The article was written by Patrycja Kościołowska in cooperation with Sublime and originally published by enjoyGrowth!

The idea for Psi Bufet

PsiBufet is not a random case that came out of Excel calculations. Already in 2012, Piotrek Wawrysiuk was running a home animal hotel, where one of the dogs required cooked food. That was the moment he realized that perhaps other dogs would also like to eat good food, and their caretakers would be willing to pay for it. In January 2013, the first customers tested the food, and the company officially launched in 2016, making tremendous progress since then.

In 2020, PsiBufet secured its first round of funding in what’s called a pre-seed, receiving 1.6 million PLN for “setting up production and warehouse, establishing a digital product, hiring key team members, and acquiring new customers.” Another round of funding occurred in 2021, amounting to 5 million PLN, largely dedicated to retention. In April 2023, PsiBufet merged with ButternutBox from the UK and is aiming even higher. It is a very interesting d2c business from the pet-tech industry that operates in a subscription model with the data-driven approach.

Go-to-market strategy

Product:

• meals are cooked with human-grade meat, which means meat that can be eaten by humans,
• no grains or harmful ingredients are added to the food,
• at start 4 flavors, currently – 8

The food from PsiBufet is sent in branded, specially adapted for frozen products cartons. The carton also plays an important role in the brand’s strategy, and its visually attractive design is often photographed by customers and posted on social media, increasing the company’s reach.

Target audience:

• dog-lovers who want to take care of their dog’s nutrition, and also use other services such as groomer or behaviorist. Often over 40 years-old, have raised children.

Business model: One time purchase & subscription model

From the very beginning, we wanted PsiBufet to be as convenient as possible for customers. That’s why we opted for a subscription model. Thanks to it, our customers don’t have to remember to buy food regularly, and we can be sure that they will always have fresh, cooked meals for their dogs.

Piotr Wawrysiuk, CEO of PsiBufet

Since the very beginning, the business has been based on a simple test that you must fill out to create a diet tailored to your four-legged friend. In the nutrition of dogs, such issues as: gender, age, eating habits (e.g., whether it is a picky eater), physique, activity during the day, and allergies are extremely important. Currently, the test consists of 13 questions, which are short and illustrated with illustrations to make it as easy as possible to answer them. Selected screenshots from the individual steps:

After the test, you get a result: 

There is a the choice: 100% of demand or mix:

There is also an indication of what kind of stock to make → economic or just for the time indicated:

In the last step, the order result appears, as well as the plan for the next one, where we can choose a two-week stock.

At the checkout stage, it is great to provide assurance of the support of the Customer Love team:  “A team of qualified dog lovers will be happy to help you with any questions related to PsiBufet.”

The beginnings of the company were about acquiring customers among friends and family, as well as their extended acquaintances. In this way, we managed to reach dog owners who tested the product and service and provided super important, high-quality feedback that had a strong impact on the further development of PsiBufet. In the initial phase, Piotrek personally cooked and delivered the product to addresses in Warsaw, Poland. Thanks to conversations with these customers, he was able to better understand buyer personas, their needs, and purchase barriers. These meetings allowed us to build our first acquisition strategy, which, especially with the use of digital channels, enabled us to reach the first anonymous customers on the Internet.

A big challenge for us at the beginning was being the first player in a new category that customers didn’t expect and didn’t fully understand. In the world, the main categories of dog food are: dry, wet, raw, and home-cooked. We are pioneers of the Fresh category in Poland. As a result, in the course of our acquisition activities, we also had to properly educate customers and explain to them what our product is to convince them to make their first purchase. Therefore, from the very beginning, a very important channel of communication with potential customers was our blog, which we developed based on the creation of high-quality content in cooperation with experts in the field of dog nutrition.

Maciej Baranowski, Chief Experience Officer at PsiBufet

Scaling a business

Testimonials have been a key part of the strategy from the very beginning, which legitimizes the product.

