MARKETING STRATEGY: DOLLAR SHAVE CLUB
Strat-e-gy (noun) a plan of action or policy designed to achieve a major or overall aim.
Strategy has always intrigued me. It started when ‘Survivor’ first aired on CBS. My passion for strategy started then, back when I was 9 years old. Survivor is a complicated game with many different archetypical strategies. What worked for one player in one season, didn’t work for another in a different season. This concept can be applied to all facets of business – Apple hero products, pop culture relevancy of Madonna vs Beyonce over the years, Dollar Shave Club vs industry giants and my personal favorite, Alterra vs Vail. Get ready friends, we are going to talk strategy over the next few weeks using my favorite brands as the muse.
Let’s first sit with my favorite disrupter brand, Dollar Shave Club (DSC). DSC essentially came out of nowhere in 2012 to become one of the most successful subscription services on the market. Let’s get started!
A brief overview of DSC’s business model as I see it –
· DSC works on a trading model. It procures goods in bulk from other companies and sells them at a profit (initial quality of their blades was poor)
· The company acts as a club whose members are subscribers to their products. They use a monthly auto-renewal subscription
· DSC believes in investing in its customers. By this I mean, DSC doesn’t charge profit to convince the customer to be part of the club. A customer becomes a member of the club when he buys the first product. Ie. The strategy of ‘just $1 for any product’ lets the customer pick any product for $1 when they buy from the club the first time, then upgrades into higher priced products the following month.
DSC marketing strategy disrupted the personal care industry in a big way with the release of the infamous, iconic and hilarious video ad (available here) produced by its founder, Michael Dubin, in a factory for only $5,000. For you marketing geeks, this ad crashed their website within an hour of publishing (content/storytelling marketing at its finest!). DSC disrupted the market by looking at the macro environment and identifying a white space that large companies like Unilever didn’t see or neglected to take advantage off. This whitespace used consumer propensity for Amazon Prime combined with millennials technological nature and their psychological desire to be a product/service innovator. The main draw of DSC is their cheap products, that start at a dollar, and deeply discounted shipping and handling fees. The other primary benefit of the subscription-based strategy is convenience. Who has time to pick out a razor? There is no FOMO to be had when purchasing a razor! The aforementioned played into their marketing strategy of using consumer comfort for online purchasing and saving consumers time by authorizing repeat transactions for personal care items that save the consumer time.
Another brilliant strategy, that is widely used by brands these days, is DSC built their brand almost exclusively through a video marketing strategy on widely used platforms like Facebook and YouTube. Reports state that within 48-hours of the debut of their infamous 2012 ad, they drove around 12,000 signs up for their razor subscription. By that summer, their customer base rose to 330,000! Just four years after their launch, Unilever acquired DSC for a reported $1 billion in CASH. I’ll wait while you pick your mouth up off the floor and no, your sock/undie club idea isn’t a $1 billion idea. Sorry.
Before their sale, DSC continued with their significant content and brand marketing strategy by producing relatable creative while leveraging innovative online and e-commerce experiences and engaging their social followers with a brand approachability strategy – aka relationship marketing with a touch of brand humanization. DSC strategy offered a real solution using a simple value proposition. They created a unique customer experience which, in turn, consumers could socially share or mention to their coworkers. They were one of the original ‘surprise and delight’ (aka experiential marketing) companies using their packaging and digital presence to cultivate loyalty by providing what the market carved. DSC infused their disrupter nature into all components of their business from branded boxes, email welcome series, personalized shaving products and occasional free samples to their “Bathroom Minutes” e-newsletter. Digestible content for your “time” in the restroom or the target markets busy life (reminder, millennial men were originally DSC target market). The content is simple, relevant and inexpensive to distribute but again identified a white space to take an ordinary product and made it an extraordinary experience for the customer. This emotional and practical ‘delight’ make subscribers want to spread the word. DSC knew what they were doing here, they realized the value of maintaining their existing relationships and what this would do to the bottom line and their customer lifetime value. I can’t tell you have many businesses I have seen that cannot effectively execute on this! And it is such a simple concept!
DSC isn’t another razor company, it’s a brand with a distinct humor, culture and lifestyle. Its relatable style and tone have remained relevant to its key market and form its marketing strategy. Their strategy is focused on spending time on building and maintaining relationships. Relationships that began with possibly the greatest start up video of all time. DSC embraced smart storytelling at a greater scale than traditional advertising offered - all at a fraction of the cost! DSC nailed their strategy and should act as a light to all of us. Their strategy was successful because they knew who they were, their position in the space, how they differed from their competition, knew the ins and out of their target market and chose to spend their time on cultivating relationships through content that resonated. DSC has cleverly blended an economical and convenient product along with an entertain and relatable positioning which helped them poach customers from the market leaders like Gillette and Schnick. Gillette even started its own shave club to counter this competition, bet you have never heard of it.
