How We Saw Significant Growth With Gross Margin, Conversion Rate & Return Order Rate

Knife Aid
from Malibu, California, USA
started August 2019
alexa rank
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Start A Knife Sharpening Service

Hello again! Remind us who you are and what business you started.

Hi guys, my name is Marc Lickfett and I started Knife Aid together with two partners in January 2019. I have a history of starting digital disrupter businesses, and this is my 5th. The last 20 years have been very interesting in the digital space - pretty much any industry or product in 1999 needed disruption, and today the list of massive industries for major disruption is much smaller. The fact that we stumbled upon knife sharpening as a niche is extra fortunate, as it is a beautiful ancient craft that was about to die out. At the same time, it can be a powerful service to help reduce the number of knives that end up in landfills.

Through our very well-received appearance on Shark Tank we have inspired copycats all over the world from the UK to France and as far afield as the Philippines, as well as in the US. Luckily our service is super complex and hard to copy, and we have a clear first movers advantage, thus we feel flattered more than threatened. And more noise around knife sharpening will just help to build the market.


Tell us about what you’ve been up to! Has the business been growing?

2020 has been an odd year and we have used slightly different tactics throughout the year. Then Covid hit initially, Facebook had massive impression inventories, and we could significantly lower our CPA levels and started buying more traffic on Facebook. As other merchants started to catch up, and more business moved online, this advantage disappeared sometime in the summer.

Entrepreneurs need to make tough life or death kind of decisions quickly, based on limited data and often without hard facts.

At roughly the same time we started to worry about the length of the pandemic and started to switch to more conservative ways of boosting revenue/ profitability. To do so we tackled three main KPIs, namely gross margin, conversion rate, and return order rate. We managed to improve direct labor cost by a factor of three by introducing a commission-based salary model for our sharpeners. It was shocking to see how they must have been sandbagging on us.

We increased conversion rate by segmenting all traffic by source, landing page, and device, as well as through recording heat maps and then systematically and diligently fixing usability issues - no matter how small.

Lastly, we increased return order rates by optimizing our email marketing especially by setting up segmented Klaviyo flows.


What have been your biggest lessons learned in the last year?

Last year was like a Bootcamp for dealing with uncertainty. I have always found that one of the hardest parts of being an entrepreneur is emotionally and intellectually dealing with a high level of uncertainty. Entrepreneurs need to make tough life or death kind of decisions quickly, based on limited data and often without hard facts. 2020 took that demand to a whole new level, and it was not even possible to find historic references or guidance anywhere. So for me, the big lesson was to have colleagues, friends, and peers around whom I can speak openly and with whom I can define a new true north, a new way of understanding the situation, which can then be the basis for all those crucial decisions that need taking.

2020 also proves again that tough times require leadership. And while some people are caught in the headlights, put their heads in the sand, or simply run away, others can and will rise to the occasion and lead. For those this crisis presented and still presents an amazing wealth of opportunity.

What’s in the plans for the upcoming year, and the next 5 years?

We have only started to revitalize a market that has the potential to be hundreds of million dollars annually, so we will stick to that plan very closely. We will have to continue educating US consumers about the importance of knife sharpening, the joy, and increased safety through sharp knives, as well as the importance of keeping knives out of landfills. To speed up that growth in the market we have some great cooperations in the pipeline, which I cannot share just yet. We have managed to revitalize the interest in knife sharpening, which has been noticed by several major brands and retailers, and that is great fun. We also have some more product innovations planned, and there is still a lot more we can achieve with technology.

Ideally, Knife Aid will be a household name in five years, and consumers will be as aware of the importance of knife sharpening as they are on their annual service on their car. We have an amazing team at Knife Aid - the majority of our employees have been with us from the very beginning - and I am looking forward to seeing those people grow with the company.

Have you read any good books in the last year?

As crazy as last year has been, I turned to books that are a bit more esoteric than I usually would.

I have read The Subtle art of not giving a f*ck by Mark Manson, and that helped to retain perspective on what is important and what is not. It was eye-opening as to the fact that we get to choose what we give a f*ck about, and by doing that we can choose what and how we deal with what we are facing.

I have read Reboot by Jerry Colonna, and I cannot recommend it highly enough. The book is full of touching entrepreneurs’ stories and the people and hard knocks behind those stories. Our businesses, successes, and failures are so closely tied to who we are as a person and there is much to learn. I would recommend this book to anyone who deeply cares about their business and loves the mad ride that is entrepreneurship.

Advice for other entrepreneurs who might be struggling to grow their business?

My personal experience is that it is all about getting into your customer’s heads to understand their journey, mindset, needs, values. If you do not grow and your business does not resonate with customers, there is likely an issue on a fundamental level. It is literally about walking the famous miles in their shoes, to answer the important questions like what (product, price), where (channel), when (channel and marketing), why (messaging, price), etc.

When I worked at Mercedes many years ago my boss’s boss a (really big cheese) would always walk the entire dealership in the morning, pick up stray papers, open or close car doors, talking to staff and customers, and making sure everything was perfect from a customer's point of view. His Head of Sales would just sneak into the back door and was afraid of the customers and business The Head of Sales did not succeed or last. I think loving and understanding your product and customer goes a long way, for all the more technical stuff there are actually good tools and outsourcing opportunities, but you can never outsource your love for the product or customer, and at the end of the day it is that love that shines through and lets the business succeed.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

Marc Lickfett, Founder of Knife Aid
Pat Walls,  Founder of Starter Story
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