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Testing your ideas against reality can be challenging. Not everything will go as planned. It’s about keeping an open mind, having a clear hypothesis and running multiple tests to see if you have enough directional evidence to keep going.
This is the How I Tested That Podcast, where David J Bland connects with entrepreneurs and innovators who had the courage to test their ideas with real people, in the market, with sometimes surprising results.
Join us as we explore the ups and downs of experimentation… together.
David J Bland (00:01.531)
Welcome to the podcast, Courtney and Slava.
Courtney & Slava (00:03.758)
Thanks David, thanks for having us. Yeah, we're excited to be here. Thank you.
David J Bland (00:07.505)
I'm excited to have you. I've been looking forward to this conversation all week because I was doing a bit of research on what you were about. And I thought, oh, you have such a fascinating story. And I'm sure along the way, not everything went as planned. And I kind of wanted to use this as an excuse to dig into stuff with you. And then our listeners are going to learn from listening to you and what you went through as well. So I'm just really happy to have you here and have you hang out with us. And I guess before we jump into testing and all that, if you could just give listeners a little background on yourselves and your story.
Courtney & Slava (00:38.158)
Yeah, I'm Slava. My background is in commercial construction and franchising. I did that with Menchie's frozen yogurt here in Los Angeles, California, where they were just an emerging brand with maybe a dozen units and had the opportunity to be when they went to 300 units in two and a half years during the yogurt war. So it was really exciting for me A to Z. And then have a commercial construction company now and doing pub teak full time and franchising that business now.
And I come from more of the marketing and sales aspect. I was in fitness and then I moved into marketing, which is what I love. And that's how we actually started Puptqe, bringing that together and using Slava skills and my skills to create something because of our dog. Brought us together.
David J Bland (01:26.986)
So maybe tell us a little bit about Puptqe and what it's all about.
Courtney & Slava (01:30.666)
Yes, so it actually started a few years back. Our dog, Champ, had flatline in the hospital and he was revived, later diagnosed with Addison's disease and that sparked something that we wanted to create something that celebrated that special bond with him and with other dogs. So it started as an online business and then one day Slava said during our wedding, hey we have a surprise coming in nine months, which we had no plans to open a brick and mortar but that surprise was
actually a brick and mortar store so in nine months we got married in February and in November we opened up the first pub teak.
Yeah, and to add to that really, you know, on the brick and mortar side, when people were looking at it and they still are, it looks from one camp, it's dying off the vine, the retail side of it, right? And on the other camp, there's a massive investment into repositioning retail, making it more experiential, more entertainment. So we wanted to take a thing, you know, a space where majority of when it comes to pet retail is really non-emotional and all transactional, right? You come in, there's a bunch of shelves, you get what you want.
You might make an interaction if it's your local boutique or whatnot But I think of Petco, PetSmart, PetSupplies and so forth. There's really nothing there instead of just a transaction So what we wanted to do is make it interactive, experiential and entertainment And that's why the entire store is designed that way and the entire concept and the customer journey from the time even on this podcast that you hear this Hopefully go on to our virtual tour that we would give folks a lot go on to our Instagram and then come into our store so it's an active
point than your typical distribution channel where retail was in the past.
David J Bland (03:17.301)
that's interesting. I want to dig in a bit about that. Before we do, I'm always fascinated about. So you both were in different spaces before coming together and creating this over over over a great cause. I'm wondering what skills you had from different industries that ended up helping you in in creating public. Like, what was it that you pulled forward and you're like, yeah, this is a different context. But I know maybe how to approach this because of what I've done before.
Courtney & Slava (03:47.02)
I think one of the biggest skill sets in its universal, but for myself specifically is learning to make adjustments really swiftly and quickly. And I think not just that's a skill set everyone's going to have to have in the future, but in a sense of growing from say 12 units and seeing it to go 300 in frozen yogurt, may, have to, we made a ton of mistakes, but we also, I would say made directional changes quickly because we're smaller and we had, we had the nimble being nimble to do that. So I think that's one of the biggest skill sets, especially
as emerging brands or even mature brands for that matter, you have to be able to take, I wanna say a risk, but corrective action swiftly, quickly and live with the decisions that you make with the information that you have. think that.
is a skill set that can be developed over time, but it's something that you can't just be taught. have to experience it. for me, Slava and I are like a yin and yang, but it works so great with Puptqe, our strengths. I think one of my skill sets was the one on the marketing side, but prior to this, it was more corporate type of marketing. So it was very straightforward, very bland and very boring per se. And with Puptqe, got to be more creative. And I love using that part of like create
trying new things and then the art of that has been fun and then also the community aspect. So being very family oriented from Hawaii but using that skill set to really bring that community together that we have at Puptqe that comes from you know from our memberships to also the community that we leave with the hospitality aspect.
