Ep 562: Low Maintenance Scaling: How Priority Bicycles grew to 25k units/year

0:00If somebody has a question, you've got to be able to answer it. We're thinking like the customer, talking like the customer, communicating to the customer online. And then we also have 365-day-a-year in-house customer service, traditional brand positioning. Data has allowed us to ignore those factors for the last few years. I think we're getting back to making sure that we're very clear about what we stand for and what our products stand for. You can't be in a position where you have to buy every single eyeball. There just is not a way these days to be able to do that effectively. A lot of sponsorships, they're just transactional.

0:32I'm going to give you a product and pay you and you're going to talk about it on social media. I think a lot of that is falling flat for a lot of people. Whenever we launch a new product, we kind of call it the like, why should I give a moment? We take a step back and say like, why would anybody care to buy this?

0:53Connor Swegle:Connor, welcome to the D2C podcast. Excited to dive in with you today. Maybe we can start by why you build priority. Yeah, for sure. So started Priority 11 years ago now, which is wild. I like to say that I'm unemployable by anybody else at this point. I feel the same. Yeah. But 11 years ago, we had a passion for bicycles. I mean, we had a product design that we thought could be unique in the marketplace. And then something that's really relevant for your listeners is we were at this shining D2C moment where we had the leaders like the Warby Parkers of the world that said we can deliver great value at a better price.

1:30And so I think being able to combine those three things, we set out to launch Priority Bicycles.

1:35Connor Swegle:How did you sell your first bike? Yeah. So our first bikes, we caught the very end of Kickstarter excitement. So we were still at a point where you could get media coverage for Kickstarter, right? There's been enough people who I think have defaulted on their Kickstarters that it's really hard to have them cut through. But we launched on Kickstarter and we wanted to use that platform. It was really brought to brought to us by a friend of ours, said you should try this platform, you know, to kind of pre-sell your products. And so we thought this is a great way for us to fund early production of our bicycles.

2:08And so we went on to Kickstarter and we wanted to raise 30 grand, which we felt like was going to help us just get the ball rolling. And over the 30-day campaign, we ended up selling over 1 ,500 bicycles. The Kickstarter campaign funded at over$565 ,000. And it was a shock to us. I think it showed us not only was there an appetite for the product, but I think there was an appetite for the story as well. Which again, you know, at that time, that was very meaningful for people to feel like they were getting access to something unique.

2:38Connor Swegle:What are the key? Because I know you have a lot of different bikes. You guys go across a lot of different sort of genre of bike. What's the key brand element that makes you guys different? Yeah. So we do have a differentiator in what is a very mature and crowded marketplace. I'm sure a lot of your listeners can understand the challenges of cutting through in a mature and crowded marketplace. But for us, what we really hung our hat on from day one was low maintenance. So from a bicycle perspective, everybody is very familiar with riding a bike and seeing a chain below them. We actually put belt drives on all of our bicycles.

3:11So same brand gates that you might see on like a Harley Davidson or it's in Dyson or it's in HVAC or it's in your car. The technology existed, but it was really in boutique spaces. So what we wanted to do was apply that technology and get it really for the mass market. And so we put this belt drive onto the bicycle. It made it a very low maintenance experience, which was very different. And then again, launch that customer direct.

3:36Connor Swegle:Looks cool. So it's got a visual differentiator. I like that it appeals to like, people are like, you know, they like shiny things. They like cool bells and whistles, but this is just deep down. They know they're not going to spend enough time maintaining their bike. And so this kind of solves that, right? Yeah, it's an interesting sell because it's definitely not a sell that, you know, you really think about out of the gate, right? Like, you don't necessarily go to somebody and say, do you want to work on your bike less? Okay, cool. Now go buy a bike, right? There's an interesting customer story there that you have to navigate.

4:08But it does offer something that's very differentiated when you're looking at the research process. There is something unique for us to build around as a brand. And so those are things that, you know, from day one were very helpful, but they certainly, you know, year 11 are just as helpful.

4:24Connor Swegle:Talk to me about, you know, because in the DTC trend, Warby Parker, for instance, trying on glasses, that's pretty easy to do with an AR tool or something like that. Bikes, I know to this day, I bought a Marin recently and I was like, oh, I just want to buy it from the website. But most of or a lot of the big brands still won't even go DTC. They make you go experience it through a retailer or something. You guys going D to C from day one, I know you're expanding and have expanded into retail now, but how did you overcome the test drive aspect or how did you get people to want to lay down the cash for these bikes?

