Latest / Small Business Success with Fexingo: Local Companies, Main Street Stories, and Community Commerce / How a Local Mattress Store Beat Online Brands with a Comfort Guarantee
Transcript
- Lucas: Last week I was talking to Mark, the owner of City Sleep, a two-location mattress shop in Portland. In 2023, he was losing sleep over online mattress companies taking his customers. Luna: I can imagine. Every ad is for some bed-in-a-box you can order in minutes. How can a local shop compete on price or convenience? Lucas: Right, and that's exactly what Mark was thinking. He couldn't beat them on price, and he couldn't beat them on delivery speed. But he realized there was one thing he could do that no online retailer can: let the customer actually test the mattress, and then adjust it to their exact preferences. Luna: Adjust it? Like, change the firmness? Lucas: Exactly. So City Sleep started offering a 90-day comfort guarantee. But rather than just letting you return the mattress for a full refund, they have a process where you bring it back to the store, and they can either add or remove a foam layer to change the feel. It's like a custom fitting for a mattress. Luna: That's actually brilliant. I remember reading that many people return bed-in-a-box mattresses because they're too firm or too soft, and the company just ends up wasting the return. City Sleep turns that into an opportunity. Lucas: Yeah, and it's not just a gimmick. Mark told me that about 70 percent of customers who used the adjustment service ended up keeping the mattress. And over 90 percent of them said they would recommend City Sleep to a friend. That's a huge retention rate. Luna: So how does it work logistically? I'm picturing a warehouse full of foam layers. Lucas: You're not far off. City Sleep works with a local manufacturer that produces compatible foam toppers in different densities. So they stock a small inventory of these toppers in the store. If a customer wants a softer feel, they add a plush topper. If they want firmer, they remove a layer from the mattress core itself. Luna: So they're literally customizing the mattress after it's been used. That's a service no online company can match. Lucas: Exactly. And here's the kicker: the cost of the adjustment is only about fifty dollars for the topper, and City Sleep covers that as part of the guarantee. Mark said the cost of returns—the logistics, the landfill fee, the lost sale—was way higher before. Luna: This episode is a great example of how small businesses can win by offering something big companies can't. If you found this useful, you know what keeps the show going—listener support. You can help us stay ad-free at buy me a coffee dot com slash fexingo. Lucas: Yeah, it's a small way to keep these conversations coming. So back to City Sleep—Mark also changed his marketing. He stopped competing on price and started advertising the guarantee. Luna: I bet that made a big difference. People are scared of making a bad purchase on a mattress, so a risk-free offer is powerful. Lucas: Exactly. They put signs in the window: 'Don't buy a mattress until you've tried our 90-day comfort guarantee.' That alone increased foot traffic by 25 percent in the first month. Luna: Did they face any challenges with the adjustments? Like, customers expecting a free upgrade? Lucas: Sure, there are always a few, but Mark trained his staff to set expectations upfront. They explain that the guarantee covers a single adjustment to get it right, not unlimited changes. And because the adjustment is done in-store, the customer sees the work happening, which builds trust. Luna: That transparency is something online companies can't replicate. They ship you a box and you're on your own. Lucas: Right. And Mark said once people see the foam layers being swapped, they understand the value. They end up more satisfied, and they often buy pillows and mattress protectors too. The average ticket for adjustment customers is about 30 percent higher than for other customers. Luna: So the adjustment becomes a sales opportunity. That's smart cross-selling. Lucas: Exactly. And the numbers bear it out. City Sleep's revenue in the first year after launching the guarantee was up 40 percent year-over-year. Mark told me his return rate dropped from 12 percent to under 3 percent. That's huge for a mattress retailer. Luna: A 3 percent return rate? I think the industry average is closer to 20 or 30 percent for online purchases. Lucas: It's true. Most bed-in-a-box companies accept returns as a cost of doing business. But City Sleep turned that cost into a service that actually builds loyalty. Mark even started a referral program where adjusted customers get a $50 credit for each referral. Luna: That's a virtuous cycle. Happy customers become brand advocates. Lucas: Yeah, and he told me that referrals now account for about 20 percent of new customers. That's organic growth without any ad spend. Luna: One thing I'm wondering: does this model work for any local mattress store, or does it require a relationship with a local manufacturer? Lucas: Great question. Mark said the key was finding a foam supplier willing to work with small quantities and quick turnarounds. He started by calling local foam distributors and eventually landed on a small factory just outside Portland. So it takes some legwork, but it's replicable. Luna: And the cost of stocking the toppers isn't huge, right? A few dozen toppers per store maybe? Lucas: Right. He initially ordered a set of toppers for each of the three firmness levels—soft, medium, firm—and that covered most requests. As they grew, they added a 'plus' and 'extra firm' option. Total inventory cost was under $2,000 per store. Luna: That's a low barrier to entry for a potential game-changer. Lucas: Yeah. And Mark's advice to other small business owners is to look at the biggest pain point your customers have—the thing that stops them from buying—and turn that into your core service. For him, it was the fear of a bad mattress purchase. Luna: Instead of fighting on price, fight on trust. That's a lesson that applies far beyond mattresses. Lucas: Absolutely. Whether you run a clothing store, a hardware shop, or a coffee roastery, think about what customers worry about and see if you can create a process that removes that worry in a way a big box store can't. Luna: And the beauty of a local business is agility. City Sleep went from idea to launch in about six weeks. Lucas: Exactly. So if you're listening and you run a small business, maybe ask yourself: what's the one thing customers hesitate on, and can I build a service around removing that hesitation? That might be your edge. Luna: Great episode. Thanks for sharing that story, Lucas. Lucas: Thanks, Luna. And thanks to Mark at City Sleep for being so open about his numbers. It's rare to get that level of detail.