David J Bland (05:23.802)
Yeah, that helps. It helps give perspective on things. I love when people jump to different industries, but they pull something like underneath it. There's a commonality that maybe doesn't seem obvious at first glance, but it transfers. like the way you, Slava, the way you framed making decisions. That is something I'm really focused on and the companies I coach and this idea of, hey, given what we knew at the time, we made the best decision possible. And let's not, you know,
Courtney & Slava (05:34.222)
Thanks
David J Bland (05:51.919)
revisit it over and over and over again. And like, what if, what if, I mean, it's like, we had this information, we made the best decision we could, and let's just move forward from that instead of revisiting it, which I think some people get stuck in the, well, if I'd known this, I might've done something differently, but none of that really helps you, you know, at present time.
Courtney & Slava (05:54.477)
Yeah.
Courtney & Slava (06:10.328)
think Colin Powell said it the best, you have to have 70 % of the information to make an informed decision. Anything past that's analysis paralysis and then it's regret and you're looking, you're doing a post-mortem when a post-mortem is not necessary, right? At times the entire market could change completely and I think this is where retail is dying is there are like dinosaurs to move and be experiential and change to the consumer's needs, not to their own needs. So it's really interesting what we're seeing now.
David J Bland (06:39.194)
Yeah, retail is going almost through like a reflection point at the moment. And I want to get into that a little bit with you. But let's go back to, okay, so nine months, brick and mortar store. What were some things that you tried early on that worked and some things that didn't work early on as far as like setting up that store? Because I imagine that's a huge endeavor. And obviously you're pulling from past experience, but what are some things you tried that went well and some things that didn't go so well early on?
Courtney & Slava (06:43.084)
Yeah, yes.
Courtney & Slava (07:08.718)
I think the main thing is when you come into a massive category like the pet industry and you're looking at it and the way the traditional path forward is obviously discounting, coming into it, folks in to acquire that customer. And I think that was one of the biggest mistakes we made and we tried and we tested. And then you don't create a differentiating factor. Yes, we had hospitality. Yes, it was a unique community store. But what we did is we said, what are we the best in the world at? One thing. And we were removed. We were considering doing grooming, daycare,
and so many things. So said, we're the best in the world providing hospitality and entertainment for docs, even niche. So I think niching down specifically and being the best in the world at that one thing and layering it, then taking the traditional retail model instead of being distribution, where you come in, buy whatever you need to. We created it as a marketing activation channel. So online and offline served itself as a flywheel effect. So people come and store online, get activated, and then the lifetime value of that customer
It goes maybe from a year to a couple times a year to we had a customer's purchase 100 purchases with us to keep in mind over 365 days. That's every that's about two purchases a week. So what that says is and that customer becomes a word of mouth advocate in their community. So I think that's the number one thing when we learned is we're the category leader now we created as for dog entertainment and experiences and we kind of set the rules and the tonality around that. As we move forward, we're seeing a lot of people coming to that
space which is exciting that means it's validating what we're doing even further.
I think we also try to please more customer, like all customers rather than our ideal customer. So whether that be from the marketing standpoint or even from the sales standpoint, it was all driven to all customers in general. And that was something that we had to learn and it took us about a couple of years to really dial down and say, no, we have an ideal customer profile. We service everyone with the same hospitality and the same customer service when they walk in. But as far as our
Courtney & Slava (09:14.16)
memberships and services, it's for an ideal customer and that's really what we learned along the way. Well there's 70 million dog owners in America, right? And not everyone's our customer. have the Petco, PetSmart, then you have the Ultra, Boutique, Beverly Hills, and I mean we service that in the middle, right? And we service, going a step further, is providing the entertainment experiences where we have over 60 to 70 events on a membership base per year. That includes paint and sip with your dog, know, Dodgers watch,
parties, have trivia nights, bingo nights. The idea is it's an activation point. And I think that's the biggest thing is taking traditional retail and saying, this is a media store. It is not a traditional retail. And what media is, it's activation and it starts the entire flywheel once they step into our store from day one.
David J Bland (10:03.866)
I like the niching down concept. remember, I've been giving keynotes recently at different conferences and I've been telling this story of like this kitty litter story where I was on this startup reality show in the valley and this woman Carly and her co-founder came up and kind of pitched me on this idea of cat litter. And I was like, it's such a crowded market. How are you ever going to survive there? I was very like in my head while this was going on. And then like, of course speaking, I was trying to reserve judgment.
Courtney & Slava (10:23.01)
Thank
David J Bland (10:31.444)
And it ended up becoming pretty litter and it was quite like a billion dollars, you know, and I was like, okay. So this niche down of, course they said, okay, we're going to deliver the litter. It's going to help monitor your cat health was kind of a unique value prop because cats hide their, you know, illnesses. and, and I just realized pretty early on in my career that I can't pick.
good ideas and bad ideas, know, the people pitch me. It may sound like a bad idea to me, but who am I to judge your idea? It's more about what's the risk in your idea? I go test it and you'll find out, you know, with some like extreme exceptions. But for the most part, like I had no idea that was gonna be a billion dollar company. I'm sure a lot of investors that passed on it wish they had not passed on it as well. So I just think.
