Episode 72: Growing a Coffee Subscription Company with Ryan Fritzky, Co-Founder & Chief Marketer at Bean Box

In the latest episode of Subscriptions Scaled, we speak with Ryan Fritzky, co-founder and chief marketer at Bean Box. 

In the episode, we learn everything from the challenges Ryan has experienced running the business to how he reduces churn.

Keep reading to learn more about the episode.

Bean Box

Bean Box delivers specialty coffee to customers every morning using a subscription-based model. The company’s mission is to become the leading direct-to-consumer brand for specialty coffee at home. 

Ryan Fritzky started Bean Box back in 2014, which is on the longer end of subscription businesses. His background is in product management and online marketing. Ryan has also worked at ad tech companies.

In 2012, Ryan made the leap to found a company with his partner Matthew Burke. They started a mobile app business initially for sharing personal recommendations. 

While Ryan and Matthew were interviewing consumers about their mobile apps, they spent a lot of time in coffee shops that roasted their own coffees. The pair realized the coffee tasted different from chain coffee shops and the standard coffee you usually drink.

The two started sending craft bags of coffee to their friends and family, and that’s how the idea of Bean Box began.

Ten years later, Ryan and Matthew are still working together after finding inspiration from coffee.

Starting Bean Box

Back in 2014, there weren’t as many subscription services as there are now. Birchbox, HelloFresh, and Amazon Prime were some of the leading contenders.

These successful subscription services gave Ryan and his team inspiration and confidence in Bean Box.

When they spoke to people in the specialty coffee space, Ryan and his team were told that selling coffee online didn’t work because the cost of shipping was so high relative to a bag of coffee. Yet Ryan still wanted to test the idea to see if it could work.

The early businesses Bean Box competed with ended up pivoting somehow or aren’t around anymore.

Ryan and his team really believed in the business, and that local artisan premium products would shift to the home in a bigger way.

Bean Box’s initial take was that they’re not just selling bags of coffee. They’re selling an experience where people can taste different coffee from small-batch roasters. They can get a sense of what they like, personalize their preferences, and go on a journey.

Ryan and his team were able to create their first product called the Bean Box Sampler Subscription, so that people could try it at a low price. They were able to make the shipping work, and that’s how they got started product-wise.

The Bean Box subscription model

After that tasting sampler, Bean Box launched properly. People could then buy full-size 12-ounce bags and could choose from any of the coffees they enjoyed in their box.

If customers enjoyed a coffee sample from Bean Box, it would be a good experience for them to be able to buy more of it from the brand. Bean Box also wanted to incentivize people to take the next step with the box.

Some people try coffees with Bean Box but end up buying it directly from a roaster. However, the team at Bean Box isn’t worried about this.

Bean Box aims to give customers a reason to buy more coffee through them. This is something Bean Box has invested in and will continue to invest in.

Ryan and Matthew both have technology backgrounds. They’ve always tried to think about how they can make the Bean Box transaction process smoother.

The team has launched a text-to-order system, the first in the space. People can send the number of the coffee by text and can order another bag or two from their phone. There are QR codes on every coffee bag.

So, if someone’s in the kitchen with their phone, they can easily order another bag. And as Bean Box are shipping out of a shared warehouse, they can have better economics around shipping costs for their customers.

As Bean Box curate new coffees, they’re all coming into the same warehouse. This allows the team to provide shipping price advantages compared to competitors. It also helps Bean Box introduce unique products that combine coffees from different roasters across the country.

Building Bean Box

Except for email management, the team at Bean Box has built everything for the brand. This is mainly due to timing. When Bean Box started in 2014, the current eCommerce platforms couldn’t personalize products the way the team needed them to be successful.

However, even email marketing has changed since 2014. Earlier email marketing platforms were focused on newsletter formats and didn’t have the analytics to help with further marketing efforts.

So early on, Ryan and his team wanted to focus on making sure they were getting the most out of their email list and being able to market in a more personalized way to their customers.

Finding an email marketing platform to do those things was tough back then. Now, there are so many platforms geared more towards eCommerce that can provide customer data and web analytics to help people make smarter outreach and communication decisions.

Depending on team members’ skill sets, today’s platforms can help you scale up and move faster. Whereas working on backend systems can sometimes get in the way of making progress on the product or tools that can help you grow on the marketing side.

Reducing churn

Early on, Bean Box was focused on search marketing to help reduce churn. The team wanted to find people who were buying coffee online to see if they could convert them into customers and get them to try Bean Box.

Search marketing allowed Bean Box to do this pretty quickly and target people on a keyword basis. At the time, there wasn’t much competition in coffee subscriptions, so search marketing allowed Bean Box to show up to people who were looking for what they were selling.

Bean Box also uses email marketing and maximizes its chance to reach back out to customers to upsell either a subscription option or buy a coffee bag that the brand is excited about. The team has also used social media marketing to help reduce churn and promote their brand.

With over seven years of experience in the industry and plenty of success, Bean Box shows no sign of stopping any time soon.

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