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These Founders Put a Twist on Customer Discounts to Launch Their Startup

By Annabel Burba

These Founders Put a Twist on Customer Discounts to Launch Their Startup

Welcome to Founder Focus: Your go-to read for sharp, actionable insights from the people building the future. Each week, we tap into real stories, tested strategies, and hard-won lessons from founders who've been there.

Steven and Cyrus Loloi were in a unique position when they launched their home furnishings brand Joon Loloi last December. The brothers were first-time founders, and yet, they also had a reputation to uphold.

Collectively, Steven and Cyrus spent about 30 years working for their family business, Loloi Rugs, a wholesale rug brand their father Amir Loloi founded in 2004. Last year, Loloi Rugs sold more than four million rugs ranging from $500 to $25,000 in price, according to a spokesperson.

When the brothers launched Joon Loloi -- which sells furniture, decor, and lighting, in addition to rugs -- Cyrus says they wanted to be sure the brand wouldn't be "gimmicky and promotional" in a way that might reflect poorly on their family's more established business.

With this in mind, Steven and Cyrus crafted a marketing strategy that purposefully sidestepped common customer acquisition tactics, like offering 10 to 20 percent off when shoppers sign up for email lists. Those methods, Cyrus says, don't translate to loyal customers: "They sign up, they use that discount for the first order, and then they unsubscribe -- versus building a real, genuine community that's really interested in your brand and what you have to offer for the long run."

The brothers, instead, decided to make use of their existing connections by targeting trade buyers and positioning themselves as an industry-insider retailer rather than going directly to a wider customer base.

Many professionals in the construction and design industries have purchased textiles from Loloi Rugs and many who haven't are still well aware of the wholesaler's reputation. Thanks to Loloi's name recognition with these shoppers, Joon Loloi stood a stronger chance of converting them. Plus, because of their buying habits -- shopping for professional, rather than personal purposes -- they were more likely to become repeat customers.

In order to incentivize trade professionals to purchase their products, Steven and Cyrus offer discounts through an application-only program for interior designers, architects, builders, specifiers, and buyers. Members receive a 20 percent discount on Joon Loloi's products year-round, 20 percent off rug samples, free fabric swatches, priority customer support, early access to new arrivals and sales, no order minimums, and tax exemptions automatically applied when applicable, according to the brand's website.

Joon Loloi's trade program, which currently has more than 1,000 members, has helped the Dallas, Texas-based company grow orders by 46 percent month-over-month from last December to this July, according to a spokesperson. Joon Loloi declined to share revenue.

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