You you niching down and saying, okay, of course that's a crowded market. And I'm sure you got a lot of feedback of like, don't even try that. You know, you're going up against Petco and PetSmart and all these. But in your journey, it sounds as if like you kind of had an open mind and you're willing to create a new experience, almost like maybe even creating your own market by going just very specific. Here's, we're going to be best in class at this specific thing.
Courtney & Slava (11:41.836)
Yeah, I mean we took in reverse as you know the retail store at PECCO, people come in for the products and they just leave for the products. For us, people come for the experience and the products are built into the customer journey. So it's like going in Disneyland. When you leave Disneyland or Disney World, you feel guilty if you're gonna buy a t-shirt or souvenir. You do, you're like, my God, I had a great experience, why wouldn't I grab something? That's kind of the idea that we put in. Obviously it's a shorter duration, people are in there maybe for half an hour in the store, an hour. But that's the idea, it's the products are secondary.
The transformation is always the first thing that we try to provide in the hospitality experience side of it.
David J Bland (12:19.395)
I like that. So maybe double clicking a bit in here. What are some of those really early type experiences you tried to test? And maybe just give us a little bit of insights of like, because you have limited resources. There's so many things you could do. So what are a couple early things that you found like worked and some other early things that didn't work so well?
Courtney & Slava (12:40.13)
Yeah, one of the things, and I'll let Courtney add in on this, but we wanted to...
strategically, first we didn't have the capital and second we figured strategically we don't want to run any ads for like Google, know, Google ads and things in Yelp ads like Petco and PetSmart were. So fast forward two years now to this day if you Google Temecula Pet Store we're one or two on Google and Yelp. And PetSmart and Petco are both running ads on both those platforms but if you're looking at organic thing what that creates is validation, authority, authentication in that marketplace. So we've had folks
We're located, never been foot in our store. They'll go and yell, they'll see parties and they'll go on Instagram. They're booking parties for $300 by just that validation by somebody else. So the point I'm making is we tried going, actually we didn't try, it was out of limited resources. We can't compete with Petco against the ad spend that they're doing. But what we can do is provide great hospitality, put that process in place and being an ethos of not an afterthought. Petco now is trying to do that,
it has to be built into the customer journey, can't be an afterthought. So that was, you what we tried and it worked really well. I think another thing was, well, we tried. So one thing on the marketing and the sales side to bring more awareness and being new to the market, one, and also in a community that we weren't familiar with ourselves. We tried doing everything. And sometimes when you do everything, everything can go.
wrong or not as how you thought would plan. So we were doing events, we were sponsoring booths outside the store, we were going to places that were far out from where we actually were. We were spending resources on not necessarily UGCs, but something like that, like those type of campaigns. And we realized everything was not going really anywhere. So we really focused on now the community aspect, which we learned is
Courtney & Slava (14:40.336)
much better approach to everything. Well the customer has a loudest voice, right? A customer's voice is a 10x effect compared to any campaign that you could run to acquire that customer, right? Any dummy could acquire a customer and we're seeing it VC funding. Can you retain that customer most of the lifetime value of that customer? If you're not providing them value, you're not gonna have that and you're always gonna be running on against CAC and your ratio CAC to LTV. You know, right now our CAC to LTV is about 60x or 60.
60 to 1 so just to give you an idea of that is once a person comes in our flywheel is really sticky Throughout the entire journey and it's not sticky It was thought through but it was because of the hospitality and the foundation that we've laid From the very inception out of necessity by the way, but if we had I think if we had the resources We would have tried to compete with Petco and PetSmart and we would have got to this point But we're really focused on retention now So going back instead of going doing a bunch of events and going up
all these shows and booths everywhere. We're really focused on the retention aspect. And once that customer comes in, having them come back again and again. And I actually did a report today and I looked at some analytics and if the customer shopped with us at least once, so the average is that they've shopped with us nine times in the year. So which is a pretty good return and that means they're stopping by at least once a month for a pet owner who has a dog food, dog treats. But that was something that we had to learn and it
took us a while to learn, but I'm sure a lot of business owners are the same way. Trying to find a, there's one, there's, and creating more problems from themselves,
David J Bland (16:23.361)
It's easy to do unintentionally. you know, so when I started advising companies, you know, I was like, OK, yeah, we can do pay that. Yeah, of course. But, you know, that only gets more expensive if you get addicted to that early on and you start scaling. It's not like you spend less on pay. That's like that number usually gets bigger. And we just had a guest on a couple of episodes ago where we talked about metrics and
Courtney & Slava (16:46.989)
Yeah.
