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The Marketing Millennials
319 - Guide to Marketing Complicated Products with Trey Ferro, CEO of Spot Pet Insurance
00:29:19
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- [00:02]
Daniel Murray
Welcome to the Marketing Millennials, the no BS Marketing podcast. I'm Daniel Murray, and join me for unfiltered conversations with the brains behind marketing's coolest companies. The one request I tell our guests stories, or it didn't happen. Get ready to turn the top.
- [00:27]
We are back with another episode of the Market Millennials podcast. Today, we're diving into the power of a B testing and how spot pet insurance has used it to fuel brand awareness and growth over the last few years. And our guest today is Trey Farrow, the Gen Z founder and the marketing mind behind Spot Pets social evolution. Yes, Gen Z's are allowed on this podcast, and I promise you this is not a debate between which generation is better. But instead, we're breaking down how AB testing has changed SpotPad's approach to marketing, what they've learned from testing different CTAs, messaging creative, and how brands can leverage experimentation to drive real results.
- [01:17]
Let's get into the episode. What is up, Trey? Welcome to the podcast.
- [01:22]
Trey Farrow
Thanks, Daniel. Happy to be here.
- [01:25]
Daniel Murray
I want to dive in quickly. First, trading is a Gen Z, so don't hate on him. Millennials listening. But he. He has created a company that's growing rapidly, which is cool. But I'll let you talk about the story, the background, the why, why you started your company, and then we'll get into some marketing stuff.
- [01:46]
Trey Farrow
Absolutely. So back in 2019, I found a very interesting statistic. I found out that 2% of pet parents in the US had insurance, and overseas in Europe, it was closer to 40%. So I went on a solo mission to uncover why there was such a discrepancy between the two. And what I found is a lack of education. People didn't know about pet insurance, and a lot of people still don't know what pet insurance is. So Spot was kind of based on how can we get people, you know, up to date with this new product that is essentially health insurance for cats and dogs? And the Millennials, the Gen Z is getting their first pets. They don't really know how expensive these vet bills can be. And we're here to help, you know, take away that financial stress from any unexpected vet bills. So you're not having to choose between, do I pay rent next month or do I pay for a $4,000 surgery bill?
- [02:44]
Daniel Murray
A lot of brands out there say, like, you gotta test, you gotta test. But very few brands make that, like, a core of their strategy. So how did a B testing become a major driver for Spot Pets marketing?
- [02:59]
Trey Farrow
We've always been a really customizable insurance product. So no matter if it's your brother, you know, who's just getting out of the real world, getting his first job and not getting paid that much and just needs, you know, a super cheap accident plan or you know, a suburban mom who's on her fifth or sixth dog and she knows the drill. She wants the best coverage possible. We offer that. So our AB testing strategy was how do we personalize not only pricing but the message, the creative, everything that we're putting out to people. So I'm not going to message, you know, our TikTok audience the same as I'm going to message our employer group, AUD audience, people who are getting this through their employer, then I'm not going to offer the same prices either. You know, they can choose whatever they want, but I'm going to recommend. Hey man, you know, I know that you're just getting out of college, you have a puppy, let's start you off with something cheap and you can upgrade later or hey, I see that you're in, you know, Beverly Hills, you have a very designer dog breed. Let's make sure that you have really good coverage because those dogs are really, really expensive. So we've gone along, you know, along that route for the last five years. And it's really our conversion rates, what we look at every single day. You know, how many people come on the site, how many people get a quote, how many people buy. That's what we're looking at every day.
- [04:17]
Daniel Murray
What are some of the most important elements to test when a B testing? Are you looking at copy creative, cta, audience targeting? And which one have you seen is the most effective when you do changing it?
- [04:31]
Trey Farrow
It's crazy how effective a CTA can be. I mean just a two word button versus a three word button. You could have your conversion rate change by 10, 20, 30% based on what you put in there. So I like to start with the small things and then get bigger, you know, low hanging fruit. But it's really customer engagement and what you say to people. So creative's nice. Like you want to make sure that your creative is, you know, synergistic throughout the process. But I want to tell your brother that, hey, this is a really affordable product. I want to tell someone with a little bit more income, hey, this is the best five star rated by Forbes, you know, highest customer Satisfaction product and 24,7 support all that stuff. Knowing that and really just, you know, making sure that your cadence is correct, you know, hitting people just enough where you're constantly on them, but not to the point where they, okay, you know, these guys are annoying. I'm not going to go with them because they text me every 24 hours. I'm. I'm out of here. So that's kind of the fine line that we've decided to walk. And it is a combination of everything. But my advice to other marketers out there, start small, then get bigger and bigger.