4:58Yeah, it's interesting. When you look at the business models that really excelled 15 to 10 years ago, a lot of that was because they were coming from this distribution model. Warby Parker, again, that's the easiest for us to understand. For a company to come in and cut out the layers of middlemen to make the product more accessible, a lot of the markets have figured that stuff out. That's a separate topic. But that is something that we have to deal with every day where, yeah, you can't just, there isn't just an AR tool where you can kind of like pop yourself onto the bike. The way that we have taken that on, which I think is very important for any entrepreneurial business and, you know, or any growing business.

5:38And I'm talking about not just companies that are trying to get to their first million, but I'm talking about even companies that are trying to get to their first 50. Is the customer service aspect of it, thinking about what the customer wants, how the customer is evaluating your product, I mean, that is top of mind for us. So we know that we have, that you can't just go to your local bike shop that's a mile and a half away anywhere to see our bikes. So we, it's put more pressure on us to make sure that we're thinking like the customer, talking like the customer and communicating to the customer online.

6:08And then we also have 365 day a year in-house customer service. So that is something that is very unique, like for, you know, for Marin and you know, we don't need to use Marin as an example, but for a lot of companies, not just in the bicycle world, like if you want to get a question answered, you're not going to call or text or WhatsApp them and get a response within 15 minutes. And so it put the pressure on us to make sure we were very present for our customers, which I think is very important in the DTC space.

6:36Connor Swegle:And you did that from day one through to like your first bike sold to 25 ,000 bikes sold this year? Yeah, I mean, day one. Yeah, like, my partner, Dave and I, we were doing, like, literally unwrap Christmas gifts with the kids and have the phone on in the pocket, waiting because if somebody had unwrapped a bike, and there was a washer missing, you're going to answer that question. And that's the same value that now our customer service team is much larger. But, you know, that's the same value that our customer service team has, where it's like if somebody has a question, particularly as a DTC company, if somebody has a question, you got to be able to answer it.

7:13Connor Swegle:I love that. And it actually mirrors the in-store experience. Every bike shop I've ever been in is filled with really cool people who you feel like who you have. I have great rapport with every bike shop that I've ever been into. You sort of trust their expertise explicitly. So it's cool to see that being transferred across to the online world. Yeah. I think that's the other factor of having in-house customer service, which I can't stress how much good customer service makes a difference. But, you know, we've got people who, you know, they're going to be in our videos, our informational videos online, and then they're answering the phone.

7:45You know, I'm here on this podcast, somebody's going to hear it. And then maybe we do a group ride next year, I'm going to be on that ride sweating right next to you, right? And I think that does create the connection. So I think what we don't have in that, you know, the shop on your corner, we certainly will make up for if you shoot us an email at nine o 'clock, we're going to get back to you. If you go on a ride, you're going to see us riding there. So, you know, there are other ways for us to build confidence.

8:09Connor Swegle:In your growth journey over the last 11 years, what have been like the, I don't know, the biggest tranches, for instance, like when you get to your first million, now you're up at, you know, 25 ,000 bikes sold a year. What have been like the tough, has it just been slow and steady growth or have there been sort of like noticeable tranches of like evolutions that companies had to go through? Yeah. I mean, you know, what's interesting about our growth is in doing customer service every day, you hear a lot about what your product needs are. Because people will tell you, you know, I was going to buy this, but does it do that?

8:38Or I bought this and I wish it did this, right? You have this information to build on and that organically has helped build our product line, you know, and that definitely creates a pretty natural arc, right? When you have more products to sell, then, you know, your numbers go up, right? Those kind of line up on the graph. I think there's definitely areas that we've grown into. I mean, we started with a single speed, or not a single speed, we started with one bike that was a three-speed around town bike. Now we make bikes, we're making a full suspension mountain bike 11 years later, right? I do think areas of the product growth, you know, moving from recreational and then adding on kids' bikes, and then adding on commuter bikes, adding on adventure bikes, where our unique factor being positioned around low maintenance was really helpful.

