How Big Island Coffee Roasters Took Their Business Online & Collected Over 18,000 Leads

Josh: Hi all, welcome back to KickoffLabs on Growth. It's been a while and I'm sure a lot of things have changed in your life in the last couple months as well. I'm currently recording this introduction in the basement while my kids are remote learning upstairs. I love the interview you're about to hear because the story of an entrepreneur who had their business model thrown upside down by the pandemic and had to successfully shift her primary revenue source from a wholesale business to business model to an online consumer sales model. You'll learn what went into that transition and how we, at KickoffLabs, were able to help. Enjoy the show.

Josh: Hey, we are live and today I'm talking with Kelleigh Stewart. She is the co-founder of Big Island Coffee Roasters. I saw from her email signature she also won the 2020 Hawaii Venture Capital Association Consumer Packaged Good Entrepreneur of the Year Award. She's also responsible for running a KickoffLabs campaign for her brand that captured over 18,000 email addresses for their digital storefront. How are you doing today Kelleigh?

Kelleigh: I'm doing well, thank you. I'm happy to be here.

Josh: You talked about before I hit record I'm super excited to talk to entrepreneurs like yourself that are running a physical product business, because you guys are way braver than me. I just sell bits and bites online and try and turn it into money, but you've got to deal with the physical creation of the product, the packaging, the shipping, the farmers probably. I don't know, what's the biggest headache you guys have had?

Kelleigh: Oh my gosh. Well we started this business, it wasn't intending to be a business, it was intending to be a lifestyle. We moved to a farm that happened to have coffee growing on it, and then the opportunities kept coming to us and we kept grasping at the opportunities that came to us, and so the business built itself. Yeah, as far as challenges go, everyday it's a new challenge and that goes from learning about coffee, handling farmers, building a vertically integrated coffee roasting and processing center, learning about marketing. So yeah, there are a lot of challenges.

Josh: That's a little bit of the challenges, and we'll go back to some of that in a bit. For right now I'd kind of like to discuss what kind of success you guys have had in business in the last year or so.

From the beginning of the year until now we've actually grown 460%.

Kelleigh: Yeah, yeah, well you know we were trepidatious I think as everybody was with COVID and we didn't know what it meant for our business. Pre-COVID we did about 75% of our sales volume was wholesale to resorts like the Four Seasons or to Dean & DeLuca were serving specialty Hawaiian coffee from all over Hawaii, to resorts and retailers. And COVID hit and of course tourism died in Hawaii, and Hawaii's a huge part of our market. I mean our retail market's about 90%, and when tourism dried up wholesale and retail totally dried up. And so with that being said, we were ready to move right into ecommerce because we love ecommerce, we're on a remote island in a remote area of a remote island, and so it just makes sense to be a little bit more ecommerce savvy. We dipped a little bit one month when COVID hit, but from the beginning of the year until now we've actually grown 460%.

Josh: Wow, that's an amazing bit of growth there.

Kelleigh: Yeah, yeah, and right now we are actually doing the same sales volume as we were pre-COVID, which is huge. And so while our ecommerce has grown tremendously of course, our wholesale took a dive, and then its slowly been climbing back up. But after experience this ecomm burst reorganization of our business, we love it. And so it changed our minds about what we wanted to do with the future and where we wanted to direct our business.

Josh: Yeah, that's a really great story. I mean you looked at it like there was this challenge and your source of sales going wholesale to hotels kind of started to slow down. I imagine, like you said, with the drop in tourism and you guys said, "Hey, where else can we get sales? We could go direct to consumers," and so it's amazing what you've been able to build up to replace the wholesale amount and it sounds like grow on top of that going forward. If you get the wholesale stuff back then you've added a whole new aspect to your business that you didn't have before.

Today we're 87% ecommerce, our margins are way better, we're actually working less and we have better capacity.

Kelleigh: Oh absolutely. You know it's like the margins in Hawaiian coffee, you look at the price of the product and you think, "Oh these people who are selling it they're making a lot of money." But I tell you, I never see farmers. Farmers don't make a lot of money, and there's not that much money in the processing of it either. And so while it looks expensive it's actually a really low margin business and so we need to capture as much margin as we can so we can continue to purchase the inventory. And so pre-COVID we're 75% wholesale, we're getting a lower margin on our product, and post-COVID... And we're working our tails off to get the coffee on the shelf, to deal with our wholesale accounts, stockists, brokers, all the things in between the customer. And today we're 87% ecommerce, our margins are way better, we're actually working less and we have better capacity, and so it's like whoa, mind blown experience. This is just great for us.

