Success Story: Darn Good Yarn Rocks At Customer Retention

Darn Good Yarn Nicole Snow

Update, May 29, 2014: Nicole just sent us a note and asked us to amend this post with the following information: “When this story was written in February we shared that RetentionGrid has helped us make $17,000.That number has totally increased only three months later. We’re up over $46,000 in sales that RG is responsible for! Pretty insane huh?! Thank you for making a difference in my life! This app is changing the way we interact with our customers!”

 

We live for our clients’ success stories, and there is no better feeling than when they use our product to significantly increase revenue and change the world at the same time.

Darn Good Yarn, founded by Nicole Snow, a US Air Force veteran, is a perfect example of a small business which excels at both. Her company’s mission is simple: to provide phenomenal quality fibers to enthusiasts while helping the women of Nepal, India, and Chile become independent and self-reliant. Nicole and her team select women in these areas who have no other job opportunities, teach them to create handmade yarn from recycled materials, and pay them a wage that not only allows them to survive, but to thrive. We sat down with Nicole to talk about the need for micro-enterprises, the importance of loyal customers, and how RetentionGrid has helped her earn over $18,000 within four months.

 

How did you get inspired to create Darn Good Yarn?

I was learning to knit and had difficulty finding the materials that I wanted. Companies that sold recycled silk were not doing a great job, and the fiber industry can be a bit snobbish. I saw an opening to position myself as an eco-friendly alternative to craft supplies (we use materials that would otherwise be thrown away, such as used silk saris), and also as someone who is open and approachable — a real friend to my customers.

Sari Silk Ribbon

Sari Silk Ribbon

I also wanted to turn knitting into a social enterprise. I realized that in India and Nepal, where we were sourcing items, I could help women who are living off of less than $2 a day make an actual wage that would have a huge impact on them and their families. And people loved the yarn! My first batch sold out within a few weeks.

I’ve been calling myself a small business, but actually, I’m a micro-enterprise. I want to show people that it is possible to create small business ventures that have a big impact on communities.

How do you drive growth? Do you have any tips, tricks or hacks that other shop owners could benefit from?

Growth for us has come from curated packages and from including our customers in product development. Sixty percent of my business is wholesale. I started doing the shopping for my customers by curating best-seller packages and people love it — I curate a collection for them and they can simply press a button and go. It has significantly increased the average sale. You need to make it as easy as possible for your customers to give you money.

As of January 2014, my weekly percentage of orders from repeat customers had risen to 46%.

I’ve also driven a lot of growth by really listening to customers. I’m a friend to my customers and I work hard at being open and approachable using social media. Our product ideas are sourced from our customer community. I consult with them via channels like Facebook to hear about favorite new colors, I look to Instagram and Pinterest for design inspiration, I really let them lead our direction. Of course, you follow trends, but going back to your customers and making them a part of the process creates excitement and loyalty. As I’ve learned through using RetentionGrid, loyal customers are critical when it comes to ecommerce. Existing customers are four times more likely to buy than new prospects and their average purchase is much larger.

Speaking of loyal customers, you’ve had quite a bit of success through RetentionGrid. How did our product help you achieve this?

To date, RetentionGrid has helped me generate over $18,000 in sales. I started using RetentionGrid toward the end of September 2013. At that time, my percentage of orders from repeat customers was 28%. As of January 2014, my weekly percentage of orders from repeat customers had risen to 46%.

Like most small business owners, I wear a lot of hats. Before RetentionGrid, I had no idea that I’d be able to read and understand sales data so easily. I started to think about segmentation in an entirely new way. Before RetentionGrid, I would segment my email blasts only by product preferences. For instance, we’d send one email to customers who knit, and a different email would be sent to customers who crochet. Now, if I want to send a big email blast for a crazy sale, I’ll dive in and send tailored emails to specific groups that RetentionGrid identifies. Our Promising customers might receive an email informing them about an exclusive product, and our Sleepers might get an offer for an additional discount to bring them back into the Loyal category.

Darn Good Yarn

In addition to sales, we use RetentionGrid for newsletter blasts. I’m able to segment where customers are in their lifecycle and create customized messages for those specific groups. RetentionGrid makes it easy to see loyalty by group and how each group trends over time, which helps me discover customers that I can encourage to buy more often.

The one segment for whom I’ve really stepped up my marketing is my Promising customers. I send them emails once a week to make sure they are engaged and will continue to be loyal. I have been incredibly impressed with the results. An additional $18,000 in revenue in four months? I’ll take that!

What is next for Darn Good Yarn?

We almost doubled in growth again as we closed out 2013, and plan to reach nearly one million dollars in sales in the coming year. All of this growth has allowed us to continue to lay the framework for more micro-enterprises, and to expand to Chile to work with others, such as Royal Llama Yarn, which supports a dwindling llama population and the people who work with them. They have discovered a way to process the llama fiber in a way that makes it deliciously soft and great to work with!

Of course, all of the additional sales support our partnerships in Chile and elsewhere. RetentionGrid is my favorite app of all time and I can’t wait to see all of the new features and insights in your upcoming release.

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Kalie Moore

Kalie is a marketing strategist for startups, a world traveler, and former San Franciscan. She served as an Entrepreneur in Residence at Startupbootcamp, is a mentor for Startup Weekend, and a proud Berlin Geekette.
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