Dollar Shave Club may go down in history as one of the fastest growing online consumer products companies ever.
Bursting onto the market in 2012 with a now-famous explainer video that went viral, DSC quickly attracted millions of subscribers, challenged the 800-pound gorilla in the market (i.e. Gillette) and was acquired just four years later by Unilever in a $1 billion all-cash transaction.
That DSC viral video certainly didn’t hurt but to say it was the secret to their hypergrowth success would be selling them short. The fact is, DSC came up with a very simple and compelling brand story and then they focused 100 percent of their resources on how their customers experience that story. Let’s unpack their strategy a bit more and explore a few of the secrets to hypergrowth e-commerce success.
A Reason to Care and Listen
If you run an e-commerce business, regardless of industry or product category, you know intuitively that in order to scale your business you need to attract the right kind of visitors to your site. And by “the right kind” we mean that they represent your target audience. These people have wants and needs that you can fulfill and are qualified to buy your products or services. You need to give your target audience a reason to care about your brand and a reason to listen to your story before they will engage or purchase from you.
DSC was able to get people to care and listen by simply shining a light on a well-known problem: “buying razors sucks.” That simple statement forms the foundation for the DSC brand story – it is the answer to the question: why does DSC exist? The answer: because buying razors sucks! With a simple and clear “why,” you now have the attention of the audience.
A Reason to Engage
We wholeheartedly agree: buying razors sucks! So what? Tell me more.
Your target customers have a lot of other salespeople and marketers vying for their attention. They are constantly bombarded with sales pitches, white papers, infographics, free trials – a neverending litany of offers. These things take time to read and are rarely enjoyable. As marketers, oftentimes we are so eager to push messaging at our prospects that we fail to give them sufficient reason to engage with our brand. Transformative marketers create content as if they were presenting a gift to a friend – generously giving to the audience without necessarily asking for something in return.
DSC recognized that video is the perfect medium for delivering that kind of gift and answering the “so what” question. It enables you to tell your brand story quickly and help the audience to envision themselves as part of your story. The “what” part of the DSC story is also simple and compelling: “let us send ‘em right to you.”
How you describe the “what” with potential customers may depend on the segment or behavioral persona they represent. For example, different segments may have varying preferences on the channels where they want to communicate with you (e.g. website, email, social media, text messages, etc.). Successful engagement requires you to meet your customers on their terms – when and where they want to interact – with authenticity and relevancy.
A Reason to Buy (Convert)
The success and growth rate of any e-commerce business turns on conversion rates. The “how” part of your brand story informs the conversion process and activates customer purchase intent.
In the case of DSC, their “how” is incredibly simple and clear: “join the club, shave time, shave money.” Sure, DSC was able to garner over 25 million views of their explainer video. That’s nice, but the real measure of success is how much product you actually sell. DSC sales surpassed $150 million in 2015 and over $200 million in 2016. That’s a lot of razors! Unilever was willing to pay $1 billion in cash for DSC because of “how” the brand was able to sell a whole lot of razors and lock down recurring revenue from customers joining the club.
Transformative marketers understand the vital importance of the distinction between garnering attention and driving conversion. Conversion rates, however, don’t only apply to sales transactions. It’s also important to track leading indicators of sales conversion in the Customer BuyWay – things like newsletter subscriptions, social media likes and follows, and views of product videos. Measuring leading indicators of conversion can be tricky. A conversion optimization project generates actionable customer insights and focuses you on tactics to drive profitable growth. This type of project, often executed in collaboration with trained professionals, will help you to convert a higher percentage of your website visitors into paying customers.
For an e-commerce brand to drive hypergrowth, it turns out there are a few key conversion metrics that demand constant attention:
1. Traffic Sources:
Having a number of different traffic sources can increase the likelihood of conversion by showing where your traffic is primarily coming from – direct visitors (those who type your URL into the address bar), search visitors (those who visit from search queries) and referral visitors (those who visit based on referrals from another site).
2. New vs. Returning Visitors:
New visitors will interact with your website differently than returning customers. Returning customers will know where to go and what to do. By tracking how many new vs. returning visitors, you can then improve the experience each new user has when they first click on your site to improve conversion.
3. Bounce Rate:
It’s important to keep track of how many visitors leave your site quickly. Bounce rate is a great indicator for finding usability issues on your website that are hindering successful conversion.
Related Reading: Check out this article for more ideas on how to increase conversion rates and accelerate sales growth.
A Reason to Stay
As marketers and salespeople, we all love the moment when we close the deal. It’s exciting. It’s energizing. It marks a point of completion for what may have been a lengthy and difficult process. For a specific moment in time, the “why, what and how” of your brand story are fully aligned with the needs and wants of your customer.
However, the Customer BuyWay isn’t just about that magical moment in time when a customer decides to buy something, make payment, and complete the sale. The BuyWay also has a long post-purchase tail. This tail is comprised of experiences of actual consumption or usage, as well as important events that can trigger repeat purchases, reviews and referrals, sustained loyalty and even brand advocacy.
If Dollar Shave Club only sells you one razor, they are going to lose money – a lot of money. Their secret to success is in getting you to stay by joining their club and getting new razors every few weeks. And, they are actually selling much more than razors. They are selling a “personal hygiene experience” which includes accessories, shave butter, cleansers, moisturizers – skin care, hair care, oral care – you name it! You see, for the transformative marketers at DSC, conversion is just the first step in creating customers for life.
You can learn much more about building hypergrowth e-commerce businesses in my new book, Marketing, Interrupted. The book is written from the perspective of transformative marketers at brands like Netflix, Staples and Amazon. You will hear their stories and learn how they made the Customer BuyWay the cornerstone of their brand strategy and generated remarkable results.
Learn more from the experts on Transformational Marketing by ordering Marketing, Interrupted today!