Josh: Yeah, and it's obvious to me that you guys are putting a lot of effort into it. One of the signs I saw, it's just a little thing, but when you emailed me back about the interview, about posting it, you said, "Hey, by the way, my SEO person wants to make sure that when you link back to our company that you use the following keywords." When I see things like that from founders I always think, "Wow, there's somebody who's taking advice from a bunch of different people and crystallizing it and making it real and taking every advantage they can." It's a little tiny thing and you could have just ignored it or not thought about it, but you passed that on, and so it becomes obvious you guys have been working your tails off, as you said, to promote the online store.

The second step was building out an email series based on the questions that we've received in the past.

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Josh: Which leads me to my next question, which is what are some of the things you did that have worked really well to get the ecommerce side of the business off the ground? It sounds like it was a very small part of your business before, and now obviously it's a much larger part of your business. And so how did you go about ramping that up because we all know you didn't just put up a website and say, "It's for sale." It didn't work like that.

Kelleigh: Yeah, you know we only got on Shopify in February. Prior to that we were on Big Commerce and WordPress, and so the tools in Shopify, which I really love, made it a little easier for us to access the analytics and grow. We're also in the Shopify for startups, incubator, so we get a lot of resources through that. So that was the first step. The second step was building out an email series based on the questions that we've received in the past. We've been in business for 10 years, and so we have 10 years of customer engagement to pull from the questions that we typically get. What water temperature should I brew with? What's the difference between Kona coffee and Ka'u coffee? What is the processing method? How should I store my coffee?

Kelleigh: And so we built out this 10 email series that goes through a lot of customer education. That happened to launch just about the same time that COVID hit, and so we got a little bit into COVID and this is actually how we... this is the story of how we came to KickoffLabs. We have a big wholesale account, it's the airports here in Hawaii called DFS, and they placed very large orders. And it takes us a little while to process the orders, literally we don't have roasted inventory. We get an order from a retailer and we go, we pick up the raw coffee from the farmer, we mill it, we grate it, we sort it, then we roast it, apply barcodes to the bags, package it, and then send it off. So there's a ton of work involved when we get these big orders like this.

What do we do with this coffee now?

Kelleigh: And so the coffee is ready to be picked up by the retailer and then they tell us that they've shut down and that they won't be accepting the coffee. And so we have this huge order, we're like, "What do we do with this coffee now?" And so we came up with the idea of doing a giveaway. We're like, "Well how can we really do this giveaway?" Well let's try this KickoffLabs. So we called it Aloha at Home and it was a 30 day giveaway. Everyday we gave away a bag of coffee from that lot. Now you could say that we could just resell that coffee, but there were a couple issues with that. One is that our promise to our customers, no matter how you order from us is that we don't sit on inventory so you don't get stale coffee from us. Number two is that it's in a different size bag then we sell on our website. And number three, they all had barcodes attached and some of the products aren't even products that we sell on our website.

We only stopped because things were getting so busy for us that we couldn't manage it all.

Kelleigh: And so we really didn't have anything to do with this coffee so we're like, "Well lets just generate engagement from people and enthusiasm," especially in this time when everybody's indoors and they're scared, and lets use this as a reason to get people motivated and excited to brew coffee at home. We just took this inventory and we started giving it away through a KickoffLabs campaign. 30 days in went really well and we were very surprised at the growth, and so we're like, "Let's do it for 40 days. Then let's do it for 60 days." We just kept pushing it and we only stopped... We still have some of the roasted inventory, but we only stopped because things were getting so busy for us that we couldn't manage it all.

Kelleigh: But yeah, we definitely could have continued to grow. That was big in our transition. We acquired over 18,000 leads, not all of those were high quality leads of course, but you can definitely see the difference now in our email campaigns when we have a new product that we pull in and we push out an email. Our sales have quadrupled because our email list, even though not all of them are high quality leads, it's just a wider audience.

Josh: So you mentioned 18,000 leads and creating a wider audience. How many email addresses or leads did you have on your list for your store before you did this giveaway and campaign?

Kelleigh: I think we had 9,000.

Josh: Okay, and then what did you do to... I mean it's a great idea. I mean you had this excess inventory, it didn't really fit with what you wanted to sell and the products you really wanted people buying online, so it's a great idea to create a giveaway and giveaway if you've got some excess products like that. And so my question is what did you do to promote and market the campaign? Did you just send an email to the 9,000 people you already had or did you try other things to market the campaign?