Social media are the main channel for acquiring new customers. They serve several functions:

• They build the image of a brand that is close to its customers and cares for them in an individual way. Dogs are a very grateful topic on social media, where their owners are happy to share their materials on the one hand, and on the other hand, they are looking for this type of content on the internet.
• They are a place for user generated content, where PsiBufet customers post photos tagged with the brand, or using hashtags like #psibufet or #psibufetgang.

• That is where collaborations with influencers are carried out, which generate content and, above all, discount codes are passed on through them:

Paid Search is a fundamental channel that “scoops up” potential customers from the market.

Consumer tests. This is one of the best forms of product quality confirmation . They collaborate with certified dog behaviorists and trainers, for example:

Case study: A data-driven approach to business model change

Problem: PsiBufet was acquiring new customers, but revenue was not growing at the projected rate.

There were a few reasons for this:

1. Some customers were using one-time orders and not converting to the subscription model — these customers had a lower retention rate.
2. Some customers were subscribing, but with the default payment of P24 and Blik, which were faster but meant that the customer had to pay each time before the order was shipped. As a result, customers forgot to do so. From the perspective of a company that produces meals for dogs, this is one of the main aspects that prevents good estimation of the required products, as well as the production of food in the right quantity.

The answers to the above questions were decided to be sought first in the data. The analysis of the PsiBufet store was built on the Sublime , which from the beginning combined media data, web tracking from Google Analytics, and sales data from the e-commerce platform. This made it possible to segment customers in any way (e.g., into one-time and subscription customers) and to study their profitability (Customer Lifetime Value and Customer Acquisition Cost). In-depth analysis allowed to identify key segments from the growth perspective:

• A huge difference was discovered in the retention rates and customer lifetime value (Customer Lifetime Value) for one-time customers and subscribers.
• Within the subscription segment, a subsegment with the default payment by credit card was identified, which was characterized by significantly higher LTV and higher retention rate.

The results of the analyses led to a change in the company’s strategy. In June 2021, the decision was made to discontinue one-time orders, which of course immediately had an impact on sales results. They also started looking for the reasons in the data and, thanks to the analysis of the customer conversion funnel, it was possible to identify that customers were abandoning at one of the last steps of the order. To sum up: customers are interested in the product, express their desire to buy it, but there is a barrier that prevents them from doing so. It was therefore assumed that:

• Customers expect a wider choice of payment methods and are afraid of paying with a card → this is not the most popular payment method in Poland.

In order to solve the above problems, among others, the following was implemented on the website:

• Information that the payment is safe (on one of the last steps of the order)

Results:

• Retention increased by 80%.
• The customer acquisition rate (CAC) and conversion rate (CR) were measured throughout the period, and after optimization, similar levels of CAC and CR were achieved as with one-time payments → this is also a great result, considering that mentally a subscription is a more difficult form of purchase for a customer, as it requires a “commitment”, even if it is cheaper than a one-time purchase and can be canceled at any time.

Since June 2021, PsiBufet has grown 9 times and is still growing.

Key takeaways from this key business change:

1. It is necessary to understand customer purchasing patterns to confirm product value.
2. If you make a decision about the model, stick to it – half measures don’t work.
3. In any case (subscription-only or hybrid), be prepared to overcome many barriers in order for the model to work.

 

What is more, Sublime data shows that it is easier to retain subscribers, but more difficult to acquire them.

Business development plans

In the first half of 2023, ButternutBox acquired 100% of PsiBufet, which is to become a regional hub for Central and Eastern Europe. Further customer acquisition is planned, but activities will also focus on retaining existing customers. To this end, additional products will be implemented, which will make it possible to increase customer LTV. 

PsiBufet is a very interesting example  definitely worth watching for its development. First, they were pioneers in their category, building new purchasing behaviors by offering personalized catering for dogs. Second, they are a data-driven company that makes business decisions based on data. This is why they have only remained with the subscription model. Third, they are developing their product offering based on LTV. Fourth, they are a creative team that enjoys marketing, while also doing a lot of good for their customers and their dogs.