David J Bland (16:53.197)
We were calling them pirate metrics. If you're from corporate marketing, you probably know this, it's like AARRR. So it's like R, that's why it's called pirate metrics, by the way. So it's like acquisition, activation, retention, referral revenue. And I liked what I heard when you said, now we're focused on retention. And that leads me to believe that you've probably figured out that you've been doing this a while, a little bit about getting people into the store and getting them active in the store and activating. it's...
it's that coming back part. Obviously you could spend more time on acquisition and activation, but if they're churning out and they're not coming back, it's kind of like you're just on this, it's like a leaky bucket kind of thing. So I like that you are focused on retention because it leads me to believe that, okay, we now have diagnosed that's where we need to fix. And then I'm sure after that, there's gonna be some other place in that funnel that you're gonna need to work on. But I liked when I heard retention.
Courtney & Slava (17:27.224)
Mm-hmm.
Courtney & Slava (17:47.318)
You know what we were focused on actually? So there's so many different platforms you can use, Google, Instagram, Meta, Facebook, TikTok. But where we found the most success, at least in the last six months, was actually through Nextdoor. I'm not sure if you're familiar with the Nextdoor app.
David J Bland (18:03.873)
I am, but not in this way.
Courtney & Slava (18:05.91)
But because we're in the pet retail space and it's because it's very community based and in the communities that you're in, you're able to communicate with all the like minded individuals or people who have pets or connect with business owners from the partnership side that are in those communities. And it creates that wheel of connection that you won't find on, you know, Instagram or TikTok per se. So it's a different method of marketing that actually
is working for us. And it's also something that I'm seeing more people, the more I'm on it, I see ads of very similar type of service-based companies though, that are in the pet space, whether that be pet waste, pooper-scoopers, or a grooming aspect. I've been seeing more people run ads that way as well. Well, I also think as a VC capital, there's plenty of dry powder available on the sidelines, but as interest rates increased,
The CAC has not been funded through the rounds, so you have to, once everything gets shown up, you have to have the retention. think a lot of, even investors are figuring that out too. It's like, well, we can't fund CAC where your CAC to LTV, going back to that, is a two to one or a to one ratio. Yes, you can be growing sales, but you're actually not providing any value, like you mentioned, any value, or you haven't repeat customers. So I think the holy grail of any business, and you know this as well,
is repeat customers and then those repeat customers tone other customers but to create that does take a lot of energy effort and a lot of trial and error and testing a lot to get the ICP right too you know because not everyone's our customer that's okay we love everyone who's a dog owner we love everyone who's a pet owner but I think identify your ICP and leaning into that I think that's really important
David J Bland (20:00.366)
I remember going to a session where we were talking, they were talking about a fish startup. It was like a fish finder startup. And they were trying to define their ICP and they're like, oh, this is fishermen. Of course it's fishermen. And what they realized was there's like sub segments. So there's a group that obviously is their segment. And then there's a group that.
Courtney & Slava (20:12.598)
haha
David J Bland (20:20.462)
to their core of their being hated the idea of their product because it told them where the fish were. And they're like, that is not sportsmanship. Like we do not, we're never gonna be your customer. So it's really interesting. Like even as targeting pet owners, I imagine there are all these different kind of sub segments. And then, you had the person that comes back every couple of days. Obviously that's probably more of an outlier, but then you have people that maybe come back every month. And so there's almost like,
Courtney & Slava (20:28.558)
you
David J Bland (20:50.008)
different sub segments I imagine in of in your business. And I was thinking through when we think about how you market to those, I mean, Nextdoor, could you explain maybe a little bit more about like your approach on there or is it like the services or what do you, what's your take on Nextdoor?
Courtney & Slava (21:11.607)
So it's hard.
It comes from the personal and then also the business aspect. So from the personal, it's very interactive where people are very vocal. It's like another Facebook, but a little bit more up to date into localized groups. So there's one, those groups, and also the communication of people asking about recommendations on dog things or for groomers or for pet products in general. So that's where the one-to-one on just communication with strangers in your community comes in.
to play and you can talk about um, pateek and even posting about that. So if I'm posting like a party or I'm posting in the store or the dog bar on my personal page, I'm seeing the engagement that way. There's on the other end where you have your business page where it's more driven to when we do rescues because that's very like community based or just events for the public so they can see that. It's not like our main primary driver but we can run ads through that that will show up on everyone's individual feeds. But what we did was a lead
catchers so people would be able to come in if they're localized in the community they would come in and maybe redeem a treat or something you know when we first opened we tried the other way where we did the mailers and we mailed out a bunch of mailers to bring in a free treat we're a new dog boutique we just opened bring this in for a free treat but our return of investment wasn't that great to be honest so this has been a lot better for us in terms of not getting lost in the marketplace and really
because it's something unique in those communities too. And I do believe on Nextdoor, correct me if I'm wrong, it's not like Instagram or Facebook. You have to have an address, so it's geo-targeted to that address. So for example, if you're in San Francisco and you want to get Nextdoor account in Los Angeles, they won't allow you to do that. So you have to have a physical address to get you. So what it creates is an authentic community compared to, I could create a business in Kansas right now, Kansas City, and just run ads there, pretend like I live there. Over there, you
Courtney & Slava (23:12.858)
It geo-targets it, so I think that's another, it's more of a niche type of group settings, which you get a higher retention and you get better interactions through there. And believe it or not, before I even joined Nextdoor, I...