- [05:47]
Daniel Murray
You grew up in, like, the Gen Z cohort. What do you think that, like, your mindset as a Gen Z has, like, transformed of how you approach marketing versus what you see out there of millennials, Gen X and older?
- [06:04]
Trey Farrow
I think the biggest part of my industry being insurance is the big scary words. You know, I don't really want to hear all this insurance lingo. I want to know, hey, I'm going to give spot $500. What do I get? I'm like, oh, I'm going to reimburse you 90% of everything, you know, for these 35 different, you know, claims that you could have. And it's going to happen in 48 hours. And you can call me 24 7. And as a consumer, I'm like, that was very open and honest. And as long as the reviews hold correct and these guys are telling the truth, this is a good product. It's not, oh, let me, you know, all these exclusions, and I'm going to trick you and get you to pay more and upsell you. We're customizable. I don't care what plan you choose. I don't care how much you use it. We're never going to make you pay more because you use it, you know, up to your limits. I just want people to get this product because not enough people in America or Canada, we sell them both have pet insurance, and pets who have insurance, they live 30% longer. If you go to the vet, you're a healthier pet. We're trying to create communities of healthier pet families, and that's really our goal as a company company.
- [07:15]
Daniel Murray
One thing that I think the Gen Z's have taught a lot of people is just like, rapid transparency on pricing, rapid transparency on wording. I mean, I think millennials are into that now because we've been screwed by the healthcare system. We've been screwed by, like, old software pricing. We've been. There's a lot of things that have hidden all the details, which you could have done back in the day because there wasn't much options. But now there's so much options. People just want to know, hey, I'M going to spend X amount of money. I'm going to get X like you said. And I mean, lemonade kind of does that for just like renters. Insurance is pretty plug and play, but you're like, you are doing the same exact thing for like pets and not. And a lot of your part is just education because you said at the beginning is 2% of people know about pet insurance. And I, the only time I ever heard pet insurance was a thing was when, when one of my employers offered it as a benefit to people. And that's the only time I ever heard that pen insurance people had pet insurance.
- [08:23]
Trey Farrow
It's a new era, man. We can't just hear about, you know, cool products from our employers or our vets. You know, I'm trying to put it in front of people's faces on social, on television. I want to make this a fun thing. It's not scary like life insurance. You're going to die. This is, hey, we cover routine checkups. Like, this is part of your family. This is your baby. You got to treat it like your baby. Babies are expensive. Make sure you're there to, you know, be financially responsible.
- [08:50]
Daniel Murray
You are very digitally first company. So what are, what are some things you've learned from using social to scale the business? What are some things that people can do that they aren't doing? And what are things that you doing that are working on social that people should think about doing?
- [09:07]
Trey Farrow
Everyone wants to be viral. You, you know, that's the word that gets tossed around all the time. How do we make this viral? I want to go viral and it's really just listening, social listening, so important. So listening to our reviews, asking our customers for user generated content, recycling that into our paid media campaigns. And then I think the new digital age has created a new review network where places like Facebook groups and Reddit and Quora are so important. Because if I'm not doing my job as an insurer, my customers, my consumer base is going to talk about that in these forums. And there's a lot of great word of mouth, but there could be a lot of bad word of mouth if you don't do a good job. So I think that's what a lot of companies have to be held to a higher standard now is, hey, it's not just, you know, critics or acclaimed reviewers that are going to test, you know, how good you are. It's real people. And that's what we look at. You know, I look at Yelp reviews before I go to a restaurant. I'm not just going to say, oh, I saw this spot guy, you know, on television, I'm going to buy it. It's a big decision. You know, you want to go through the steps, make sure that we're top rated, that everyone else trusts us and we're fun and easy to understand.
- [10:27]
Daniel Murray
How do you get over, I know insurance is a very, I would say, not liked industry. So how do you get over the hums of, okay, someone posts something terrible on Reddit or they post a bad Google review on like, what is your action plan when you see something like that? Because Reddit has now become like the new Google search. Like people will search best pet insurance, Reddit or best something Reddit. So what are you, how do you deal with that if you get negative conversations happening in the back channels?
