BBF 34 | Subscription Apps

In recent years, with the tech boom, one of the services that has been making big bucks is subscription apps. No matter which industry you’re looking to target, you can be sure that for the most part, there is a way to create a subscription service out of it. Andrew Nagle is the Co-Founder and CEO of the subscription app Glammly, which organizes beauty appointments and offers deals and discounts to its customers. Andrew discusses how the app came about, and what he and his team have been doing to keep it alive and profitable with Gerry Foster. Let Andrew guide you through this new frontier in app development!

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Subscription Apps Can Make Big Bucks With Andrew Nagle

I am excited because I have as my special guest Andrew Nagle, who is the CEO and Cofounder of Glammly. I have to admit I don’t know anything about Glammly. I’m here at a big event in Los Angeles and they said, “Gerry, you’ve got to interview this guy. He is rocking it.” Andrew, welcome to the show. Tell us, what is Glammly? What do you do?

Thank you. We’re super excited about Glammly at the moment. What we’re doing is we’re increasing the profits for beauty salons and day spas by integrating with a booking system, finding their quiet times and selling them to our members at a discount. The key part is we’re doing it in a way that they’re making a profit. Unlike other businesses before like the Groupons of the world that came in and sold this business as a dream and often, they never saw any profits afterward. It didn’t work out. You hope that 1 in 10. With us, we become the customer of these times. We’re coming in at a price that’s fair to both the consumer and the small business so that we can keep coming back using this deal and helping these businesses to grow their revenue.

You’re helping spas and salons?

It’s beauty salons and day spas. It’s an app. We do massages, haircuts, nails, waxing, you name it. We have all these treatments and they’re all 20% off guaranteed. Every time you book with us, it’s 20% off. You can use that same deal again and again. You can find and book them directly from within the app.

What sparked this idea? How did you come across this? Did you see this unfulfilled need that was there and nobody was addressing it? Tell us how you came up with this.

All good things in my life came from my wife originally. She was unhappy with her current beauty routine. My wife loves a deal. Often, to get a deal, she would have to compromise on quality or convenience. I mentioned the Groupon. She would spend her time trying to find Groupon and often the quality could be very poor, but also she had to print out this coupon or she wouldn’t be able to book. She was like, “We have to fix this.” I realized that in my beauty routine if I was getting a massage, I was having little bit different problems. My problem was mainly for business trips. I was struggling because I was spending too much time trying to find the place I wanted to get the treatment done and I also had this flexible schedule. We thought, “Let’s build something that would address both of these problems.” That’s how we built Glammly. That’s one half of the puzzle.

This is a valuable lesson for all of our readers here, which is to find the void and fill it. If there was a problem out there that’s going unsolved, that is driving people nuts, especially around, “This is a hassle. This is taking too much time. I’d rather be doing something else.” You have found a way to fix that problem. You’re onto something here.

The key part is making your business model so that your clients are making a profit. Click To Tweet

I think so. It’s something we’re excited about. The thing is we solve one problem, but for this to work, you’ll have to solve the problem on both sides. Everyone wants their lives to be easier and spend less money on services. Unless the business is incentivized as well, then you’re not going to have a happy business. You might sometimes see when you come in with a deal, you might not get the same experience and that’s not okay. If you’re spending your money, you want to get the same top-level experience even if you’re coming in at happy hour like a restaurant. We spent a lot of time making sure of, what is the problem these businesses are having? Once you’re able to create something not just to solve our problem, but solve their problem as well, that’s when we knew we had something special.

That’s good because on the back end, if you’re making these connections, it has to be the right experience because a brand is an experience. You have to define that experience in terms of how are you going to shape perceptions about your brand, which impacts their decision to make a purchase. How do you address that on the back end? To your point, everybody is different in terms of their level of service and their definition of quality. How are you doing that?

It’s a key feature of ours, which is we try and test every salon that joins our platform. Every business will send someone. Often, I’ll go myself even and I will try that business out. I will see the quality of the service before I even told them that maybe we’re interested in signing them up. I want to see how they’re treating their customers. That’s the first step. The second step is they have to maintain that quality. Often, we’ll send a secret shopper to those salons to make sure that they’re giving the same quality service that they’d promised when they first joined the platform. We’re under a mutual understanding that if that quality drops, then we have no problem with removing that business from our platform. This is something that we hit a crossroads with. We had to choose to grow slower in some ways but sticking to our brand. We’re making sure that we weren’t adding businesses so that we can have more appointments when they weren’t on-brand. That was a hard decision but ultimately, it was the correct decision for us.