Kelleigh: Well we started with an email to the contacts that we currently had. That was strategy number one. And then we started partnering with other Hawaii businesses to give away gift cards from their company as well because we're all experiencing the same thing, a lot of the industry here is reliant on tourism, and in addition to that, we have now one of the lowest, one of the worst economies in the United States because of COVID. So there's a lot of us that are in the same position. And so I think we got around 10 or so different entrepreneurial companies to do this giveaway with us, and they promoted it as well to their followers. Then we went to Facebook after that.

Josh: Sorry, do you happen to know about how many followers they were promoting it to or did you have any idea when you partnered up?

Kelleigh: I'm not sure how many followers. Yeah, I don't know.

Josh: How did you find these ideal partners? I can see them on your site. It looks like a bunch of also kind of local to Hawaii brands, so I'm curious how you found all of them. Are these people you knew, contacts you had?

Kelleigh: Yeah, we're all in a group together. We're all local Hawaii entrepreneurs together that are in its like an accelerator group, well it was an accelerator but were portfolio companies of a larger accelerator organization called Mana Up.

Josh: Cool, so you were saying after you partnered with them and got the word out to their customers as well about the promotion, what were the other things you tried that worked or didn't work?

We only spent a few hundred dollars on Facebook ads

Kelleigh: Yeah, we threw a few hundred dollars into Facebook and then we were partnering with a subscription box and a subscription box put out a email about everybody getting a product from us in their subscription box and so we said, "Hey, you know in this email do you think you could include a link to this campaign that we're doing?" We had the opportunity to drive them to our website but we though, "How many of these people are actually going to convert? We don't really know." They already got a product in their box. They may or may not purchase from our website, but we think that it's more important to drive them to our campaign so we can control the communication with them then it is to try to get them to purchase a product.

Kelleigh: And so we drove them to the KickoffLabs campaign, and yeah that's what we used, that's what we used. So as far as marketing goes and dollars spent, I think we only spent a few hundred dollars on Facebook.

Josh: Mm-hmm (affirmative), and what kind of communication did you have with people on your email list during the campaign? You started with 9,000 maybe in the first 30 days, it was working well so you got a couple thousand people I imagine. Were you doing communication throughout the campaign to the list to remind people about the campaign?

After 90 days if they're not opening the emails, if the only thing that they're interested in is knowing whether or not they won the campaign, then we just removed them from our list.

Kelleigh: No, you know we only promoted it once to our email list, and I think we got maybe 3,000 or so leads from our list. But what we did our email provider is ActiveCampaigns, and so instead of using KickoffLabs email, we used Zapier to connect it to ActiveCampaigns, and then built out an automation in sequence within ActiveCampaigns that thanked them for entering and then we initially tried a discount code to see if they were interested in order and then we started just doing AB tests within there. Gave them an offer for a 13 page brewing guide. Yeah, so we tried different things within there to continue that engagement. And like I said earlier, some of those leads weren't high quality, so we gave them about oh I think it's 90 days and we filtered through their engagement level for the course of 90 days, and then after 90 days if they're not opening the emails, if the only thing that they're interested in is knowing whether or not they won the campaign, then we just removed them from our list.

Josh: So basically after the campaign you did some follow on engagement, broadcasts out to the list and emails, and you were sort of seeing how engaged people were after the fact.

Kelleigh: Yes.

What was the best part about using KickoffLabs? The engagement.

Josh: Okay, so what was the best part about using KickoffLabs to run the campaign you guys ran?

Kelleigh: Oh it was engagement. Well actually you know what, there were a couple of things. One was that we didn't really have to spend much money on advertising because of course you've got that virality component and it was exciting to see those numbers just rise exponentially, the leads rise exponentially without having to spend really that much in advertising. The Facebook ads were just like people were sharing them. So that was exciting. But another thing that was very helpful for us is that we asked for an Instagram profile upon entry into our campaign, and the reason that we initially did this is because we're giving away gift certificates from some of our partner brands who sell products that are really... You want the right demographic for it. It's baby blankets so you don't want that ending up in a teenage boys hand, or lipstick, or whatever else all these other brands.

Kelleigh: And so we wanted to kind of make sure that these products were going to the right people. And as we started looking at some of these Instagram profiles we noticed that we were getting a large volume of people that were chronic sweepstakes people. What they do is just enter sweepstakes and they try to win things. I'm happy about this, I'm glad about... We had never made a commitment or anywhere in our KickoffLabs campaigns that the winners would be those with the highest lead points. We were able to make sure that the products were going to the right people, which were the people who we thought might be interested in Hawaii, that might be interested in the partner gift products, and that our coffee was some of the most expensive coffee in the world and these boutique items aren't going to a person that also just won a barbecue and a box of Tide.

