How Dollar Shave Club used video to grow to a $1 billion exit

Seven years ago Dollar Shave Club was a startup trying to move 250,000 twin razors. It all began when the company’s founder, Michael Dubin, was at a party, and his friend’s dad asked for his help in selling a surplus supply of razors online. Dubin had a digital marketing background and was excited by the proposal. “At the time, I was helping companies make promotional online videos,” Dubin told the New York Times. “I knew immediately I didn’t want to sell them the traditional way.”

So Dubin decided try something novel: what if he could sell the razors using a subscription model? Everyone who shaves needs new razors on a fairly regular schedule, right? But his idea was also bordering on the delusional. As he set out to start Dollar Shave Club, Proctor & Gamble dominated the razor market with a hefty 71 percent share. The male grooming category was considered disruption-proof and competition-proof. Why? Because the relationship between man and blade begins as soon as puberty kicks off. From first shave onwards, billions of marketing dollars are spent to maintain the relationship.

Fast forward to 2016, less than half a decade after it was founded, Dollar Shave Club was acquired for $1 billion by that other consumer goods giant, Unilever.

Lots of factors propelled its journey from upstart to competitor to unicorn—hard work, a gap in the market, and a solid product to name just a few. But one thing is perhaps most responsible for propelling it so far, so fast: video.

When Dollar Shave Club released its first video in March 2012, it was a fledgling eCommerce startup. But that video paved the way for its quick success—racking up 4.75 million views in three months and generating 12,000 orders within 48 hours—a volume that shut down Dubin’s servers. Follow up videos, and subsequently the company’s products, developed a cult following.

Few other mediums have the power to reach so many people, so fast, and with such impact while generating such emotion. As the case of Dollar Shave Club shows, video can generate brand loyalty, attention, and customers for even the youngest eCommerce startups.

To the point where former Dollar Shave Club CMO Adam Weber told “It all started with video. That’s what really birthed our brand.”

Why videos work

The case for using video in a company’s marketing mix has been clear for a long time.

According to a report (PDF) by The Aberdeen Group, companies that use video grow their revenue 49 percent faster year-over-year than those that don’t, they also get 27 percent higher click-through rates, 34 percent higher web conversion rates, and 41 percent more web traffic.

Companies that use video grow their revenue 49 percent faster year-over-year than those that don’t.

Video also gives a company’s audience the most visceral way of experiencing a product. If a customer has to see something to believe it, then video is the best way of transporting them to your showroom. Newer virtual reality and augmented reality tools, which are an evolution of traditional video, bring clients even closer to the products, effectively help eCommerce companies to overcome the touch and feel barrier by creating a bond between company and client that can usually only be forged by an in-person experience.

And from a sales perspective, a video can make a pitch for your product an infinite number of times, anywhere around the world, at any time of day, without you or your sales team having to be there. In other words, video will be an investment with a long return—as long as people click on it.

Trust before sales

So what makes people want to click on, watch, share, discuss, and rewatch a brand video? Let’s break down the Dollar Shave Club approach.

The video begins with founder Michael Dubin sitting at a desk. In under ten seconds he’s made a clear sales pitch: for $1 a month, Dollar Shave Club will send a fresh razor to your home. Then he gets up, walks to the door, and confidently delivers the defining line of the piece: “Our blades are f**king great.” It sets the tone for the rest of the segment and for the next minute, viewers follow Dubin around a warehouse as he drops one-liners—“do you think your razor needs a vibrating handle, a flashlight, a back-scratcher, and ten blades? Your handsome-ass grandfather had one blade… and polio”—passes a toddler shaving a man’s head, dances with a bear, and weaves in the features that makes his razors stand out.

Successful eCommerce marketing videos alway do one thing: they sell products. Dollar Shave Club content might be wrapped up in humor, but its goal is always to sell.

It’s a funny piece. Dubin’s straight-man, tongue-in-cheek delivery comes naturally and the humour is what buys the trust and attention of the audience. The friendly, down-to-earth tone clearly struck a chord with men who weren’t used to being addressed this way by a brand. “You were either going to be very highbrow, slightly unapproachable, extremely aspirational, but really, largely unattainable as a brand—or you were going to approach men as Neanderthals,” Weber told Marketing Land. Dollar Shave Club’s first video was surprising since it broke that mold, speaking to consumers authentically and relatably.

Once Dubin had built a relationship with his audience through humor, he had earned the right to slip in information about the razor’s features. He’d made his audience laugh and in return, he could take a few seconds of their time to talk about what he found important—his product—thus turning them from appreciative audience members to customers.

And here’s the key to the clips’s success: it isn’t just funny, it doesn’t just have a great concept, it sells. In this video and all following videos from Dollar Shave Club, the central theme is always one of the company’s products and its value proposition. Dollar Shave Club content might be wrapped up in humor, but its goal is always to sell.