was getting recommendations by someone who was also in the mall talking about Nextdoor and everything and then I searched our company in that area because it's geo-targeted to our address and people were talking about it before then. yeah, there's this place at this location or they also throw dog parties or this and that so it was definitely a resource of recommendations that people weren't, you know, seeing on Yelp or Google or you know, the traditional places where you search things of places in the area.
just real-life recommendations by other community members who are within that small route mile radius or maybe up to 25 mile radius that you're in.
David J Bland (24:09.643)
Yeah, I wanted to dig into that a little bit because you're the first first group to bring up next door in our podcast series. I just wanted to learn more about that. I'm sure listeners did, too. Sometimes we hear, you know, WhatsApp more recently and Reddit and subreddit and things like that. But next door, probably people are sleeping on it.
Courtney & Slava (24:26.158)
Oh, we use what not too. I don't know if you, uh, if you're listeners or if you use what not, but that's something that we also do to, um, drive visual traffic, but also just bring more awareness, uh, to the store. What not's really cool. I mean, who doesn't know what it is on this podcast? It's like a Tik Tok shop, but it's a standalone app where you can do live shopping, engage in. what we haven't mandated is for the employees and our franchisees when they're doing it, a creates number one is training. They're physically
talking to somebody for 30 minutes on a video camera, they're selling that product or a membership, and they can go back and watch it, and it's free by the way, brand awareness in your marketplace, you're talking about driving traffic to your store or to your site, which is great. And the third is, if you sell something, it's revenue, so it's not just a revenue side. It's a free platform, and we've really knocked out three things that are extremely valuable to any retail or any business, getting live training in real time. It's awesome, with customers on the other side.
David J Bland (25:25.303)
Wow, you're the first to bring that one up too. So I'm pretty sure you're educating our listeners on what it is as well. So thank you for that.
Courtney & Slava (25:31.598)
Well, I didn't think of it that way, you know, until I was like, what training program could we do? And all of them were like, you know, 500 bucks a month and this and that. I'm like, well, we could sell stuff.
we could get training, the video gets recorded, the employee could go back and watch themselves or the manager and give them tips and improvements and collaborate. I said, this is a win-win-win. everyone else is on TikTok Shop or like Shop Live or TikTok Live. And that's just a scrolling platform, right? You're in between watching TikTok Lives and then shopping and then also just watching TikToks. This one, you're literally just on to watch live shopping. So that was something that we explored. And it's been fun. We've been doing it for the last couple of
And our franchise partners love it when they're getting on it when the first time they say look immediately from day one before you even open your store You get training from day one start talking about your market start talking about your membership start talking about the products even if you don't have any live products you start talking about your market, so
David J Bland (26:26.029)
think that approach, that's fascinating. I was wondering, cause you're in the physical space and I've helped retail companies in the past as well, but kind of tangential to that, I'm up here in Northern California and we had this little like cafe roaster, you know, open about a couple miles from my house. And I came in and I was like, like the, how they designed the actual cafe, it's almost like a...
a honey pot for Instagram. In a way, like there's swings and there's like vines and there's like all these cool little nooks and I'm sitting there trying to work, right? And I'm watching people come in and they literally, I mean, they do buy stuff, but they come in to take pictures of themselves. And I see this at restaurants sometimes when I travel abroad, I see like, we have a swing and a wall and people like sit there and take pictures. I'm wondering like, what's the equivalent of that for what you're doing, you know, because you've designed this experience space and how do you go about?
thinking through or evolving your design or testing different designs. Maybe you share some insights about that.
Courtney & Slava (27:23.598)
So that's
Yeah, so from day one, that was the idea is to create the store, a thousand square foot store, that designed to be a stopper for each section and to be a moment to be captured, shared, reshared on Instagram. So for example, anyone that's listening could go to pubteek.com, do a virtual tour on the website and they'll literally, our current flagship store in Temecula, and go through and be guided through that store. But the first thing you walk in, you have this beautiful custom dog house, everything, we have grass on it, so it looks like
you're in a park, there's a park bench there, so it doesn't feel like you're in a store. Then we have the world's first pup bar, eight inch pup bar with four bowls in there. We serve pup cups, and those pup cups, they're just like crumble cookies. We rotate the flavors every week.
and they're totally free, right? You come in for the experience. We have dog beer and dog wine that we serve non-alcoholic, a little novelty item, and then you turn around right behind you, there's this beautiful photo booth that changes every season, whatever's coming up, and we take a Polaroid, so we try to keep it offline as much as possible. You take that Polaroid, put your dog's name on it, you could take it home with you. We have a star wall, this beautiful star wall, and you could put it on the star wall, and then the entire store is designed that way where if you could, anyone who's listening could do
the tour, the shopping experience is integrated into the wall. So feels like there's no shelves on the floor and everything else. So when you're shopping, it's a very intimate experience. It doesn't feel like you're shopping and there's stoppers throughout the store. So the idea is when the customer stays in the store longer than 15 minutes, their average order increases by 27%. So if they're having a great experience and we add everything, everything's tailored through all these micro moments from the design element.
