January 25, 2015
Dollar Shave Club is a subscription based razor company, founded in 2011 by Mark Levine and Michael Dubin based on the idea that consumers are highly frustrated with the growing cost of razor blades. This is a classic case of finding a major un-addressed problem that consumers are facing in the market, and use a creative brand solution that helps to turn that problem into a consumer enemy that upsets them emotionally. We are seeing many brands use new technology options to set up the old guard as the enemy ready for attack. This has been the strategy for Netflix on movie rentals, Beats by Dre on the headphone business and the Uber brand on the entire taxi industry. And this is the strategy for Dollar Shave on Gillette. With the cost of a pack of razors going for $20 at your average drug store or even $40 at Costco, there was a huge opportunity in the marketplace. Yes, we’ve seen huge technology gains in the last 20 years with way more blades than we ever though possible, flex balls and blue lines telling us when to throw it out. But for a great many of us, price still matters.
We’ve always said that brands really have 4 options: better, different, cheaper or else not around for very long. The key is to find a unique selling proposition for your brand. You don’t always need to find a rational point of difference as long as there is room to be emotionally unique.
Here’s how this competitive positioning process works: Map out everything your consumer wants–all the possible need states. Then map out all the benefits that you and your competitors can do better than anyone else–both functional and emotional zones. You want to find that intersecting zone where what you can do best matches up to a need state of the consumer. Then find a way to serve that need state to the best of your ability and transform it into an even bigger deal than first meets the eye. Avoid the intersecting zone where your competitor is better than you and please avoid that zone where you and your competition foolishly battle in an area that “no one cares” about. The battle ground (?) zone is where both you and your competition can satisfy the consumer need at an equal rate. To win in this situation, you need to get creative and find ways to out-execute or find some emotional connection that changes the game and makes you the clear winner.
For Dollar Shave, they have found the model that makes them definitely cheaper. I really love the Dollar Shave Club concept — you sign up for a monthly fee depending on the quality of blades (the humble twin, the 4x and the Executive) you order and they automatically send you a free handle and a monthly shipment of blades–in Canada, that cost ranges from $3.59/month up to $9.59/month. In case you want to give it a shot and become a member click on this hyperlink: Dollar Shave Website
Amazing Launch Advertising
Dollar Shave took advantage of viral advertising, making such an innovative ad that it was shared and viewed by up to 18 million people. The ad starring the CEO, who is also a burned out Hollywood actor, was made with such an anti-corporation feel/tone that it jumps off the computer screen. Here is the ad which is appropriately titled: “Our blades are F***ing Great”
Classic Case of Guerrilla Warfare
From the marketing strategy workshop we run at Beloved Brands, we explain how that Guerrilla Warfare works best when no one even notices or can do anything about it. Here are the four key principles brands need to establish a successful Guerrilla niche brand.
- Pick a segment small enough that it won’t be noticed and you’ll be able to defend it. Be aggressive. Put all your resources against this small area, so that you’ll have the relative force of a major player.
- Be flexible and nimble. You’ll need to enter quickly to seize an opportunity that others aren’t noticing, but also be ready to exit if need be—whether the consumers change their minds or competitors see an opportunity to enter.
- Explore non-traditional marketing techniques to get your brand message out and your brand into the market quickly. Because you’re playing in a non-traditional market, you’ll be given leeway on the tools you use.
- For Guerilla brands, it is better to be loved by the few, than liked or tolerated by the many. Leave the masses for the mass brands.
You can imagine that as Dollar Shave started out, they were up going against one of the biggest consumer goliath brands in the world. Gillette’s global sales are in the billions. For Dollar Shave, first year sales were about $30-50 million, while they likely generated a lot of noise at P&G, that sales level should not even be enough to make Gillette lose an ounce of sleep.
But that’s a ton of money for an entrepreneur.
In fact, Dollar Shave did a great job in backing Gillette into a corner where they would have a hard time changing their entire business model to counter Dollar Shave. Are they going to upset major retailers by offering their own subscription model version? They can’t. Are they going to dramatically lower their price from $27.99 for 10 razors down to $9.99 and give up all the profit they are already generating? They can’t. The best move would be to control Dollar Shave and allow them to stay at the $50 million level. However, Dollar Shave has continued to expand on their niche and got big enough to prompt action from Gillette. But let’s be honest, this is a very lame reaction below:
I’m not sure that ad will get many to sign up for the Gillette subscription model, as it’s not exactly the full on attack that a Leader normally uses to squash the naughty little niche player that’s bugging them. The good news for Gillette is only 199,000 people have seen this on-line, compared to 18 million views for Dollar Shave.
Let’s use a little Napoleonic military theory for a minute to analyze what’s happening here. Napoleon had two main strategies: The first strategy Napoleon: Where there is opportunity to win against their strength, ATTACK THEIR STRENGTH, then the weak area will be that much easier. This type of Strategy would be better for Schick as the challenger brand to use. If a Niche brand goes against the leader’s strength right away, they will be clobbered. The Dollar Shave brand used Napoleon’s second strategy: Where there is a limited opportunity to win against their strength, then ATTACK THEIR WEAKNESS, and once they mobilize their strength to attack back, you can then attack their strength. This is where Dollar Shave attacked Gillette on price. I’m not sure if Dollar Shave expected a reaction, but eventually got so big after 2 years, that it became warranted. The good news for Dollar Shave is that their attack has brought Gillette to fight back on Dollar Shave’s terms–on the subscription battle field. But while Gillette is mobilizing, Dollar Shave is now able to attack back at Gillette’s point of strength: the drug store. Here’s how that Napoleonic Strategy #2 maps out.
Dollar Shave’s round two of advertising in 2015 is making a mockery of how Gillette does business: launching 4 ads that poke fun at the security around buying razor blades and the special promotional gift you get. Here’s two very funny ads, in their latest series of four TV Ads they are currently running, generating a lot of talk value among the core 18-24 year old target market:
Dollar Shave “Security”
Dollar Shave “Free Gift”
These are fantastic Dollar Shave ads. They generate a lot of attention, the branding irreverent tone fits with the Dollar Shave launch, these ads communicate the main benefit that Dollar Shave is a simple model that will save you money and has that memorability factor that will stick with consumers. Not only is Dollar Shave using more traditional TV media to push for a higher reach, these ads have been seen by a combined 3 million people on line.
Well played Dollar Shave: your move next Gillette
At Beloved Brands, we run a Brand Leadership Center to train marketers in all aspects of marketing from strategic thinking, analysis, writing brand plans, creative briefs and reports, judging advertising and media. To see a workshop on BRAND STRATEGY, click on the Powerpoint presentation below:
We make Brands better.
We make Brand Leaders better.™
We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at firstname.lastname@example.org or phone me at 416 885 3911