How Tails.com found their true purpose and snatched victory from the paws of defeat
I usually like to go to the offices of the amazing businesses I am interviewing for the D2C book. Tails.com proved a challenge. It is a business that sells dog food, and they really do love dogs. At tails.com, if you have one, and nearly everyone does, every day is ‘take your dog to work’ day. I had the chance to hang out with Noodle the Long-haired Dachshund, Baloo the Beagle, Elmo the Cavapoo and the rest of the gang. Guttingly, although I am a BIG dog fan, my pesky dog and cat allergy meant that I had to find somewhere less dog-friendly to meet their CEO, James Davidson. Sorry furry friends.
What Makes tails.com special
My day was still a winner, James proved to be modest and wise with a great story to tell. Tails.com was founded in 2014 as a D2C dog food business. What makes it stand out from your conventional pet food business is they recognise that every dog, and they mean every single one, is different. Its age, breed, health conditions, activity levels and individual taste preferences mean that an off the shelf bag of dog food will almost certainly leave it short of the diet it really needs and wants. Getting this wrong leads to disease, behaviour issues and an unhappy dog. Tails.com is all about optimising the mix of the right ingredients in the right amounts to make sure your dog is at its best throughout its life.
I am aware this sounds like standard marketing shtick; it is, however, exactly what tails.com does. It is all achieved in their purpose-built factory designed to make sure they can combine dozens of different ingredients in the right amounts and right variations. These mixes are stipulated by their specialist animal nutritionists and veterinary staff to make sure that every dog gets the right food in the right amounts every time. The key ingredient is dry dog food called kibbles. Tails have loads of types of kibbles, each with its own nutritional value, texture and taste. James tells me that there are over 1 million possible combinations of the ingredients, meaning that every bag of food leaving the factory is specifically tailored for each dog.
James and his Personal Assistant
Early Woe
Sounds great? James explained that in theory, right from the get-go, they had everything they needed to be a success; a big market with a clear demand, a fabulously innovative product, highly competitive pricing, a great founding team, money in the bank (from investors) and a big factory carefully designed to be able to churn out tailor-made food for up to 500,000 hungry dogs.
However, at the start, things did not go well. Less than 6 months after launch the founders were seriously considering either doing a massive pivot (into food for Humans) or selling off their assets and shutting the whole thing down. The thing which spelt doom was the initial metrics seemed to show that the customer acquisition cost (CAC) was way too high and the Life Time Value (LTV) was too low to make things work.
Finding the answer by finding a purpose
It was make or break time. It was at this point, with the support of the founding team and their shareholders, that James stepped up from his initial role as COO and became CEO. They got to work, turned off the costly marketing taps and started to mend the things which were holding them back. The biggest lesson for the team was they needed to talk to their customers. What they found when they did was that the product algorithm had a glitch (it was delivering more food than required), frustrated customers did not know when to expect their next delivery and the website needed to be way more user-friendly. Most of all, these conversations made the business realise just how much dog owners care about their animals, and they needed to know that the company providing them with their food felt the same way.
It was this insight that changed the business from one that was trying to make the most of the D2C opportunity in pet food, into a company with the sole purpose of helping dogs have the happiest, healthiest and longest lives possible and doing all they can to support their two-legged owners on this mission.
Tails.com stopped being a guarded, secretive business and became more transparent, more communicative, more helpful and more supportive. In turn, this attitude meant that they quickly started to build customer trust and credibility. Credibility was the key to driving acquisition and trust drove loyalty.
This philosophy has made tails.com, in just five years, a business with more than £30m annual revenue, over 200 employees and 200,000 customers. Twenty thousand reviews and a 5-star rating on Trust Pilot tell you their customers appreciate their efforts.
It was only by looking down the barrel of failure that James and his team figured out that a business needs a purpose. It needs to understand its customers and needs to care. Once this approach had been established, it was not only good news for the key metrics but made tails.com a great place to work (especially if you like to have a dog snoozing under your desk).
I can't wait to get more of the tails.com story and lessons down on paper. It’s a fascinating and inspiring tail (woof).
One of the key skills for all new recruits at tails is mastering one hand for typing and one hand for stroking.