9:25I mean, those were all definitely jumps within the outdoor industry. The biggest one that's happened to us, right. It's affected all of our lives in a variety of ways was COVID, right? The rush on bikes for COVID was a massive jump for us. So obviously for a couple of years, really great. But what you have to do is determine as a company, how do you understand where the marketplace is going to level out and not overextend yourself, which a lot of people have done, not just in cycling or outdoor, but in industries throughout our lives.

9:53Connor Swegle:How do you treat the marketing funnels? Because bikes have so many different purposes. There's so many different things, so many different kinds of people, and yours spans so many different use cases. How do you think about marketing to all those different kinds of people? When your product suite grows organically and sometimes just around you, you definitely lose sight. I think one day we looked up and we're like, there are 20 bikes on our website and somebody who just heard about us for the first time has nowhere to go. And I think there's two things that sort of happen. And I think this is a very important trend right now.

10:29One is you definitely like for us, we definitely have to think about traditional brand positioning, right? And like data has allowed us to like ignore those factors for the last few years. I think we're getting back to making sure that we're very clear about what we stand for and what our products stand for. And then what we need to be able to do on the customer side, since we don't necessarily have somebody directing you to this part of the store or that part of the store or assign it an escalator, we really have to think about wayfinding on the site and how a customer can get where they need to be.

11:02And then once they're there, we really have to think about the language and the considerations that that customer is taking into account. So it really just comes down to a lot of rigor, but it's just thinking about what's unique about our brand and what might be going through that person's head when they're on the shopping journey.

11:16Connor Swegle:And does that extend to the kinds of top of funnel marketing or like, you know, there's, you could have 20 different campaigns with each different avatar kind of going. How do you think about your different customer types at top of funnel or on the marketing side of things? Yeah. So, you know, there's definitely been a big slimming down of how we approach top of the funnel recently. And I would say probably five or six years ago, the idea was throw money in the algorithm, we'll figure it out for you. Because that's what the algorithm is for. We have all this data and it's going to make your spend efficient.

11:48And I think what we've all learned is that that's not necessarily the case. And so what we've done is really put a lot of rigor into who we think is in the consideration set for our products. And I think that's really important for any marketer that is trying to make the most out of their money is I don't believe that it's smart to just throw a bunch of tests against the wall and be in this always testing environment and figure it out. It's very costly and it's very hard for creative scale to actually cover your bases and get enough relevant data to slim it down. So what we do internally is really think about who are the customers who would be in a position to buy and then target them.

12:23So for example, we're never gonna buy broad reach terms on Google for all bicycle terms. We don't, you know, if somebody's just trying to get a$99 cheap bike to kind of throw in their vacation home, we don't wanna spend money on that. We want to find the people who are looking for benefits that we could provide and make sure that we're spending our money in those areas, particularly at the top of the funnel where consideration is lowest.

12:46Connor Swegle:Obviously, you mentioned the rides that you do as a way to kind of stay engaged with the community. I have a story here about how one of your recent bikes, The Bruiser, was crowdsourced sort of with your customers in mind. Talk about, I guess, how that feedback loop evolved and what it looks like today. Yeah, so the biggest challenge that faces D2C companies, and I almost feel like we're talking about like a dinosaur now. We're still D2C. Yes, we're still D2C. We're still doing it. But the biggest challenge that you have is just customer awareness. Like how do you get the scale of people to come in and be interested and learn about you?

13:21And you can't be in a position where you have to buy every single eyeball. Like there just is not a way these days to be able to do that effectively.

13:28Connor Swegle:And rebuy them over and over again. Yes. Yeah, rebuy them. I mean, the amount of accidental clicks that somebody makes in meta is unbelievable, right? Like a small business could be out in a few months if they were trying to do that. And one thing for us that we've had, since we're a lifestyle company, we do have real riders who are on our bikes and doing very interesting things. And so what we didn't want to do, which I think is a trend right now, is you see a lot of these UGC companies that just send products out and somebody posts a video. I think that stuff is just turning into noise that people can filter through.

14:04It was really neat the first couple of times, but I think that customers are going to see through it in time. So, you know, we worked with one of our great partners. His name is Ryan Van Duser, and he's a YouTuber. And he was getting feedback about a bike that we had launched with him. It was called a 600 ADX. It was a really robust adventure bike. And what we were getting a lot of feedback is people were saying, hey, I love your bike and I love what you're doing, but I don't do what you do. I'm not out on my bike for six weeks. I need something that I can go out in my backyard with. Or I need something to just do a three-day trip with.