Courtney & Slava (29:08.65)
intentionally but not manipulative. I think that's the most important. You come into a lot of stores, if you go to Vegas they pump air into, know, oxygen into the vents and everything else. That's not what we created. We want to create an environment that's very photogenic and it creates this flywheel effect that we mentioned earlier by that and then they're doing the marketing for us, essence, you know, for free.
David J Bland (29:33.454)
That's incredible. mean, it almost makes me look at my pet supply shopping in a different light. It's like, no, I'm just going into a big box store now. I just gave a keynote for IKEA and I was talking to them about how they design things and how they test through. And then they're like really, they're really pretty advanced at how they do retail experience and everything. And when I work with big companies, the case study I was talking about, I was talking about another retailer I worked with and the stores are so giant.
and membership-based stores. like you buy a membership as well, which Nero's probably don't, my example. And what I've noticed, and maybe you've thought of this already, there's like no onboarding whatsoever. Like if I was building a software company, I wouldn't just have you sign up and just dump you in and say, go figure it out. Like there would be an onboarding process, right? And I'm noticing with these retailers, it's almost like there was some crazy stat where when a new member arrives,
It's so overwhelming and they don't know where to go and they just follow whatever else people are doing and they'll follow them around the store. And there's something like an 80 % chance of when they come back into the store, they're going to follow that same track. So if they didn't explore like three quarters of the store, they they'll never going to explore. And then the chances of them renewing the membership are pretty low because they didn't get value out of the membership because they didn't explore the store. And like, I know you don't have that scale, but it sounds as if.
just from hearing you describe it. Like you were very thoughtful and intentional about what the experience is going to be for somebody that walks into that store for the first time and what you want them to experience.
Courtney & Slava (31:12.47)
And that's another thing too, we decided, not decided, initially compressed the footprint to 1200 square feet and pack everything in and make that experience touch point. Is we'd rather have more of these compact stores and like you said, is have a 30,000 square foot store, 20,000 square foot store where you're gonna get lost in there. Where the experience should be with short attention spans and uplifting experience for 15 to 30 minutes maximum. And then when you leave, you come back, you get activated again. And the more if you go to your next community over.
we could scale a lot faster than opening a 20,000 square foot facility. You say in Northern California, we maybe could open another one in Southern California. You know what mean? We don't have the compared to where we could break out, break it out into smaller cities and smaller communities.
David J Bland (31:58.84)
So we talked about how you approach this. I think you're being very thoughtful. And of course you learned some hard lessons along the way, doing things that maybe were a bit scattered and just trying everything and seeing what works, which I mean, obviously we all do. What is one thing you thought was like a sure win, but then it just kind of fizzled out. Like it wasn't exactly the way you wanted it to be.
Courtney & Slava (32:22.395)
That's a good question. I think the sure win is
from the very inception, real estate site selection. And I'll bring it up to that is thinking you know where the customer lives and where their psychographics are, what they believe, their behavioral patterns, not just their demographics. You can look at demographics, their income level, their age, their sex and so forth, and it could hit everything. It wasn't a mistake, but we went into a place where we thought our customer lived there. There was a William Sonoma pottery barn, and it was within the traditional shopping center that was outside. You know, and we found out really fast
that obviously the psychographics, yes they have the belief system, but they're gonna go there once a week or twice a week max for entertainment type of malls at that point where I would just say they're being repositioned, right? They're being more experiential, they're being more thoughtful, they're bringing things in your traditional mall. So I think that was one of the things where we found our customer on a daily basis is in the Whole Foods, obviously plazas, in the Vons, things like that where they're going there daily for their daily activities.
So I think that was a, I wouldn't say it's a huge miss, but it was a great learning experience to understand. This is for everyone listening.
You could, your brokers or if you're going to brick and mortar or if you're opening anything else, a restaurant is, you can have the best demographics in the world, but if you don't know your psychographics, which is how they behave, what they believe, and that could change by the way too, really quickly, and it has, right? In retail and restaurants, we're seeing Q-A-SAR dying off, not dying off the vine, but people say, I don't really wanna eat fast food as much anymore, or I don't wanna drink alcohol as much anymore. So how do you make that adjustment? I think it's really important too. For us it was the real
Courtney & Slava (34:06.544)
state site selection I think that was kind of it was an amiss it was just something where we didn't think that through because we just wanted to open the store.
