The cheap, monthly subscription service sold for a billion dollars — five times more than its expected to earn in revenues this year.
Last month Unilever made headlines for buying Dollar Shave Club — a company that has yet to be profitable — for a whopping $1 billion.
And although the startup’s CEO, Mike Dubin has assured buyers that “our blades are “f*cking great,” the sale has to do with a lot more than just razors. It has to do with content marketing.
Dubin’s expletive-filled, 90 second introductory video is a perfect example of the cheap shaving monthly subscription service’s marketing prowess. Dollar Shave Club was completely unheard of, but according to Entreprenuer, within 48 hours of the comedic YouTube’s 2012 release some 12,000 people had signed up for the service. And apart from some Google ads, those subscriptions came from ZERO other marketing. The power of the video was obvious — 4.2 million people watched it in the first three days, and four years later it has been viewed more than 23 million times.
But the stellar content marketing didn’t end with just funny viral video.
Dollar Shave Club has learned about its consumer base and curates its content to appeal to their irreverent sense of humor. It sends a hilarious faux newspaper called the “Bathroom Minutes” with every delivery, and it comes complete with life tips and random factoids. It also focuses on communicating with customers on Twitter and Facebook, and they are quick to respond to complaints.
Dollar Shave Club’s focus is on internet sales — and although P&G’s Gilette is certainly a bigger company, it doesn’t have the same appeal in the online market. According to MarketingWeek, “Dollar Shave Club holds 54% of the online shaving marketing in the US, according to Euromonitor, and 5% of the total shaving market. By comparison Gillette’s share of the online market is 21% while its overall share has dropped from 71% in 2010 to 59% last year.”
Unilever wants to get a handle on that social media dexterity. As Bloomberg BusinessWeek put it, “Unilever and P&G are masters at traditional marketing, mostly offline, but they struggle with the direct-to-consumer brand-building at which upstarts like Dollar Shave Club excel.”
This isn’t a blind guess. Unilever has admitted as much. Jeremy Bassett, the head of the company’s startup platform Unilever Foundry, tweeted that the purchase was a decision to “embrace disruption.”
— Jeremy Basset (@jeremybasset) July 20, 2016
And also… the blades really are f*cking great.