15 Oct What Makes Dollar Shave Club “F**king Great”
Unless you’ve been living in the literal woods playing Pokémon Go for the past week or so (entirely plausible), you’ve already heard the unicorn success story taking the Internet by storm: Unilever is acquiring Dollar Shave Club for a cool $1 billion.
It’s no surprise that the nothing-to-unicorn story – the stuff startup and VC dreams are made of – is making waves. Amplifying the effect is that Unilever is paying about 5x the revenue DSC is expected to earn this year. This, on top of the fact that DSC is not yet a profitable company.
It adds up to a hefty premium, and one that is innately newsworthy. What, exactly, is Unilever paying for?
Some answers include a shortcut into the direct-to-consumer ecommerce model that has disrupted traditional retail, as well as entry into the men’s shaving and grooming market. DSC captured about 15% unit share of the shaving market last year; Unilever now won’t have to start from the ground up in a vertical still dominated by Gillette.
These all have merit, but in truth: What makes Dollar Shave Club so valuable is its brand.
In 5 years, the company was able to establish the following:
- Actively engaged customers: 3.2 million subscribers and counting
- Strong retention/engagement: A polished brand identity, great content, combined with data-driven marketing tactics
- Plus, deep insights into consumer base: Not only millennials, but millennial males, aka the white cheetah/Snorlax of ecommerce
In other words, the biggest win for Unilever in acquiring DSC is acquiring the unique position DSC has managed to carve out for itself in brand identity and engagement. Hilarious viral video aside, what makes DSC truly “fucking great” is how well they understand their customers – and how to consistently deliver value in a way that enhances their brand.
Full disclosure: DSC is a longtime partner of ours at ReSci, but this only gives us the firsthand ability to vouch for this. We’ve seen their dedication to making data-driven decisions to address the needs of their customers again and again, all while staying true to that special offbeat DSC flair.
In fact, we can break it down to three key rules they follow:
They put customer knowledge first.
DSC invests heavily into understanding its customers – according to Unilever, DSC’s “unique consumer and data insights” are part and parcel of the company’s billion-dollar appeal.
For example, DSC had an exit survey in place for churning customers, which is a common practice for subscription companies. What sets DSC apart, however, was that they specifically sought to use this data to uncover insights that could then be turned into win-back tactics.
This is the core of their — and any company’s — good retention strategy. They looked at their customer data to figure out what factors were disrupting their brand-consumer relationship, and actively worked to correct them.
They invest in those insights.
This might seem like a no-brainer, but for a vast majority of companies, data-driven insights don’t always translate into data-driven actions.
In DSC’s case, they fully committed to putting customer information into action. We were able to pinpoint the most common reasons for departure, and the underlying pain points for each. They then put their impressive creative team on the job, coming up with 10 differently tailored creatives that addressed each reason.
Above all, they stay true to their brand.
The key to building a brand that sticks in people’s minds is personality and consistency. DSC’s brand’s tone was set by that infamous viral video, and they’ve been committed to it ever since.
Each of the 10 creatives that addressed churning customers was carefully crafted to fit into their brand. By doing so, not only did DSC reach out to customers with the specific reasons for leaving, thus putting customer insights into action, they also sent a reminder of the kind of fun, engaging content churned subscribers would miss out on.
In many ways, Dollar Shave Club is very much a unicorn company: in addition to having a great solution to an overserved market, they were led by a telegenic CEO with great comedic timing. (We’re looking at you, Dubin!)
The fact remains, however, that DSC’s success is in large part thanks to their dedication to building lasting relationships with their customers. It underscores the importance of all brands to invest in those relationships — although we unfortunately can’t guarantee $1 billion futures will follow. Sorry, we’re sad too.
Learn about retention marketing strategies, download our free Scientific Marketer’s Guide: Retention Marketing & Predictive Analytics