In this Kassenzone episode, Karo talks to Michael Hurnaus, founder and CEO of Tractive. The company offers GPS and health tracking for dogs and cats and combines hardware with a subscription model. A lot has happened since the last conversation two years ago: The number of users has risen from 1 million to 1.3 million and the turnover is now over 100 million euros in annual recurring revenue. The churn rate of less than 2% is also very impressive — the average customer stays over four years — better than Netflix!
Michael explains why Tractive's success is heavily influenced by early market entry and a radical focus on its core business. The company is now established in Europe, the USA and Canada — the next step is Mexico. In order to stand out from - even more manageable - competition, tractive relies heavily on local ambassadors and user-generated content. Because category awareness and the knowledge of potential customers about the advantages of the application over simple tracking tools such as air tags remains one of the most important challenges.
It is also about the new business model: pet insurance. Michael gives exciting insights into why strategic partnerships have great potential in this area. TikTok Shop is also an issue — what opportunities are there for Tractive here? And what hurdles are there in specialist retailers, where tech-savvy personnel are often missing?
In this episode, you can hear which sustainability strategies Tractive is pursuing and even more about their success story and challenges in the animal market!
Key insights
🐶 From GPS tracker to health all-rounder: Tractive has evolved from a GPS tracker to a comprehensive health tracker. In addition to determining your location, it now offers analyses of activity, sleep and, soon, heart and respiratory rates. In this way, health problems can be identified and prevented at an early stage.
🌍 Global expansion with focus on: Tractive is expanding to Mexico, but remains focused on existing markets. Europe and North America offer enormous growth potential. Despite global success, the focus is on continued market growth.
💰 Subscription model as a success factor:Tractive sells trackers with a subscription model that ensures recurring income and customer loyalty. Customers pay monthly or annually for full functionality, including mobile communications and data analysis.
🤝 Strong customer loyalty: Tractive has a low churn rate of less than 2%, which indicates high customer satisfaction and strong brand loyalty. Customers appreciate the benefits and reliability of the product and stay for an average of over four years.
📈 Impressive revenue growth: Tractive has reached the mark of 100 million euros ARR — through subscriptions alone. Total revenue, including hardware, is even higher. The growth confirms the success of the business model and increasing demand.
📣 Market education challenge: Tractive must educate customers about the benefits of health trackers as many are unaware of their benefits for pets. There is also competition from cheaper but less functional alternatives such as AirTags.
💻 Sales via online channels: Tractive focuses on online sales via Amazon and direct-to-consumer, as stationary retail is less relevant due to product complexity and subscription model. Through a strong online presence and digital marketing strategies, the target group is addressed in a targeted manner.
🔮 A vision of the future with potential: Tractive plans to expand its network through partnerships with veterinarians, insurance companies and companies. Tractive sees potential in telemedicine in particular to provide veterinarians with more data for better diagnoses and treatments. Cooperation with companies from outside the industry, such as automotive manufacturers, is also being considered.
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