Dealing with the influx

If a video does its job, you should see a spike in sales. To fulfill the 12,000 orders that the video generated in 48 hours, Dubin worked frantically with a group of friends and contractors to pack boxes.

Companies should prepare for a spike in sales by having a team on standby who can step in and help with packing and shipping when orders ramp up. There should also be an IT plan in place, in case an increase in traffic leads to too much pressure on your servers and slows down your site. Lastly, if a sales spike does overwhelm your packing and shipping process, be ready to explain to customers what the cause of the delay is, acknowledge that this isn’t what they signed up for, and remind them how much you value their business. A sincere and open apology, that addresses the issues rather than sweeping them under the carpet, could turn a potentially disgruntled customer into an even stronger advocate.

Dollar Shave Club’s follow up videos have increased production values, but retain the same sense of humor and focus on the product.

Warby Parker, another eCommerce darling, also had to cope with an enormous spike in sales upon launching. After GQ referred to the company that sells $95 glasses as the “Netflix of eyewear” it met its first year’s sales target in three weeks and ended up with a 20,000 order waitlist.

As co-CEO and cofounder Neil Blumenthal told Inc, “It was this moment of panic, but also a great opportunity for us to provide awesome customer service and write personalized emails to apologize and explain. That really set the tone for how we would run customer service.”

Of course, not all videos are winners right out of the gate. Rarely is video an “if you build it, they will come” proposition on its own. Lots of factors go into success with video. The content itself is key—it needs to resonate—but a solid distribution strategy also has to follow. In other words, a video needs to get in front of the right people, for it to take off, which gives companies with large social media followings a head start. Videos that are shared by “influencers” or the news media get an even bigger push. And even then, the rest of a company’s communication strategy is critical. A company needs to give careful consideration to where a customer will be directed to after viewing a video; ideally, viewers will be funneled into a sales pipeline in a seamless and natural way. And while video has enormous potential and is among the most effective mediums for conveying a company’s message, it’s not a silver bullet. Rather, it’s a key piece in a marketing strategy—one that has to be backed up by all the other components that make a business.

Personality trumps production values

It’s not surprising that Dubin took a comedic approach to his first video. He’d spent eight years studying improvisational comedy at the school cofounded by Amy Poehler, the Upright Citizens Brigade, whose alumni include comedy luminaries like Aubrey Plaza, of the sitcom Parks and Recreation, and Ilana Glazer and Abby Jacobson, who wrote and starred in the breakout comedy hit Broad City.

Dubin’s comedy training combined with his career in digital media and marketing meant he understood the power you have over an audience when you elicit an emotional response to your content. In other words, if you can make someone laugh or smile, or on the opposite end of the spectrum, cry or shed a tear, you’ve pierced their defenses and they’ll remember your content, love it, share it, and want to hear from you again. It also gives you leeway to do as Dubin did so effectively, and sell a product. (If you slip in your sales pitch without first winning the audience’s trust, good luck—you’ll need it.)

In his pioneering work, Descartes’ Error: Emotion, Reason, and the Human Brain, neuroscientist António Damásio explains that emotions are central to our rational thinking and drive our decisions at key stages of the decision-making process. Dollar Shave Club CMO Adam Weber concurs, telling Marketing Land, “More than any other channel, you can really reach a guy, or really, a consumer in general, and establish a much deeper emotional connection with video than you can in other creative venues. That’s because we can tell stories well. We can find a resonant idea, we can deliver it in a relatable voice and connect one-to-one.”

To talk about your product in a marketing video, you have to first earn the right by forging a relationship with the viewer. Dollar Shave Club used humor, but other emotions work equally well.

A video might be an intimidating investment for a young company to make, but perfect should not be the enemy of the good. In fact, imperfections are exactly what appeal to people. Viewers want content that feels homemade, improvisational, and therefore, “real.” On the internet, there are lower expectations when it comes to production values (versus traditional, made-for-television video), but higher expectations when it comes to authenticity.

The first Dollar Shave Club video itself was shot for $4,500, which shows that if you get the personality part right, you can be scrappy about how you make your video. “I think that’s where things are heading,” Weber told Marketing Land, “lower expectations on video, whatever we use to define as an industry as quality, which I find false in the first place.” And in the social media age, scrappy, shaky camera angles and videos shot on a phone, can all work if the wit, tone, personality, and concept are there.

And it isn’t just humor that wins people’s heart. If you can inspire them or teach them something through a video, you will develop a loyal audience and customer base.

So start off by thinking about what makes you distinct, what makes you stand out. As a CEO are you witty or funny? If so, show that. Do you have a cause you particularly care about? Show that too. Is your brand charming or endearing? Daring and adventurous? Video is perhaps the best way for you to communicate those qualities in an authentic manner that allows you to forge meaningful connections with potential customers. Once you make those connections, you’ll have implicit permission to drop in a sales message.

Video might seem like a significant expense, but with effective execution and a solid strategy, it becomes the investment that keeps on giving and it could launch you in the direction of a $1 billion acquisition.

1 Comment

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