David J Bland (34:15.935)
Interesting. Yeah, I'm sure our listeners can learn from that. And I'm wondering, you mentioned, I feel like you have a lot of quantitative information for what you're doing in retail. For the qualitative side, you talking to customers, what are some things you do? Maybe Courtney, you can explain, you know, are there situations where you're talking to them or interviewing them in the store? Are there ways to get that feedback and kind of understand not just the what, but also the why?
Courtney & Slava (34:40.95)
I think from that standpoint, far as like interacting with the customer, since we have a membership and we've been going back to the retention aspect that we've had our members stick with us for some of them now up to three years in just one location is that they are very open in providing feedback. But all the conversations and all the feedback that we do get, it's really transparent. Customers and members are not afraid to share how they're feeling and how
and what they want to talk about. And I think one thing is because we've created that welcoming environment from the beginning. You know, we always...
Say we're different and we are different because of the hospitality aspect and i'm not saying that because I am a part of pup teak. It really does make a difference from how we train our staff to our experience and our Staff got trained by the ritz-carlton management and got to work with them as well So they got a whole experience on how to greet the customer how to talk to the customer how to make the customer feel very welcome So that was a huge part in terms of the retaining aspect of a customer but I think from the feedback aspect and
keeping an open feedback loop, it's really keeping it transparent. And of course you're gonna have those customers that come in and they want to complain about everything and you work through that. But... Well I think one of the things to get feedback loops on is, we've done this, is through the customer journey. Our customer journey, it looks very nonchalant and fun and everything, but it's extremely, extremely intentional and it's rehearsed, it's practiced. It's like a production, right? We have, what we've implemented is super on that.
our customer journey, surprise, unique, personalized, engaged, and repeat. it's from, literally we have zones for zone one being the greeting and welcoming everyone consistently 100%. And through that entire thing, you're discovering about the customer, right? And you're personalizing it you're engaging and you make it unique. These are all touch points throughout this customer journey. And at the very end, we do another greeting of thanking them for coming in, right? And then we do intentionally, we now implemented receipts. thought, and the receipts, the paper receipts are not there for fun.
Courtney & Slava (36:49.432)
and then yes, someone wants receive, but it's the last touch point. They could write something, they could be thoughtful about it. So all these little micro touch points, that is feedback loop that we get, and it creates that much more of an LTV, right, for the customer to come back and share that story, hopefully, in their community.
David J Bland (37:05.995)
That's impressive. go ahead, Courtney.
Courtney & Slava (37:08.41)
no, real quick, one thing that we did learn and I think other listeners can learn from as well, so we had a monthly membership and we thought that monthly membership would do so well. We thought it, for us, like, why not? This is a great value, like, how do they not see the value in this? And we kept pushing that and one of the consultants for the membership company we work with, she broke down the number, she's like, you know what?
just stick to the annuals. And since we've stuck to the annuals, it's shifted our whole entire approach, but also it's allowed us to retain the customer longer.
as well, because instead of just having one customer sign up because of a discount or to sign up because of another reason, that's just one purpose. Now we have a customer who's our deal customer that will see the value and also create that flywheel effect for the referral aspect as well as just the membership aspect in general. But that was a huge lesson we learned.
David J Bland (38:10.23)
Thank you for sharing that. feel as if...
you know, the membership does unlock things for you. So for example, when I was consulting with more like bigger retail companies with memberships, we could do things like, I mean, granted, it's a longer test, but we could say, hey, how did people who went through the onboarding versus the people that didn't go through the onboarding, how did they renew? Like what was the, you know, a compare and contrast there? Also, you know, what size of cart, you know, for people that went through onboarding, is their size of cart? So there's some really interesting things you can do.
Granted, annually it might take a while, so you need leading indicators that like, can I predict that person's going to renew or maybe not? But it feels as if because you have kind of this testing mindset or this analytics mindset that you can do a lot with that and it helps inform your direction a bit more than just say a retail store without, that's purely transactional with no annual membership.
Courtney & Slava (38:47.031)
Yeah.
Courtney & Slava (39:06.892)
Well, I think one of the things is...
majority of brands make, and this comes from the top because it's so much pressure, of the stock price, or if they're public or if private, for growth, because of investors, is when it comes to memberships, and we train this and rehearse this, is when it becomes a cost, an expense line item, instead of an investment, and you can communicate that, you breathe that, and you do, hey, this is an investment, here's what your return is gonna be on that investment, X, Y, and Z, and here's what the potential could be, and for example, I'll give a story to listeners, we had two random people walk into the store.
woman and a guy. They come in a year ago. Now they sign up for the membership. did one event together with their dogs. They started talking. Now they're getting married a year later. They're having a child together. Right? is that, and we laugh about it, is that investment worth it? So you gotta paint the picture as if you think it's just a cost for that member.
you're going to have a hard time because that's the entire personality and the staff members will say, but if it's an investment and you're providing value every single visit, people will feel that and that vibration will be translated. But you don't have to be a member to shop with us. That's something that as a member, you get added benefits to attend events and get the added discount, which of course we still have that customer that shops with us that's not a member and will still come by and enjoy the space and have their dog.
enjoy the pup cup. But I think that's the shift to make, you know, from a expense cost to an investment ROI for the member.