I love that you’re using the words, “Be on brand.” The translation for that, for those of you who are reading, is you have brand standards. These salons have to measure up. They have to pass your audition. They have to pass your inspection in terms of what is going to deliver a world-class experience to the customer. You probably have a checklist of what that criteria is. If on a scale of 1 to 10, and they’re at a six, you’re like, “No pass.” You get to educate them because you’re giving them a big opportunity.

These people are small business owners, which means they’re passionate about their work. Often in the beauty industry, the owner of the business is the lead stylist. They’re even committed to doing that work. We have to make sure that they are on-brand for us, but they also want to make sure that we’re on-brand for them. When you have a marketplace, your brand is one thing that you’re showing to your customers. If you’re holding all of these equivalents like in Booking.com that has these hotels on it, your brand is the sum of all of these brands that are on your marketplace. These brands that are joining also want to make sure that whatever else is in the marketplace is on-brand with them. We get this a lot. Our business will look at the other salons to make sure that they’re happy with being associated with those other businesses. They spent so long building their brand that they don’t want it to be ruined by possibly joining a marketplace that doesn’t fit them.

This is great because you are building a brand community. Great brands are built by communities or tribes or avatars. I love how you are setting up the criteria for that to occur. What’s been some of your biggest branding hurdles that you’ve had to overcome on this journey? What stage are you at now? Are you in revenue?

BBF 34 | Subscription Apps

Subscription Apps: Small business owners are passionate about their work. Often in the beauty industry, the owner of the business is the lead stylist.

We’re making revenue. We launched in October, in Los Angeles. We’re in twenty salons across the city. We’re growing and we’ve got 400 monthly users. We’re seeing a huge surge. We see a lot of referrals. People are talking about it and sending it to their friends. That’s a great time. To go back to what you asked in terms of some of the problems that we had. One of the issues that small startup businesses face is you have many channels in which your brand is being represented. You’ve got your website, app and email marketing. You might have street teams, events, sales and everything. Your brand is out there.

Even different things like your Facebook, Instagram, Twitter and LinkedIn, you are now having to portray your brand across all these channels. I got this picture going around saying, “This is my LinkedIn and my Facebook photos.” “For what brand?” Your Facebook, your Instagram and your LinkedIn profile are not the same things. You’re having to constantly update these and make sure that they are all consistent with your brand. When you have a small team, that’s hard to do. Often, it’s better to do some things well than to do a lot of things average. That’s a hard thing for a startup to be like, “I’d love to launch this email campaign,” but we either do it right or don’t do it at all.

In branding, those are called brand touchpoints, which means that any opportunity that the customer has to interact with your brand, they’re forming an opinion. You’ve got to make sure that if you’re setting a standard of excellence, things have to be on point at every interaction, every touchpoint. If they fall short, what’s the customer going to remember? The negative. I’m glad to see that you’re going to educate these salon owners. At one time, I did a lot of branding with salons. That’s a different breed of people. Their idea of a brand was, “I have a logo. There’s my photo, I’m branded.” Good luck with that crowd, although they are passionate and ambitious. You also have the issue I’m sure that you’re dealing with, which are not the owners but the people who are renting space. They’re part of the brand. How do you deal with that issue? All they care about is getting appointments and cutting hair.

That’s why it is difficult. I’m not going to say that there’s a perfect answer to fix it. We know from our customers. First of all, customer service is our priority number one. If something goes wrong, we immediately address it. Customer is right as far as we’re concerned. We’re making sure that they’re happy for us and we’re making sure to see where the root of their problem is. Because we have all these people using the app, it does give us this idea of crowdsourcing it to find out how well these are doing. Once you get that bad feedback, it’s a strict line with us. We will remove the business. We won’t work with it anymore. It’s something that we’re going to have to see as we go on. We are going to start to put up more quality team as we start to expand.

I love that you were giving me some kudos before we started about having listened to one of my podcasts, 12 Tenets Of A Big Brand. What are some of your takeaways from that?

The one that stood out to me and that resonated with me was the one about Dyson where the question was, “How do you come up with these great ideas?” He said, “I just take things and make them better.” In the case of the hand dryer where you’re putting your hand in and you don’t have to touch anymore. It’s like, “Why were we even doing this differently before?” If you walk into a bathroom now and they push the button and you’re like, “As if it’s going to stone age.” That’s one thing that we tried to do. Take something that was broken or wasn’t working and make it better.

Make sure you either do it right or don't do it at all. Click To Tweet

Going back to another one of your podcasts, one thing you said was you can’t just copy. You have to come out as an individual brand. Even if you’re making something better, in the case of him and the hand dryer, he didn’t just take it and paint it. He didn’t put the button in a different place. He took the concept and made it a hundred times better. It’s still a hand dryer. It’s not like he’s completely changed it to paper towels. Now it’s a completely different way of going about it. While you’re making it better, you also have to make it individual to you because otherwise, you can’t compete with these big brands.