Josh: Yeah, I'd never realized until we started running this business, how large that community was. There are those people out there that do it.

Kelleigh: Yeah.

Josh: And spend their days looking for new things to enter.

Kelleigh: Yeah, yeah, it's fascinating, and as we really started filtering through these Instagram pages we were like, "Oh wow, oh my gosh." Yeah, and so I think at some point you can't have these campaigns that go on forever because you just get more and more of those people, and so I think it's good to have a campaign, pause it so that those leads die off, and then initiate a new campaign down the road.

Josh: Yeah, that's a fairly common thing that we see with a lot of businesses with existing stores is that they'll do a campaign once a quarter or once every six months they'll run a one to two month campaign, and then they'll pause it and then they'll reset it again based on what worked well last time. That is a good practice that's pretty consistent. So would you say that was kind of the most challenging part?

Kelleigh: I would say that was the most challenging part, yeah, yeah.

Leave it open as to how you choose the winners

Josh: So then kind of a related question. What advice would you have for people that are looking to run a similar campaign where they want to grow their email lists and grow their audience?

Kelleigh: I gave this advice actually to one of our partner brands who saw what we did and saw how successful it was and started to recreate it, and I'm pretty sure they also used KickoffLabs. I'm not positive but I'm pretty sure. Told them to get an Instagram profile, or some kind of profile, and to leave it open as to how you choose the winners if you were going for long-term engagement from the people who win the products.

Josh: Mm-hmm (affirmative). Yeah I mean I think what you did is a good best practice because what it says you're not promising how you're picking them, you're just saying, "Enter to win." And you might be giving people extra chances to win or extra entries with the actions they would take, because I looked on your thank you page it looked like you were asking people to email a friend, to like on Instagram, to follow some of the other brands online for additional points, but you weren't making a commitment that the people with the most points won. So that probably gave you the ability to just go through your lead list in KickoffLabs each day when you were picking a winner and pick people that seemed like the best people to send the coffee to.





Kelleigh: Yeah absolutely. Of course we started with those who had the highest leads and initially, in probably the first 15 days before the contest people really caught on to the contest, we were picking those which had the highest leads who are authentic. But pretty soon that started getting filled with contesters and sweepstakers. And so then we began filtering down and just choosing people. But what was cool about that is that we got a lot of responses from people who were like, "I've never won a contest before, this is so exciting. I can't believe I won," and that was actually thrilling and heartwarming for us.

Josh: It's really cool, and the thing that you did that you got out of the campaign too I imagine, is going through some of the profiles, especially of the people who were valid who entered, who had a fun Instagram address, is you probably got to know some of the people who are potential and eventual customers better than maybe you knew them before.

We do handwritten cards here, especially to new customers

Kelleigh: Oh absolutely, absolutely. Some of those names we remember, and so we'll see their repeat orders, they were exposed to us, we learned about them, we know now that they have kids, they like to surf. We do handwritten cards here, especially to new customers, and so sometimes if we'll see that person, these people who we now know what their lifestyle is like. They just got married we'll give them a congratulations or something like that. That might sound a little creepy to folks on the mainland, but in Hawaii people are very close. We have a strong community here, and so it's not unexpected that you would have a strong relationship with a company on your island.

Josh: No, absolutely it's not creepy at all. I think it is another one of those things that I hear when I interview people that run successful campaigns is whether it's during or after the campaign it's common for people to be reaching out to folks on the list that maybe they hadn't met before that are like, "Wow, you actually got three other friends to sign up. Tell me a bit about yourself." They'll reach out personally and get engaged with people during or after the campaign, and both learn a bit more about their customers, but also create these relationships. Some people go so far as to create a private group just for that group of people to say, "Hey, we're thinking about this new roast of coffee, what would you think?" And so they'll create these little private groups out of them.

Kelleigh: Yeah, yeah totally, totally. That's something that we've been kicking around as far as customer engagement to another level.

Josh: So what are you looking forward to in the next year with your business? What's next for you guys?

Kelleigh: Oh gosh, well we have a strong holiday campaign that we're doing. We're putting out gift boxes, which is exciting. We're putting more swag. We have coffee club with a coffee club concierge, and we've got some really just exciting products coming out. We're also looking into doing another KickoffLabs campaign either this holiday season if we have the bandwidth for it, 12 day giveaway is what we were thinking, and if not this holiday season then maybe next Valentine's Day. Something a little bit more I guess controlled. I like the idea of the... and I'd heard it on one of your podcasts, getting a different gift for each level or referral, and so I'd like to try that.

