For the past four or five years, my friend, Jason, and I have been selling swag merchandise to people who play in our beer hockey league.
One year, we decided to sell hoodies thinking that every guy needs another hoodie. We sold 30 – a 25% penetration rate.
The next year, we offered toques. We sold 30. The year after that, we sold 30 zip-up sweaters.
It was like pulling teeth. No matter how hard we tried or what we tried, the results were the same. Okay, but not great.
After so much effort and so little to show for it, we decided to end our days as swag guys.
Then, Jason decided he wanted to take a final crack by selling baseball hats. At first, I was skeptical: once bitten, twice shy. But he’s a salesman so I signed on for a final kick at the can.
To drive sales, we made a big change in how we sold. Rather than taking orders, we purchased 50 hats. We figured that sales would be easier if the product was immediately available.
Much to my surprise, the hats are a major success. There are people making purchases who have never bought swag from us. It looks like inventory will be gone in a week.
So what are the key lessons?
First, you need to talk to potential customers even if you already have in-depth insight. As members of the league, Jason and I figured we knew what people would want to buy. Wrong. We knew what we wanted to buy but didn’t do enough research to see if there was broader demand. In other words, we had to create buyer personas.
Second, get a handle on whether people really need the product being sold. In hindsight, we should have known that most guys don’t need another hoodie, toque or zip-up sweater. They probably had a couple in their wardrobe so there was no need to buy another one. On the other hand, baseball hats are different. Most guys have many baseball hats and, as important, they’re willing to expand their collections if a hat looks and the price is right. With the hats, we achieved product-market fit.
On the other hand, baseball hats are different. Most guys have multiple baseball hats and, as important, they’re willing to expand their collections if a hat looks and the price is right. With the hats, we achieved product-market fit.
It explains why sales have been easy compared to previous efforts. We’re finally selling something that people want to purchase. At $15, it’s a no-brainer to buy a new hat.
Third, it makes sense to have inventory rather than make people pay and then wait a few weeks for their product. It’s about instant gratification. As important, we are selling a one-size-fits-all product. There are no issues about different sizes, which makes things easier for us and our customers.
Fourth, persistence pays off. Jason and I could have given up after only having modest success. But we decided to keep going, which is a key characteristic of many entrepreneurs. You battle for a long time looking for better days, which could be just over the horizon.
And along the way, we learned some important lessons. I’m not sure we’ll selling more swag but it’s nice to discover success.