{"id":4657,"date":"2015-12-09T21:09:37","date_gmt":"2015-12-10T02:09:37","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/tuft-needle-honestly-crafted-mattresses-at-a-fair-price\/"},"modified":"2015-12-12T15:18:27","modified_gmt":"2015-12-12T20:18:27","slug":"tuft-needle-sleep-in-heavenly-peace","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/tuft-needle-sleep-in-heavenly-peace\/","title":{"rendered":"Tuft & Needle: Sleep in Heavenly Peace"},"content":{"rendered":"

The $7 BN mattress industry has traditionally been characterized by badly lit showrooms, a seemingly endless array of products with fancy names, pushy salesmen, opaque pricing layered with markups and discounts, and a cumbersome return process — all culminating in a buying process that leaves you unsure whether you’ve chosen the right mattress but certain that you’ve somehow massively overpaid. Start-ups like Casper, Leesa, Saatva, and Yogabed have set out to do to this industry what Warby Parker has done to eyewear, the so-called “bed in the box” model that makes simple mattresses, sells them online, cuts out the middleman (and accordingly, the price), and delivers to your door.<\/span><\/p>\n

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Tuft and Needle is one such business. With the tagline “sleep on an honestly crafted mattress at a fair price,” T&N offers a single product (the “T&N mattress”) for $350-$750 depending on size, on its own website and Amazon.com, with free delivery, 100-night trial, and 10-year warranty. Simple, affordable, and convenient — table stakes. Several key choices, however, set T&N apart from competitors and create a reinforcing link between its operating model and business model:<\/span><\/p>\n

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Focus on customer experience<\/strong><\/span><\/span><\/h4>\n

T&N began in late 2012 after co-founder JT Marino had a bad experience buying a mattress; naturally, ensuring seamless customer experience is a core value across the organization. All employees, regardless of role, go through a two-week customer service training program upon joining the company, so that they are equipped to interact with customers and address their questions. T&N solicits and responds to both quantitative and qualitative customer feedback, using analytics to customize the website according to customer preferences, and reaching out after every purchase to ask for detailed feedback and encourage returns from dissatisfied customers. These efforts haven’t gone unnoticed — T&N recorded revenues of $1M in 2013, and $9M in 2014, thanks to\u00a0word-of-mouth referrals\u00a0from happy customers.<\/span><\/p>\n

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Iterative product innovation<\/span><\/strong><\/span><\/h4>\n

T&N approach the mattress “like it was software”, iterating continuously in response to customer feedback. The current 10-inch T&N mattress has evolved from the initial 5-inch Japanese shikibuton model, reflecting over 30 changes made in the past year alone. The product innovation process also leverages T&N’s strong relationships with suppliers, who share their expertise in foam materials and provide material for experimentation. The result: a top-rated mattress within Amazon.com’s Furniture category, with 87% five-star reviews, Net Promoter Score north of 65, and return rate under 1%.<\/span><\/p>\n

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Single price strategy<\/strong><\/span><\/span><\/h4>\n

The T&N mattress costs the same every day of the year, with no holiday or referral discounts. While a single price strategy is not conducive to maximizing revenue, T&N uses it to reinforce its \u00a0customer experience and minimize hidden costs. The single price builds trust with the customer and ultimately increases customer satisfaction — it allows customers “peace of mind” that they paid a fair price for a quality product, without having to “jump through hoops to get the best deal,” or wonder after purchase if they did in fact get\u00a0a good deal. The single price eliminates costs associated with meeting surges in demand, such as hiring\/training costs for temporary workers and increased production overhead, and reduces cost associated with returns, by filtering out customers who are not excited enough about the brand to buy full-price and thus more likely to return the product.<\/span><\/p>\n


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Tuft and Needle shows that a values-driven business is able to drive close alignment between its business and operating models. Will it be able to maintain that alignment going forward as it scales and builds out a brick-and-mortar presence? <\/span><\/p>\n

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