clue for the rest of their coffee enjoying life? I think that it's really important to understand where and how you can shine at every step of the customer journey.

15:47That's something that I learned from all of my experiences. So how I was able to really reflect that with Clue is I knew that when we were starting this business that coffee is an extremely saturated industry. And so even though I felt really confident about, you know, our product, it probably wasn't going to be enough to really hook people in in the first place. So knowing that I spent a lot of time and energy into perfecting our branding, I wanted something kind of visually unique to get people interested in our product in the first place, which is how we landed on our, you know, the iconic bottle shape.

16:30We actually trademarked that as well. I studied a lot of the whiskey and perfume bottles and kind of came to came down to our bottle shape. And I also spent a lot of time a lot more time than people realize on choosing our brand color, the iconic Clue Teal. It's very similar to the Tiffany Blue, but I think a little bit more gender neutral and muted. I wanted to make sure that it was, you know, strong and iconic enough, but also gender neutral since coffee is enjoyed by anyone and everyone. And then also, of course, it's super important to know, important to really make sure that product is impeccable at every level.

17:11This was something that I felt really confident in from the very beginning, but this is probably the number one thing that is the most important. If you don't have a product that is 100 % at the highest level, then people, you're not going to get the retention that you want to see. You're not going to have a good LTV. And really quality and flavor of our coffee is truly what makes us different from other players in the industry. And this too is something that I learned from my past experiences. And I think, you know, we'll get feedback from a lot of people. I think Bon Appetit once said Clue is the best coffee concentrate they've ever tried.

17:56And we get this kind of feedback because my mom literally spent years just perfecting her, you know, her proprietary brewing process. And when it comes to quality and flavor, we have an uncompromising commitment. We use the highest grade beans, we roast in-house, we obviously hand brew using our own process, and we also deliver completely refrigerated. Coffee is a lot like fine wine, so any changes in temperature can really have a big impact on the flavor. So we do refrigerated delivery. Product was something that we knew we needed to be 200 % in, and I think we knocked it out of the park. And then I think finally, something that I also learned from my past experiences is that in order to, so now you've hooked the people and you had people fall in love with the product.

18:52If you want that extended loyalty and that LTV that you want to see in your data, it's really important that, you know, there's something more, like whether it's a brand story or your practices. So for Clue, obviously, I think people love the fact that, you know, we are a family business run by my mother and I. and they also love that you know my mom found her group of friends through coffee lovers and that really began her career and you know I think people really appreciate the fact that we practice sustainability from sourcing all the way to our biodegradable packaging and all those little things really build and help us build a really great brand affinity.

19:39I think I want to zoom in on the aspect of your production because, you know, you just mentioned it with a few sentences, but it was a huge undertaking because all of the production is in-house, the roasting, the brewing. And this is something is really tough for food and beverage founders, right? Because you might have a recipe, you might have a process, and it's one thing to do that in your own kitchen, but to scale it at a bigger level at mass production is a huge undertaking. So how did you approach production and creating products at a bigger scale? Yeah, so you're right. We are completely vertically integrated, which means we source ourselves, we roast, brew, and we deliver all in-house in our facility in LA.

20:27And we are at a point right now, we're tasting the bitter taste of our medicine. We right now have a lot more demand than we can produce. And quite honestly, because we had a bit of a long soft launch period, we didn't realize how much and how fast we would grow. Obviously, happy problems. But we are at a point where we're having to kind of limit our marketing efforts and take in what's mostly coming into us and even then being more selective and intentional about who we work with. But we are in the process of scaling our operations and increasing production. Already, we actually made a small change in our brewing process that allowed us to quadruple our production capacity, which is huge.

21:19But we really, the decision to vertically integrate came down to quality and flavor, which is really, you know, what our brand is truly about. We did explore co-packers earlier on because, you know, it's widely common for any food and beverage companies to use co-packers. And it's, you know, very nice to have an established manufacturers who know what they're doing to really kind of take care of everything for you on the production side so that you as a brand can mainly focus on marketing and sales. But when we were, you know, exploring different co-packers, it just didn't taste the same. The quality didn't match our standards.

22:02And when it comes to quality and flavor, we have a very hard line because that's, you know, really the genesis of Clue. That's who we are. So that's why we made the hard decision to vertically integrate and look at this long-term. Because of the increase in demand, you do have to think about the future as you're forecasting and planning. How are you thinking about that as you're scaling even more and having the future in mind? I think when it comes to demand forecasting, we have a pretty analytical background from my past experiences. So of course, it's been helpful. Although admittedly, this holiday season has been way bigger than I had anticipated.

