In 2014, Casper set out to disrupt the mattress industry. Described by Business Insider UK as the ‘Warby Parker of Mattresses’, their streamlined model with a fixed price per size, bed-in-a-box delivery and hassle-free returns has revolutionized the not-so-glamorous process of mattress shopping; one which Casper Co-founder and Chief Operating Officer Neil Parikh describes as “worse than buying a used car”.
“The mattress industry is a racket. You walk into a store expecting a confusing experience, but you don’t expect the 35 models offered to be basically the same product with different labels. It’s worse than buying a used car–at least there you have data points like horsepower, air conditioning, and a Carfax report. But who knows how many springs are good for you?”
From their creative imagery to what Parikh calls a “holistic focus on sleep and wellness’, they’ve set themselves apart.
the mattress industry is worse than buying a used car
Renowned mattress blogger Derek Hales, however, was not feeling the love. Casper had been among the first mattresses the twenty-something Arizonian reviewed before building his one-stop mattress-reviewing-online empire. He and his review site Sleepopolis.com were sued by the company in late 2016. Where did things go wrong? Let’s take a look.
The early days: indicators point to a successful launch
Casper had a smooth take-off in the beginning. After earning $1 million in sales in the first 28 days, they adjusted well to rapid early growth, overcoming the obstacles that required swift inventory production, setting up new factories and training a slew of new employees. The New York City-based company has since raised $70 million in venture capital, grown to 120 employees, and hit $100 million in cumulative sales.
Casper by the numbers (via Reference for Business)
Parikh claims that these initial setbacks led them to compensate with an outstanding customer experience team. They learned quickly how to capitalise on their newness in the industry and awareness of the influential network of the blogosphere, a marketing channel that many pre-existing mattress companies hadn’t considered.
It wasn’t until things began to heat up that these new relationships came under fire.
Getting into bed with influencers
Any well-versed marketer understands how vital influencers are, particularly for new brands. As we learned from Brandbassador, an influencer doesn’t have to be a highly paid YouTube celebrity like Pewtie Pie. Rob Trauber, CEO of Johnny Was, and Zackary Cantor, the Director of decision sciences for GlobalWide Media, claim that influencer marketing is not about deals but about data and dialogue. “An influencer marketing platform can help brands leverage data to guide the conversation between consumers and influencers.”
In this case, what’s at stake is simply a good night’s sleep. According to AJ Agrawal in Forbes, influencer marketing lives in some pretty grey territory “between an official testimonial and a subtle product mention, which is done almost in passing.”
When an email chain was leaked during what became a messy legal battle, the dirty details of the relationship between Casper and mattress blogging guru Jack Mitcham of Mattress Nerd saw the light of day. It began when Krim told Mitcham that it “pains” them to see him give another mattress a better review.
Mitcham stated that he simply did not find the mattress comfortable, but Krim decided to push it.
“Is there any way I could get you to spend more time on Casper? We would even be happy to fly you out to NYC to tell you more about the product or have you spend a long weekend on one. I’d also love to find ways to work more closely. We would love to become your biggest referral check.”
After increasing Mitcham’s payout, Casper’s reviews soared.
Casper and its fleet of ‘supportive’ influencers (including Sleepopolis) maintained an amicable relationship until the company received a $55 million investment and decided to abruptly end their affiliate relationships as they entered into a period of re-evaluation.
This contentious decision led to the deterioration of their previously long-term loyal reviewers, specifically Hales and Sleepopolis, who shifted his allegiance to companies such as Leesa who were still paying commission. He even posted an extremely targeted yellow box on his website that flashed:
Casper filed a lawsuit against Hales, claiming that his action cost the company millions of lost sales. After much back and forth between the two, emerging in what some called “sleep wars,” Sleepopolis was mysteriously acquired by a competing mattress review site operator, JAKK Media, in September 2017, financed by the generous financial support of….none other than Casper.
Immediately following this acquisition, not only did that targeted yellow box on Sleepopolis’ site disappear, it morphed into an offer for a $50 discount on customers’ next Casper purchase. When questioned regarding the change in review, Krim stated that they have no influence over the content of the new Sleepopolis. They simply “lent them money”.
The result has been a flurry of negative PR for the mattress brand since news of the lawsuit broke in September. Only time will tell how much this will impact consumer sentiment, and ultimately, sales.
Lessons learned
1. Respect your influencers.
Successful influencers today are well aware of the value of their personal brand, and the pull they can have over the products they promote.
Agrawal writes: “Having a personal brand opens doors of opportunity. Now more than ever we see a rising amount of influencers who are starting to understand their value. Five years ago, it would have been thought ludicrous for a teenager to have a million followers on Instagram. Now? Those same teenagers are negotiating with big brands and calling the shots, always careful to ensure that they don’t “sell out” and just become a product pusher.”
Many influencers harness the power of storytelling – blending stories from their own lives with the brands they’re paid to promote. They’re able to reach consumers on a personal level – offering deep insights into what resonates with an audience and why.
2. All brands are glass box brands today.
We live in an age of radical transparency. A recent post on Trendwatching.com explains the shift we’ve made from black box to glass box brands:
“Outsiders can easily see inside. They can see the people and the processes. They can see the values. They can even see what the people inside the box feel about what they’re doing.”
Nothing is private. No Christmas party, eco-footprint, review tamper or lawsuit will go unseen in the end. Regardless of the following that Sleepopolis gained, it was still pioneered by that “pale, skinny twentysomething with freckles and short red hair” . Regardless of right or wrong, this looks like bullying, and has done some significant damage to Casper’s notoriously friendly reputation.
You made your bed, now lie in it. What could Casper have done to prevent this?
Everything remained peaceful until Casper declined to renew all affiliate relationships. Rather than taking a sweeping approach, a closer look at data from each individual relationship could have allowed them to optimize their spend and forge deeper relationships with those that were realistically moving the needle.
Customer data can be extremely revealing – monitoring the way they respond to your own efforts, as well as your competitors’, in real time can help you make better, more forward-looking decisions to optimize efforts and avoid potential PR disasters in the future.