David J Bland (40:38.112)
Yeah, it reminds me of I've been reading the pre-release of Eric Ries's new book, Incorruptible, and he goes through all these stories about how people tried to build companies and then they weren't set up in a way with governance and everything. And he's got a lot like a big list of why. But then they can't really serve the customer or it gets like a hostile takeover or something happens. it just no matter how hard they tried, it wasn't hardened enough to be able to like
push back against all those forces. And just hearing you speak about how you're treating the customer and how the customer is at the core, I find that you're building something special. I'm wondering, what gets you really excited in the future? Some things you wanna test, where you see this going, it could be franchise related or store related. What is something that gets you all excited about, I'd like to go test this next?
Courtney & Slava (41:32.15)
Yeah, mean, high level big picture is.
There's gonna be much more dog owners, but there's 70 million dog owners, right? Our store, for each location that we open, we want to service 200,000 people, right? The service of Mark in that area. Those are just dog owners. So we have the ability to potentially, into the US alone, to service 140 million people. Obviously one or two dogs they have, and then we'll add other animals like cats into that, hopefully down the road. But that, think, is really exciting. And the thing is, we could do it really quickly.
and swiftly through the franchise model growth vehicle much faster than we would three of a VC type of approach where it's all in-house. So that's I think the exciting part about it is and using it consistently we've simplified the entire model and we always talk about the simplicity when you know Chick-fil-A does not sell hamburgers and In-N-Out doesn't sell chicken sandwiches. They're the best in the world of what they do and they're the most successful in what they do because they're so hyper focused. So I think that's an awesome opportunity if you look at the big
landscape how massive the TAM is and we have a SAM figured out for each community. I think it's fun that's what makes it really fun.
This is more big, big goal, but I did see on LinkedIn today that Petco released some, they, talked about their jet and they said, our partnership with Jetsuite or whatever it was. And then it just clicked in my head that someday very soon, Puptqe will have its own jet to launch. So dogs can get on there as Pup Pass members and be able to explore all the other Puptqe’s across the country. but last month we launched something called the
Courtney & Slava (43:19.472)
Pup Pass Passport, which is basically a passport for dogs that has different stamps. the more locations we open, it's a destination stopper, but every time they visit the Pup Bar, attend events and so forth. But from that passport, that really sparked and I saw that LinkedIn post and like, this is the motivation. Like if I don't see anything more clear, it's like this is a sign that this passport and all the Puptqe across the country, it's gonna happen.
David J Bland (43:46.538)
I appreciate the big vision. It's like big vision tested small, know, like, keep the big vision. So, I mean, we've, go ahead, go ahead.
Courtney & Slava (43:50.296)
Yeah, but I think, yeah, go ahead. No, I think the vision when it comes into place, it's having that in mind and always communicating that to your staff because at end of the day, it's easy to get stuck somewhere or have weeks or even months out of, it looks like nothing's moving forward, but I think the hardest thing is the consistency day in and day out and doing stuff that might look boring and it is boring, but I consistency with grit and obsession always wins.
David J Bland (44:19.052)
I think that's a great wrapping point for this one. I just want to appreciate you, know, hanging out with me. I was looking forward to this for a reason. I knew it was going to be a great episode. You all went through, you know, your previous journeys into this amazing cause of what kind of prompted you to create Puptqe and how you're thinking about it. You're very thoughtful about it. It sounds like you're very open minded in how you're approaching it. I'm wondering if people are listening and they want to reach out to you and would love to connect with you, what's the best way for them to get in touch?
Courtney & Slava (44:25.964)
I'm out.
Courtney & Slava (44:49.342)
The best thing is through the website is puptqe.com, P-U-P-T-Q-E dot com, through the contact page. We're also just launched our franchise and we have a lot of franchise partners coming on in Texas, California, Florida. And we're looking for great partners that understand the same thing, community based, want to have the entrepreneurship freedom with this uncertainty that's going on with AI and what's going to happen. So we're looking for folks that want to be the community ambassadors and activators.
the mayors of their town, to speak. And that's really fun and finding those candidates and those folks now, it's been really, really, it's a joy and it's been exciting.
David J Bland (45:30.653)
So if you listen this episode and you want to reach out or you're interested in franchise then get in touch with Courtney and Slava. I want to thank you so much for hanging out with me today. I had a great time and I'm sure our listeners learned a lot about retail and how to think about it in a slightly different way and test their way through it. I just appreciate you and thank you for your time.
Courtney & Slava (45:46.508)
Thanks David.