22:47And we actually ended up selling out. I think when it comes to scaling, the good news is that outside of brewing, scaling our production and making it more efficient is very doable in that there are machines that exist already that do the things that we are looking to do. Of course, the part that's not as easily replicable is our brewing, given it's a proprietary process that we built. But we've already kind of begun thinking through that process. And it's actually very doable to do in steps. We don't need to spend, you know, millions of dollars in creating these gadgets. There are steps that we can take.

23:26And ultimately, I think where I can see ourselves going is following the Coca-Cola model. I'm not sure if you know that Coca-Cola actually doesn't share their trade secret Coke syrup. They are the only manufacturers of the Coke syrup, but they actually have authorized bottling partners who buy the trade secret syrup and mix it with sparkling water and they distribute. And that's how I think we can really scale while maintaining the high quality and flavor. That's fascinating to note. And it sounds like the perfect approach. Because when you were doing the soft launch, it's easy to share more about your background and sharing updates and keeping people engaged in social media.

24:14As you evolve, how are you approaching social media today to make sure that the community is still engaged and loves following along? So across all the marketing tactics that you can take, really social media is one thing that we do. We have been focusing on since launch and it's been going very well. We have a very good engagement rate. And I think what makes us really unique is that oftentimes if you go to our Instagram and check our content, not everything is about coffee. and I learned this by studying other brands notably Liquid Death because if you go to their Instagram page I love I love their page but most of the time they actually don't talk about their the products that they sell but they don't talk about water they don't talk about tea they'll just have a lot of random content on I don't know like heavy metal tattoos shoes.

25:18And it kind of dawned on me that I think too many brands right now focus their content on selling the product versus selling the brand. And we've been focusing a lot on the latter, and it has worked really well for us. And the brand value that we stand for is craft. Because if you actually watch my mom brewing coffee, it is truly a craft. It's like a work of art. and so in our social we like to highlight other artists who also use their craft to you know convey a message who put a lot of work and energy into creating something really meaningful and I think this tie also is deeply personal too because I come from the arts background so I know what it takes to really build your craft so something that I always tell you know other friends who are co-founders or founders of their own brand is really think about, you know, what your brand stands for and ensure that your content always conveys that value each and every time.

26:26I think that's such a valuable advice because to your point, like you can't talk about your product nonstop. You have to talk about elements that relate back to your branding. We mentioned some of the love that Clue has been getting like from Bon Appetit, but it's been raved by so many different publications and content creators. I guess like what sort of benchmarks are you looking for next as you're expanding, as you're thinking about new product categories? So funny enough, we actually know from the extensive survey that we ran during our soft launch that our subscribers already want new flavors of the craft coffee concentrate and new folks want beans, especially for those people who already have their routine set and are, you know, using the current concentrate to kind of supplement their routine.

27:18And with beans, we actually have the products already ready to go, including packaging, because we roast our beans in-house and we, you know, we're a roaster and we supply roasted coffee beans to local coffee shops and actually have been kind of running that in the background throughout the entire soft launch period, which actually has been amazing because it's very stable and cash generative. So we kind of use that to fuel and invest in the launch. So yeah, and cafes love our beans. So we kind of know that our D2C customers will also fall in love with the beans. And at the moment, we intentionally decided not to launch beans online because we have a very good momentum right now with our Hero product.

28:04and we want to ride this until the end of the year. But I think we will introduce this next year. And I think, yeah, again, based on our cafe performance, I have no doubt that our D2C customers will also love our coffee beans too. That's amazing. I love that you were experimenting having different channels and it's so smart. Looking forward in the new year or looking forward to 2025, five, what can people expect from Clue or is there anything you're excited about for the business in the new year? I think from customers perspective, of course, as I mentioned, beans will come. Maybe there will be a new flavor launching as well.

28:49You know, it's actually only been six months, so there's so much opportunity for us to tackle. And as I mentioned, because what we're dealing with demand versus production, there's so much untapped opportunity for us in marketing. Really social and, you know, sending samples to editors, PR aspect is really the only two small areas that we really focused on. So doing a lot more marketing, entering into a lot more stores, and kind of growing our concentrate while introducing Beans will be kind of how I envision 2025 for Clue. Amazing. Well, it's so incredible to see all that you've done within the last six months, and we look forward to seeing how Clue expands in the new year.

29:35Thank you so much. That's Claudia Snow, the co-founder and CEO of Clue. Our show is produced by Gogo Zogar 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 hang out with us every Tuesday and Thursday to catch brand new episodes of Shopify Masters. And if you haven't checked it out yet, Shopify Masters is on YouTube. Head over on the link in our show notes for full video interviews. Thank you so much.

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