Dollar Shave Club is a catchy name for a company that uses subscription marketing for one thing: affordable razors delivered monthly to your door. Sound too simple to work? That’s exactly what co-founders Mike Dubin and Mark Levine were banking on.
Mark and Mike met at a party in 2011 and, through the course of the night, realized that they shared a mutual frustration with expensive and inconvenient options for buying razors. Apparently they weren’t alone.
From their humble headquarters (aka Mike’s living room), the pair could not have predicted their impending popularity. Consumers jumped at the idea of a cheap and convenient alternative to expensive store-bought razors, and the friends used innovative marketing tactics to spread the word about their new project.
Between sensational YouTube advertisements and well-placed social media campaigns, the Dollar Shave Club exploded with members. They now offer monthly packages with a line of shaving products, like butters, oils, and serums, to complement the three razors they offer.
Mike and Mark’s solution to their shaving complaints is one of the most phenomenal examples of subscription-based sales on the market.
The Rise of Subscription Marketing
Like Dollar Shave Club, hundreds of retailers are taking advantage of online shopping alternatives with America’s current obsession with subscription boxes. Packages are delivered monthly with “surprise” goodies inside, much like a grab bag. Among the top selling subscription boxes are Birchbox, StitchFix, Fabletics, and Dollar Shave Club. They are marketed as more than a product; it’s an “experience” and a new way to discover unfamiliar brands. Every day, new companies are popping up, offering monthly deliveries of their own, including everything from makeup and dog treats to fresh vegetables and exotic wines.
The benefits of this business model are numerous. Subscription marketing plans allow companies to more easily forecast their monthly income revenue and predict customer buying patterns. It limits seasonal fluctuations. Overhead costs are lower for online retailers, and brand loyalty is (somewhat forcibly) increased. But some consumers are becoming leery of the commitment involved in buying products from a subscription-based company, put off by the difficult cancellation process or the fear that their buying needs will change in the future.
While a subscription-based business model can lead to greater customer retention and brand loyalty, it has the threat of detracting commitment-phobic shoppers. Dollar Shave Club seems to have found the sweet spot when it comes to marketing their razor subscription service. Their recipe includes: simplicity, originality, consistency — and a little bit of profanity.
Less than a year after bonding over razor woes at a party, Dubin and Levine had created a subscription marketing plan and partnered with one of the world’s leading razor manufacturers. So how did this mutual dissatisfaction with razor prices result in $120 million in sales this year alone?
Less Is More
Dollar Shave Club excels because it is simple, necessary, and fun. The sign-up process is a breeze for even the least computer-literate customers, and they bank on the idea that everyone needs clean, sharp razors on a regular basis.
Dollar Shave Club’s products feature “simplicity and precision.” Knowing that their demographic values simplicity, DSC incorporated these same features into its marketing style. It makes sense to find the features and benefits of your product and inject them into the advertising campaign. Consumers prefer your product because it’s edgy and controversial? Make your advertisements even racier.
Communities Create Company Loyalty
Between their entertaining advertisements, focus on customer service, and undeniable charisma, Dollar Shave Club has nailed down its brand identity. In the past three years, sales have grown from $4 million to $120 million, and its leaders attribute their success to a unique focus on customer retention. Mike says, “It doesn’t do any good to spend money acquiring a new customer if you can’t keep them around.”
Mike and Mark believe what we at The Newsletter Pro have been saying all along — relationship-building increases retention and should always be a top priority. The cost of acquiring new customers is too great for one-time buyers. Subscription marketing is one solution to this challenge because it requires a monthly, predictable purchase from each consumer.
In order to maintain your customers, you must create an exclusive community. The word “club” invokes a sense of community — or an exclusive group. Therefore, you aren’t only paying for a product, but paying to become a member or an insider.
Consistency Is King
When you find your advertising style, stick with it. Consumers appreciate consistency and become cautious when brands continually reassess their identity.
We’ve all seen those companies that are seemingly in an identity crisis — flip-flopping from one spokes-character to another. The Dollar Shave Club’s quirky YouTube videos and social media advertisements have remained consistent over their company’s lifespan. Subscription companies are working to build the trust of the consumer before they even buy in, and we all know how important consistency is in building trust.
Personality Speaks Volumes
Sometimes market research and marketing jargon can only take you so far. Ultimately, injecting your unique personality into the brand will enhance your product’s differentiation.
In addition to the business side of their marketing, consumers are delighted by Dollar Shave Club’s edgy and creative ads that contain pop culture references and (almost) inappropriate language. Their website content — originally written by Mike himself — reads like an inside joke from a personal friend. And as a consumer, you become in on the joke. They are a combination of cool, funny, and hip — without trying too hard.
Take the product descriptions, for example. The original $1 razor is known as “the humble twin” because of its two-blade construction. It is described as “a great basic shaver for guys who dig simplicity and precision. Reliable — this is the ’82 wagon that starts when it’s below zero.” The Executive razor is touted as “The final frontier — it’s like a personal assistant for your face. This blade comes from the future and lives in outer space.” Even their packaging materials are fun and unique. One box reads, “‘I like shaving with a dull razor’ – No one, ever.”
Studying all the data in the world can’t make up for originality. If all of your competitors study the same information, what makes you stand out? Sometimes it requires a risk, an eccentric advertisement, or an unconventional marketing strategy to get your name out there.
Beyond the Bare Minimum
And, no surprise to us Newsletter Pros, Dollar Shave Club uses content to its advantage with their targeted blog, The Bathroom Minutes. This extra avenue of communication with buyers also utilizes DSC’s trademark quirkiness to entertain and inform.