If you’re going up against these billion-dollar companies and they have these huge budgets and more people working on their email marketing than you have in your entire company, you’re not going to succeed and you’re not going to be remembered unless you do something individual, something out of the box. Sometimes you have to learn to rein it in a bit because you might go over the top, but it’s great to be individual because people resonate with real things now as well. Gone are the perfect advertisements of Photoshopped images. People want to feel something that they can resonate to, a brand that they feel represents them as well.

That’s about making heart connections in terms of making sure that the customers see that you truly care about their well-being, their satisfaction, their needs being met and all of that. I want to go back to something you said, which is good and that is going against the flow, thinking outside the box and paint outside the lines. What you did was you looked out there and saw Groupon.

We use that as the worst case and then there are a couple that did small improvements, the small improvements weren’t going to get us there. We had to do the big jump. That’s what made us stand out and helping us to grow now at a very fast rate.

When you’re talking to these retailers, we’ll stick with salons for now, and they’re thinking that their point of comparison is Groupon because they don’t know any better. If you were to start a sentence along the line of, “What makes us different and better from Groupon is,” or “The reason why you should choose us over Groupon is,” how would you complete that sentence?

We have a flyer that we bring along with us and it says we are the anti-Groupon. We list everything we call out because you can’t beat around the bush with this. You have to say what was wrong about that service. It’s not that I’m hating on Groupon. Whatever it is, you’ve got to understand the pain points that customers have. The more that you can say what they are, the more the customers are going to trust you. We’ll say we’re not going to do predatory pricing. We’re not going to destroy your brand because that was a big thing with Groupon. There was this big lime green website.

BBF 34 | Subscription Apps

Subscription Apps: Often, it’s better to do some things well than to do a lot of things average.

You spend all this time building your brand and now you’ve got a lime green coupon that someone has to print out and people hated that, branding, pricing and the type of customers that were being attracted in a lot of cases. We address all those points. I said to them, “As I have high standards for what you need to keep, you need to have high standards for me. If I at any point do not meet what I’m selling you right now, then you need to tell me because that’s not okay and we will fix it. Our goal is this dream and if we’re not doing that, I need to know from you because you are the customer at the end of the day on that side of the marketplace.”

Groupon has made it difficult for a lot of these salon owners and other retail merchants because it didn’t go the way that they thought it was going to go. They were a little skeptical, cautious and fearful of someone like you coming in with “the next best thing.” However, if you can say that, “Not only do we have something different and better, we have a way of making sure that those nightmares don’t occur again.” Are you getting buy-in on that or they’re like, “Prove it to me, why should I believe you?”

Before we even launched, before we even had customers, we had to build up the supply side. We had to get the salons on board before we even had customers. Not only did we have to say like, “We’re going to get this.” We had to convince them. It’s a lot easier now for me to convince salons because we have the results. We know that it’s working for businesses but before that, it’s a leap of faith. On the salons that we’ve accepted or that we’ve identified as a good fit, we have a 90% success rate with those businesses. They think that we are doing exactly what meets their needs. We’re doing it in a way that they are extremely happy. I get calls from my salons all the time. I speak to them one-on-one. I know all of our salon owners by the first name. I know their kids’ names at this rate. It’s something that we had to promise a lot, and then we had to deliver on that and we have.

The payoff for them has been revenues are going up, profits are expanding and I bet you a big one, customer loyalty and repeat business.

The ways to look at it is other systems, what they were doing was customer acquisition. Because of the rate that we come in, we charge on average about 20% commission to our businesses. We did a 20% discount. What that means is we’re coming in where they’re still making a profit. We’re no longer just customer acquisition because we’re not funneling people into the Saturdays, which Groupon did before. We’re filling up the times that they were never able to fill. No matter how good they get at their businesses and they might increase ads or whatever it is, they’re seeing more and more bottlenecks at their peak times.

These other times are going empty. 40% of the time we see across some of our businesses is unfilled. These businesses have to pay their staff, their lights, everything, so they’re losing money. The first thing we’re doing is getting new customers in the door. They’re going in at those times. The second thing that we’re doing is taking some existing customers and redistributing them to those quiet times. If I take even a full-paying customer on a Saturday and move them to Tuesday at 2:00 PM, that then frees up that slot on a Saturday, which they have three people wanting to get into. Now they’ve got someone else going in.