Josh: Yeah absolutely, we've got something coming out too that might be useful to you guys if you're on Shopify where we could give people additional entries for actual money they spend on a store. So if they're ordering a gift they can get some entries into the contest or reach a higher reward level. So I'll be starting to send you some information about that after we're done talking. That's really exciting. So last thing I do is I usually just have the five questions at the end meant to be the first thing that pops into your head, not a ton of time on each one. How do you personally get into the work zone?

Kelleigh: It's a little unusual for me because we live and work in the same place, it's a farm and roasting center. We're actually just, after 10 years, we're going to move off the farm next month. And so I've lived in the work zone. The question is how to get me out of the work zone. I really love my job and I'm totally okay with it, but sometimes I need to get broken out and go to the beach and that kind of thing. How do I get out of the work zone? Going to the beach.

Josh: So that classifies a beach as your favorite vacation destination then as my next question.

Kelleigh: New Zealand.

Josh: New Zealand?

Kelleigh: Mm-hmm (affirmative).

Josh: From one island to another.

Kelleigh: Yeah, yeah definitely.

Josh: So what do you listen to podcasts? Do you have a favorite podcast that you listen to?

Kelleigh: I do, I have probably two right now. One is it's called Robinhood Snacks, and it's this... Oh you know it? Yeah, those guys are hilarious. I mean my two favorite podcasts are both with two guys that are just funny, but it's kind of business related. So Robinhood Snacks, 15 minutes market information done and it's fast and quippy. And the other one is The Unofficial Shopify Podcast.

Josh: Something you learned in the last year?

Kelleigh: I learned how to play piano.

Josh: What brought that on?

Kelleigh: I was on a retreat. Because our work life is so intense and we're multitasking so many things and we don't take that many breaks, my husband and I we give each other retreat time, and it's separate retreat time. And so I took a month off in June and I just went to a retreat and there was a piano there and I just started playing piano. I didn't work very much and there were some other kids there that were playing music and so I was like, "Oh damn, this is fun." So actually my husband is on a retreat right now, he comes back today.

Josh: It's exciting.

Kelleigh: Yeah, yeah.

Josh: So did you watch videos, did you have an instructor, did you just pick it up?

Kelleigh: Yeah, I started with YouTube videos. There are videos that you can watch that kind of share where your fingers go for particular songs and after I got back from the retreat I was like, "Well, you know, now's as good of time as any to pick up piano if we can't go anywhere," so I bought a piano and yeah now I have an instructor, a guy that I see every week.

Josh: That's great, so someone you look up to business or personal.

Kelleigh: Well Martha Stewart of course, but who doesn't? I think she's pivoted so many times in her life it's just fantastic and she's just a boss.

Josh: Absolutely, so bonus question for you. How do you take your coffee?

Kelleigh: Oh I drink my coffee different almost everyday.

Josh: Oh really?

Kelleigh: Yeah, we have an espresso machine, so sometimes I do espresso and I do lattes, sometimes... I think today I had a Clever and if you go to our website there we have a bunch of brewing videos and you'll see what a Clever brewer is. I brewed Geisha coffee and a Geisha's a very exotic, expensive coffee, it's the highest end coffee that we have. I brewed that via Clever today.

Josh: How to brew using a Clever immersion coffee dripper.

Kelleigh: That's it.

Josh: With Ka'u Giant Maragogipe. Pronounce that at all [crosstalk 00:31:57].

Kelleigh: That's Ka'u Giant Maragogipe, so when people think of coffee in Hawaii they always think of Kona coffee, but there are all these different regions around Hawaii and each one tastes a little bit different, and so we try to let people explore the different regions and the different varieties from home. And so that one comes from Ka'u Giant Maragogipe, comes from the south tip of the Big Island, it's near Kona but it's not Kona, and it is the largest coffee bean in the world, Maragogipe.

Josh: I can definitely learn something on this. I thought I was advanced with AeroPress but there's obviously a bunch more ways.

Kelleigh: Oh yeah, you do AeroPress great. Then so do you see our AeroPress video with the US champion?

Josh: Oh that's the highlight video, yeah I see that now on the site.

Kelleigh: Yeah, yeah that's her award. I was a judge in that competition actually, and she's brewing it with our Ka'u Morning Glory.

Josh: That's really cool. So I want to thank you for the time today. You definitely gave a lot of good hints and best practices for people that are looking to run a similar campaign and I look forward to working with you guys again in the future.

Kelleigh: Yeah, thank you so much. It's been a pleasure.