14:37I don't work for myself. I got to show up for work every week. So we had this idea of saying, let's not just take their feedback, but let's actually open up and synthesize everything that we've heard in these comments, whether it was internally from our customer service or with our buddy Dooser and his channel. And we synthesize that into a set of requirements or discussion points. And then we created a video series around that where we were just talking about what some of these different opportunities were, the things that we may want to design. And we got great feedback from our customers directly on what that was.

15:09We looped them into that project. It lasted over a year so that when we launched that product, the customers actually felt like they were part of it. They knew exactly what it was and they weren't starting at zero from day one about educating themselves on that product. So it was a very successful launch and something that felt very natural. And it felt like we were really developing something for customers.

15:31Connor Swegle:And that's gonna, yeah. And if it reflects that exact need of, even if just one person, it's like there's gonna be other people like that and the authenticity shows up, right? People will see themselves in it. Yeah, I think people wanna be heard. Research is interesting. And I think for, again, when I'm thinking about companies like ours or when I talk about small and medium-sized businesses, again, I'm thinking about companies that are still to that$50 million mark. It's very challenging to get, like we'll hear from consultants or friends, oh, you guys should do a big quant or a big qual. You do a big brand pillars study.

16:09And the reality is that when you do the research, it's very challenging to actually get the scale you need as a business of that size, right? And so I think opening up to customers is a great way to get the verbatims, but you also have to synthesize that and really put your own expertise against it. And the example I give for that is we got a lot of feedback from people in comments when we said, okay, we have the final colors for you. What color do you want? We're thinking, God, this is gonna be so great. We finally won't be overstocked on one color that nobody wants. We're not just guessing. So we got overwhelming feedback.

16:42Over 80 % of people wanted this like bright orange color called pumpkin. And we said, you know what? That really feels like something that people say they want, but they don't actually want. So we kind of modified that. We ended up ordering a different color split than what people asked for. And that ended up being how that purchase data landed for us. So I think it's one of those things where in crowdsourcing, you can get the feedback, but you also still need to take your expertise into account and make sure you're doing the right thing for the business.

17:10Connor Swegle:Maybe correct me if I'm wrong, but I remember like when you, when it shows up on your site, it, uh, as like the hero shot of that bike, it's still orange. Yeah, the hero is the orange. Which is smart. It's like you're playing it off, right? A little bit. You know, and that's the thing with selection is that, you know, and that was another trend a few years ago is like everything needed selection. That was sort of the Nike ID echo, right? Yeah. I can go and make my dunks whatever color I want. I did that. And then anybody who used Nike ID found that they had 40 screenshots of shoes they were never going to buy, right?

17:40And every color option available. The reality is the same with automobiles, right? What color is in the commercial red, but what do people buy? they buy black, gray, or white. And, you know, that goes to that difference between what people say they want versus like when their dollars are at stake, how they're going to behave. 100%.

17:58Connor Swegle:Super cool. You alluded a little bit to data. And I'm just curious, because you're CMO, you're a co-founder and with your main focus on the marketing, what are the key metrics you're looking at maybe day to day that you find most important these days? Yeah, I get in a lot of trouble from people with this, but I am definitely a data simple person. And I think a little bit of that is blowback from the amount of data that we've been able to have access to in the last few years. I think that I definitely have reactions where I think a lot of the platform data that we get is acting in self-interest and can really confuse you.

18:32You know, and you had a podcast with Constantine on, I think. Yeah. And I felt great that he echoed my sentiments about how the data can actually create challenges for you. What we want to look at is a very simple view of what pages people are looking at for our products, what people are adding to cart, what people are starting checkout on, and then what people are buying. And we want to slim that down. We don't look at aggregating. We don't look at stitching our data. We don't look at trying to build a customer journey. But we really look at those simple factors. And from there, it's very easy for us to pivot.

19:08So, for example, if we see that a product has a lot of views but not a lot of conversions, we say, great, that's either information on the page or it's a checkout issue. If what we see is high conversion, a lot of visitors, a lot of conversions, but not, and we say, you know what? That just means that's a traffic issue. Let's go up that journey and get more traffic built in. So what we want to do is really simplify that to what the true customer behavior is and then use our experience to try and make those numbers better.