Do you remember seeing a Dollar Shave Club Youtube clip and feeling amused? Well that company is doing great and has great word of mouth working for it. When I first saw the video, I was pretty impressed as well. You can watch it here for yourself-
But the video it not the major reason his company is now valued over half a billions dollars.
Here are some of the points in my opinion which make Dollar Shave Club so valuable as a company-
- Open Market Opportunity- Gillette has been the market leader for many years and has drove the prices of the blades up for many years. This has created an opportunity for someone to come in, underprice them and take a share of market away from them. Dollar shave club has positioned themselves nicely for this opportunity.
- Immediate benefit to end user- Who would not like to save a few bucks a month? The user understands the value proposition of DSC immediately.
- Alternate and better channelling to users- Do you want to buy razors every month by your own self or do you want to get cheaper blades delivered to your home? Dollar Shave Club is not only cheaper, it is easier and habit forming for the end user.
- Great customer satisfaction- You can only grow a company if you keep your end users happy. Dollar Shave Club has very high levels of satisfaction from the existing users and commands loyalty. Even though Gillette has launched its own shave club, existing users of Dollar Shave Club seem to very loyal to it everywhere because of the great customer experience it has provided. Great companies are not built on gimmicky videos, even though they can start from there.
- Competing on something that market leader can not- Gillette can not really compete on price in this market. If it does, it would have to forego all the revenue that it could otherwise have generated. If it doesn’t, it would lose market share and that again puts it in a very tough spot. Dollar Shave Club is competing on its strength and is harnessing the weakness of the market leader. Ideal way to combat.
- Recurring revenue- What’s really good for business? Revenue. What is even more good if it can come with less marketing. DSC with its subscription model can be an opportunity for great business built for long term with low costs and great branding and connect with end users.
What are some of your views on why DSC has been able to succeed so fast and so well?
neeraj's 