It's easier to convince potential clients once they see the results with existing clients. Click To Tweet

Overall, their revenue has increased across the board, both from these new customers and us managing their time from there and they’re seeing that. We’re adding revenue to these businesses. Even after one month of us having launched, one of our businesses increased their revenue by over $2,000 in that month alone. That’s only early days for us. We have a lot to play with at the moment. If we keep going the way we’re going and we keep our values, we’re going to see some amazing results with these businesses.

In my experience with salon owners, their focus was primarily on new customers in the door, which for them usually came through word of mouth or referrals. Number two, repeat customers and loyalty. Number three is selling products. That’s a big deal to them. Are you addressing that as well? Are they getting more product sales?

What we do is we’re getting the person in the door. We don’t touch the tip. We don’t do any like they’re able to buy the products. What we’re going to be moving towards, the first thing is a lot of our businesses create their products. They might have their line of shampoos or hair products or we have this grace and eyebrow business that are bringing out their own specialty products. We’re going to give them a platform on our app to be able to sell to customers that won’t be from the same city. They’ll be able to attract customers from New York even though they’re based in Los Angeles. The second thing is we’re also going to be able to help them to shift those products that were sitting there when they got too much supply. We’re able to tap in and find these issues they’re having and help them across the board. Products are definitely the next step.

How would you describe your perfect customer, your dream client or your avatar? What type of salon is that? Not only demographically, but I’m thinking psychographically in terms of their strongest desires, pain points, mindset, attitude, spirit. What have you uncovered about that? Because this is not for every salon owner. What are your thoughts about that?

You need to be a salon owner that has already taken some steps to try and improve your business. The salon industry is one that’s taken a while to modernize. There would be a lot of pen and paper. Salons are taking bookings and writing them down. What we’re seeing now is a trend of the salons using these newer booking systems, which are the ones we integrate into. They are the ones that have a new website. They don’t have this thing from many years ago. They’re running their own Instagram or even better, there are all these micro-agencies that the salons are paying $150 a month. This person is running their website and they’re doing their Instagram.

That’s a salon where the business owner realizes that “My time is better spent not doing this.” A lot of them feel, “I can do this. I don’t want to spend $300 a month managing my Instagram and my website. I can do it on WordPress or I can do on Squarespace.” The truth is you can do it, but you’re not going to do it well because you need to specialize. Those businesses that have already recognized that are a prime candidate for us. They know, “I’ve made mistakes in the past and now I realize that these things are beneficial for my business.”

BBF 34 | Subscription Apps

Subscription Apps: If you need to succeed, you have to get over your mistakes and learn to tell yourself that you messed up, and then find ways to do better.

Any other tips or suggestions for our readers out there? Are you going to focus on just salon owners or are you looking at other types of businesses?

We’re starting to look at men’s spas at the moment. We’re looking at the Botox, but then we’re also looking at dentistry in terms of teeth whitening and cleaning. We’re looking at a couple of other markets as well because it’s all similar problems and similar booking systems. There’s a third-party equation, which is the actual partnerships with the booking systems themselves. That’s our gateway to the salons.

If you could stick with those four industries, you’d do quite well.

You’ve got to keep your focus on the thing that you have. Going back to what you said, things are not going to go well when you’re doing things. If we’re going to stick specifically to branding, for example, you’re going to make mistakes. First of all, when you made that mistake, you’ve got to learn from it. You’ve got to bury it in your mind. If you need to succeed, if you could get over these things, you’re going to need to learn to be like, “I messed up. What can I do better?” If you keep thinking about it like, “I can’t believe I did that,” it’s going to bring you down. Mental health in this industry is a huge thing. For startup founders, you’re going to get hit again and again. When it comes to raising investment, 90% of people are going to say no and 10% are going to say yes.

The first customers, you’re going to have people that aren’t happy and it never goes right. Even for us continuing every week, something’s going wrong. It’s about learning to take care of yourself. Learning to pick yourself back up to realize when to take the foot off the gas and be like, “I need to take a break and look after myself.” That’s something that people don’t talk about enough. They don’t say like, “Founders need to look after themselves.” People that are running any business, you’re the person. If you go down, a lot of times, if you’re a small team, then the whole business is going to go down. If you’re not looking after yourself, it’s not good for your business.

These are golden lessons here from such a young guy from one of my favorite countries. He’s Irish. This has been wonderful and those of you who are out there, perhaps you own a salon or you know someone who owns a salon, go to Glammly.com. Anything else, Andrew, that you want to share?

If you would like to save some money on your beauty treatments and get top quality beauty treatments as well, then go to the App Store and download the app. If at any point we’re not meeting the expectations based on what I’ve told you in this interview, email me at Andrew@Glammly.com. Tell me what we’re doing wrong. As much as we love to hear when we’re doing well, I want to know if we’re doing something wrong.

Thank you so much. Until next time, take care.

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