It seems every day you see more businesses adopting the subscription model that Netflix made famous. For example, instead of buying a car, you can pay a monthly fee to ZipCar and use one when you need it. And as more people get comfortable with subscribing to products instead of buying them, nimble startups and entrepreneurs have more opportunities to create unique businesses that fit the lifestyles of today’s customer.
The Tie Society is one of those startups leveraging the subscription model to change the way people get ties. Co-founder and CEO Zac Gittins and CMO Jake Kuczeruk, joined me to share their experiences in getting people to give up on buying ties and subscribe to a tie-sharing service/community.
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Small Business Trends: Can you tell us a little bit about your personal backgrounds?
Zac Gittins (pictured left): I grew up in Washington, D.C. and ended up going to Bowdoin College in Brunswick, Main. From there, I got hired at IBM. I graduated with a major in economics and computer science. IBM was kind of a perfect following and a career move for me.
I probably borrowed a couple of ties from my dad on my first day. Then, once I got my first pay check and bonus, bought a bunch of ties and suits. But after a while, everyone at your office has seen all of the ties you own. If you want to expand your professional wardrobe, you need to buy more ties or shirts.
I realized this was a problem that not only I was experiencing, but a whole group of my friends were experiencing it too. It got to the point where we actually all started meeting up on weekends and exchanging ties. From there, we realized that there was something there. Eventually, that led to Tie Society.
Jake Kuczeruk (pictured right): I went to Indiana University. After that, I worked at commercial real estate for a little while and I was in suits and ties Monday through Friday. After that, I ended up having the opportunity to move out to San Francisco Bay Area to join a startup company. After that wrapped up, I ended up working as an account manager for a little while. So I got back into that suit and tie Monday through Friday again, then ended up at the Tie Society after meeting Zack in an elevator at the 500 Startups and got started talking ties.
Small Business Trends: I think I might have read somewhere where you call yourselves the “Netflix For Ties?”
Zac Gittins: Yes, that is exactly what we are trying to build the concept around. We like to think of it more as an online closet. Imagine, if you had this website where you go, just click clothing items and then a few days later they show up at your door. That is what we are building.
Small Business Trends: Why do you think this is the way to go today compared to the more traditional way of selling ties?
Jake Kuczeruk: Honestly, the best way to look at it is the Blockbuster example. People aren’t going out there buying DVDs anymore, because it just didn’t make any financial sense. Ties enjoy one of the most healthy markups of any menswear item hands down. I mean, there are ties that you pay a couple hundred dollars for that cost manufacturers just a small faction of the overall cost.
Anybody who enjoys a good value can see the benefit of the Tie Society. You can either pay $20/month to buy one single decent quality tie, or you can spend that same $20 on one of our plans and end up with 12 to 15 different ties per month. You can have a fresh item every single day of the week.
It just does not make any financial sense to buy ties ever again.
Small Business Trends: Have customers quickly adapted to this model?
Zac Gittins: There was a bit of a learning curve. I think it is one of those concepts that, when you first hear about it you’re like, ‘Oh, that sounds interesting.’ Then a day or so later, you’re like, ‘Wait, what, really?’ And then you actually experience it and it hits you, ‘Wow this is amazing!’
So for a lot of our customers, I think at first they are like, ‘Wait, can I really wear this and send it back and get something else I don’t have to pay a return fee on? I don’t have to pay for any shipping? How is this possible?’
We are working on making that a more seamless, understandable experience. But that is exactly how we operate and our customers have really appreciated it.
Jake Kuczeruk: We take tons of extra steps to really ensure that we can provide a level of online support that you’ll not find in a physical store, like at Nordstrom’s for instance. We provide free 100% percent style advice to all of our customers.
I have guys that I speak with on a weekly basis, who literally send me pictures if they are at the store and ask, ‘Hey, I am going to buy this suit. Can you recommend a few ties for it so I can put it in my cue when I get home?’
We try to take that extra step, we also try to replicate some of the in-store experiences as we will be launching a virtual free try on very shortly on our site as well.
Small Business Trends: We know that customer satisfaction is important, but how do you measure how this model is working for you?
Zac Gittins: We use a couple of metrics that we track about how happy customers are. A lot of that is on shipping volume. How many packages we ship in a given month and on a given week. If we know customers are actively using the system, that tells us that they are generally happy and fully engaged with what we are doing.
We also track the amount of time that people spend on our website and what ties they are picking. We can spend an entire call talking about analytics that we are rapidly collecting on all of our customers to really help us keep our finger on the pulse of our system. But for Jake and me, I really have to say it’s the customers’ feedback and the engagement we get from them.
Like Jake said, any time a guy, one of our members, calls us and asks us what he should wear with one of the items that we have on our site that tells us it is working. That tells us that we are really connecting with these people.
As far as our company, mainly Ties Society, the Society part was not an accident. That’s really what we are trying to build. We are chasing that online closet concept, but we are also trying to build a membership group for guys who really care about their appearance.
Small Business Trends: It sounds like the key to your business is getting traffic to the site; getting eyeballs to the site, letting people see what you have available and then getting them signed up. How do you go about driving that kind of interest from a marketing perspective? What role does social media play in helping you do that?
Jake Kuczeruk: Social media definitely is part of what we do. We sponsor and endorse an MLS player, a Houston Dynamo player, Mike Chabala. He is actually part of our team of endorsed athletes and public speakers. Guys from around the country who wear ties everyday but come from different walks of life, have different careers and different focuses. He was a guy we engaged on Twitter and it is definitely social. It is very valuable.
We do create an opportunity to get in touch with our members and really hear their needs and their concerns directly. We even have members submitting pictures of themselves wearing different outfits with each tie to help other members decide what looks best.
Small Business Trends: I want to hear more about the 3D thing you mentioned.
Jake Kuczeruk: Basically, we got in touch with a company and what they do is provide this new technology that literally maps the human torso and allows you to swap different shirts with different ties. So you basically have the understanding before you rent an item from us as to how it is going to look with the items in your own closet.
Small Business Trends: Zac, where can people learn more about what you guys are up to and where can they go and get a subscription?
Zac Gittins: People can go to Tie Society. We are also active on any social platform that you can think of, thanks to Jake. Facebook and Twitter are great places if you want to talk to Jake directly. You can always reach him there. We are both active there. If you are looking for inspiration on how to dress well, we also are active on Pinterest, Instagram and several other websites.
Jake Kuczeruk: If anybody would like to shoot me an email, firstname.lastname@example.org. I will be sure to hook you up with a discount or a free one month trial of our service.
Small Business Trends: That is great and I am glad you mentioned Pinterest and Instagram. I would assume that in your line of business, that’s got to be pretty big.
Jake Kuczeruk: It is absolutely huge for menswear to be active on Pinterest. Actually, it is something we make an effort to update everyday and we have been rewarded with over twenty million impressions alone.
This interview on the subscription based business model is part of the One on One interview series with thought-provoking entrepreneurs, authors and experts in business today. This transcript has been edited for publication.