- [11:04]
Trey Farrow
I try and funnel every single, you know, review about Spot that I can directly to my email, my Slack account. If someone has a bad experience on Google bbb, it comes to me, my team, we address it, we reach out to the person personally and say, hey, I heard you had a bad experience. Tell us about it and we fix it. And a lot of the iterations and the A B testing that we've done is, hey, you know, I tried calling you guys and your service rep wasn't good or hey, I tried to email this photo and it bounced back for whatever reason. And sometimes, you know, it's an us problem, sometimes they overreact. It's a them problem. But the big thing is being open and honest to people and responding when appropriate and, you know, kind of letting people rant when they want to rant. You know, if I make a mistake, that's on me. And you know, it doesn't happen that often, which is great why we've been so successful. But I love boosting the good reviews as well. You know, we have 6,000 Trustpilot reviews, we have a 4.8 rating. We are constantly looking that over and seeing, okay, what's good? How do we make it even better? People like, you know that we offer perks for farmer's dog and dog collars. Great, let's go get more perks partners. People like, you know, multi pet discounts. Great, keep that up. Let's see how much, you know, more we can offer people. But it's really looking and not ignoring it. I think a lot of other companies are just ignoring what they see online.
- [12:40]
Daniel Murray
I want to ask you, like, how you walk that fine line because I think like, I mean, I do a podcast, I get bad reviews, good reviews, and there's usually 10x more people saying good things than bad things. But you always over index on that one person who's just going crazy on you. So how do you balance like not letting your team or you being discouraged versus on that bad review versus actually dealing with it? Because that could also take you down a whole path where you just are not focusing on all the good you're doing as well.
- [13:18]
Trey Farrow
I think the first question I ask myself is, is there anything I can do about it? You know, was this something that might have been my fault or do I immediately know it's not my fault? If someone's like, I hate your logo color, I'm like, I'm sorry, that one guy hates my logo color. I'm not going to change it. You know, hundreds of thousands of other people like it and I think that it's important to just compartmentalize that. But if someone says, hey, I hated, you know, that it took more than a couple days to get my money back, we're going to investigate that. And if it was, you know, a legit reason, like they were talking to a veterinarian, we were getting all the facts, that's fine. We're just going to have to let that one go. But if it's, hey, we messed up for whatever reason, you know, I'm going to fix it, I'm going to contact that person and see how I can do better. So just compartmentalizing it and making sure that you're not overreacting from time to time.
- [14:16]
Daniel Murray
Yeah, I want to go back and AB testing because, I mean, I've checked out your website. There's a lot of different things that are good about the website that people could lean on, but a lot of things you can a B test on your homepage, for example. So what are some things that you. I mean, obviously there's like your tagline, your yellow, I mean your orange button. Then you also have another like recognized by pet experts, trusted by pet parents, which is a good tagline. And then you also have a bunch of social proof. Then you also have the pets, like do AB test the animals. You a b test the social proof there. Do you able, like what are, like what are you thinking of? AB testing when you're ready. Testing.
- [15:01]
Trey Farrow
Yeah. For us being an industry where you don't really understand the value prop, I think it's important that we show people, hey, this is what we cover and this is how it works. So content for us is really important just because you don't know what it is. If I was a You know, lipstick brand, a soda brand. Like, I know what lipstick is, I know what soda is. I want to see pictures, I want to see, you know, reviews on that more than anything. So it really does depend on what your product is. I think that colors are great. You know, I actually worked at grubhub about eight years ago and they found that when they switched the checkout button from grubhub red to just like a go street sign, green, it increased conversion by 10%. So there are tests like that that'll prove to be really good for the company. But it does depend on what you are. And I think that people just have to have a good a B testing software. Whether they build that in house or get a third party, you know, it's a big part of your scale. And I think that a lot of people get too hyper focused on one thing and you just have to have a big backlog of, hey, what can work and why and make data driven decisions.
- [16:21]
Daniel Murray
Yeah. When you started the company, what was, what did you recognize was like the growth levers to, to scale this? You obviously saw there was a gap in the market by Europeans and US people not having pedicure. But what are the channels you first tackled? Could you walk me through the beginning stages of how you started to scale this business?
- [16:43]
Trey Farrow
Yeah, I mean, the best story I have is day one, you know, we set up the website, we're all excited, we press set live, and we're all looking at the same computer screen. We're like, all right, waiting for the sales to come in, but, you know, nothing came in. We got maybe a few clicks, one sale. And we were all wondering, well, what the heck? We set this live. You know, we put whatever digital flyers out into the world. It's not enough. You need to build an ecosystem. So the first thing we did is, okay, let's find some places to review us. And we got, you know, Forbes and Market Watch and we said, hey, we're the new pet insurance players in town. Can you write stories about us? When people search new pet insurance, best pet insurance, we show up. The next thing we did is, okay, let's start doing top of funnel. Let's do social media. No one else is doing social media. Everyone's going to the veterinarians and the adoption shelters. So let's put this out and just get top of funnel. They'll see spot, they'll say, what is pet insurance? They Google it and they say, oh, Forbes ranked these guys. That's pretty good. Now Forbes ranked us. They've seen Us on social, the last thing they need is that social proof. So then we bring in real reviews, user generated content, trustpilot reviews and say hey you've seen us. You know, these guys say we're good. Our customers say we're good. You're now on the website. The website says very clearly what you're going to get for this amount of money. And here's all of our good customer service stats. This is why you should go for us. You know the phrase I like to use is nuts. The thing to inspire people is need, urgency, trust and a money sign for affordability. So if you can get someone to understand they need it, you know, pets are expensive. You need this urgency. You need to get this before you know you have an accident because you get it after. We're not going to cover it. Trust, great reviews and then money. We're affordable, we have a great product.
- [18:50]
Daniel Murray
It's crazy because I mean pet lovers are the obviously have a dying love for their pattern. There is a need to do want to keep even saying the Statue said that 30% live longer. Everybody wants their pet to be healthy happy, just like their kid, like healthy happy. So how, how to do that? I mean it's, it's good that you're in a, an urgency market but there's also marketing to people who are thinking about getting pets or have families that have pets. Like are you thinking about that? So but I also see that your, your sign is very. Which other sites aren't always like this but like very like educational of because people don't know what pet insurance. So for example, like what is accident insurance? Like what is pet insurance? You're answering the question so that people don't have to go off your site to do the research. All the research is done on your site when you get there. Because even if you understand that you need pet insurance, you still. Insurance is complicated. Yeah, not everybody understands. They might understand that I might need this but they need to be educated. Like what do I actually need? Do I need this or this or this? And what stage of life am I in? What stage of life is the dog in all that good stuff.
- [20:15]
Trey Farrow
So that's exactly right.
- [20:17]
Daniel Murray
What are some underrated things that you thought wouldn't work, like tests or anything that you thought wouldn't work that ended up working.
- [20:27]
Trey Farrow
One of the tests we did was like a hyper detailed checkout, like final page. And I thought that people would just like to see okay, here's what you're paying, you know, checkout, move fast, get through the funnel as fast as possible because you don't want people to have to press a bunch of buttons or get distracted by stuff. But I think that the digital user today is really savvy. And we put, you know, hey, this is what this costs. This is exactly when this is going to start. Like we're going to send it to this email. Like, please make sure this is your billing address. Do you want direct deposit now? We just loaded that page up with more information and I guess people felt a little bit more reassured, like they didn't have to read all of it, but they knew they didn't have to cycle back for any additional information. It was all right there. So it was a lot of content and a lot of info on the page, but it did really well. And I think that, you know, it works for some demographics, some verticals and others it doesn't. You know, if I'm scrolling on TikTok, I go to spot and I want to get a quote fast during my lunch break. You know, that's a totally different customer than someone who's gone through, you know, five hours of research, talking to their spouse about it. And I think that that different personalization at every step of the funnel. I always thought that they can't be that different, but it really is. Sometimes, you know, one picture could make all the difference of, hey, you know, that's a primarily person focused picture. I don't really resonate with the person as much, but, oh my gosh, that dog looks like my dog. And figuring out, you know, what are the most popular dog breeds, see if we can understand what the person has, guess, and then put that dog breed in front of them on the website. All that little stuff makes a huge difference.
- [22:25]
Daniel Murray
Yeah. Could you talk about some of your funnels? What would they look like you just talked about? There's one from Instagram. What are the type of personalization funnels you have right now?
- [22:37]
Trey Farrow
I think the biggest part of the personalization is the customer engagement. So if you're coming from social media, you know, I know that you're not super warm, I'm not going to hit you, you know, every single day with an email or a text or whatever else. But if you're coming from like a comparison site or, you know, a direct referral from your employer, like, I know that you're really focused in on this and I'm gonna hit you as much as I can because I know you want it, give you the best discounts and just move you from stage to stage. So our big ones are social Media review sites, you know, friends and family is a huge one. If you're friends and family, I'm gonna say, you know, go see what X pet like I have the name from the referrals. I'll see, go see what Bucky saved last year. Bucky saved $800. Whatever is public information. I'll say that I'm not going to give anything. I can't. But people really like to know that we're the experts and not pretending so not saying hey this is the best for Bucky. It's hey, this is the best for a three year old Chihuahua. You know, I understand what's the best. I'm going to offer you the best and you can trust me.
- [23:58]
Daniel Murray
Yeah, I think, I mean people expertise is, builds trust. So if you can give the expertise up front, it's also, I mean but you have a lot of on your side. There's a lot of expertise through like social proof as well. So you definitely rely on that. I want to go into how are you using any AI or automate like AI in your workflow now that AI is becoming big, what are you, how are you using it? How is it improving your business Today.
- [24:29]
Trey Farrow
We use AI to create the rough drafts for some of our customer engagement journeys. So we say hey, this person's moderately engaged. Hit them with XYZ discounts and then we edit it from there. The other thing we're doing is large language modeling. So understanding hey, when we recommend this price, the customer usually has a really good experience or hey, recently, you know, three year old Chihuahuas haven't been needing as much of a top tier annual limit. Consider bringing that down, you know, so that people don't have to pay as much on their recommended plan. So we have a team of data scientists and I wouldn't recommend that for companies just starting out. I think it is a maturity thing that you can build into. But we have market mixed modeling that we do. We have, you know like churn prediction, you know, stats. If I say hey, I know this person hasn't made a claim in about a year, I bet he's going to churn once his renewal comes up. Let's tell him to go make a claim or go do something that's more so where we're seeing automation come in. But I do think the power of AI when it comes to claims adjudication and billing suggestions, you know, that's incredibly important. It's going to be a big part of the future.
- [25:56]
Daniel Murray
I want to go into a couple rapid fire questions.
- [26:01]
Trey Farrow
Let's do it.
- [26:02]
Daniel Murray
What's the best performing social channel for Spot.
- [26:07]
Trey Farrow
In terms of impressions and engagement? I would probably say TikTok.
- [26:12]
Daniel Murray
What's one thing every brand should test on social today?
- [26:19]
Trey Farrow
Test the first three seconds of your creative. Having an important and engaging hook makes all the difference.
- [26:27]
Daniel Murray
What's an overhyped marketing trend you're ignoring?
- [26:35]
Trey Farrow
I would say QR codes. It was a big thing back in 20202021 but I think we haven't really done much with them them.
- [26:44]
Daniel Murray
What's one tool that makes AB testing easier for you?
- [26:49]
Trey Farrow
We use a tool called statsig. It really helps with multi arm bandit testing and just ease of integration with our website actually.
- [27:03]
Daniel Murray
What's the most unexpected AB test you've ever seen?
- [27:07]
Trey Farrow
Most unexpected AB test was probably a next to blank page with just a CTA versus a completely decked out content page and they had totally different results depending on which group you showed it to.
- [27:28]
Daniel Murray
What's your favorite dog breed?
- [27:31]
Trey Farrow
Favorite dog breed? I don't have one but I love Belgian Malinois. I love how athletic they are and just energetic and cool.
- [27:42]
Daniel Murray
And last thing I ask everybody in this podcast is what is a marketing hill you would die on?
- [27:49]
Trey Farrow
Always tell the truth. You know I see a lot of marketers out there kind of stretching it as much as they can and it really backfires. You might have some great short term gains. It's not going to do you well in the future.
- [28:03]
Daniel Murray
Rapid transparency otherwise. I mean the trend of everybody in the last like few years is the lack of trust of institutions. So if you could be the most trustworthy institution, you're gonna definitely win. So also where could people find you and what you're doing and all that good stuff.
- [28:24]
Trey Farrow
You can check us out@spotpet.com any of our socials get spot covered. You can find us just about anywhere. We're in all 50 states in Canada so everyone should go get pet insurance.
- [28:36]
Daniel Murray
Well thank you so much for coming on and I appreciate it.
- [28:40]
Trey Farrow
Thanks Daniel, appreciate you having me on.
- [28:44]
Daniel Murray
Thanks so much for listening. Keep tuning in to hear more great insights from the coolest marketers from around the world. If you haven't already, make sure to subscribe and follow the Marketing Millennials podcast on Apple Podcasts, Spotify, YouTube or wherever you get your podcast. And if you like what you hear, I would greatly, greatly appreciate you giving us a five star rating. It helps bring more marketers into our community.