A $615 Million Lesson in Marketing from a $1 Blade

by on Feb 26, 2016

Not sure whether it’s God or somebody else who made man, but a razor sure makes a gentleman.  The gentleman who gets the job and gets the girl.  However, to transform from a man to a gentleman, the man has to take the pain to travel to the store and navigate to the razor section to pick up blades that keep getting expensive.

To address these pain points, Michael Dubin started the Dollar Shave Club in June 2011 from his apartment, that delivers high quality razors and grooming products every month at the subscriber’s doorstep for $1 a month. With no fees or shipping charges.

The response wasn’t great the first 8 months. And then a video that unexpectedly went viral ended up skyrocketing the business throughout the United States and eventually into other countries.

To talk about numbers, Dollar Shave Club had a turnover of

-$4 million in 2012
-$19 million in 2013
-$65 million in 2014

It’s valued at $615 million as of June 2015.

Market share and competition

The newcomer is now competing with companies like the 120-year-old Gillette and the 90-year-old Schick who are the leaders of the shaving industry. Dollar Shave Club has reportedly emerged as the No. 2 razor cartridge brand by volume in just a little more than three years since its launch.

Slice Intelligence pegs  the online shaving market  at $271 million for the 12 month period ending in July 2015, for all brands put together.  $132 million of that belonged to Dollar Shave Club. During the period, overall online shaving sales grew 70% over the previous year, but Dollar Shave Club grew 192%.

The game-changing viral video

Here’s the transcript

Hi, I’m Mike, founder of DollarShaveClub.com. What is DollarShaveClub.com? Well, for $1 a month, we send high-quality razors right to your door. Yeah, $1. Are the blades any good? No. Our blades are f*****g great. Each razor has stainless steel blades, an aloe vera lubricating strip, and a pivot head. It’s so gentle, a toddler could use it.

And do you like spending $20 a month on brand name razors? Nineteen go to Roger Federer. I’m good at tennis. And do you think your razor needs a vibrating handle, a flashlight, a backscratcher, and 10 blades? Your handsome ass grandfather had one blade and polio. Looking good, Papa! Stop paying for shave tech you don’t need, and stop forgetting to buy your blades every month. Alejandra and I are gonna ship them right to you.

We’re not just selling razors. We’re also making new jobs. Alejandra, what were you doing last month?

Alejandra: Not working.

Michael: What are you doing now?

Alejandra: Working.

Michael: I’m no Vanderbilt, but this train may say, “[train whistle].” So stop forgetting to buy your blades every month and start deciding where you’re gonna stack all those dollar bills I’m saving you. We are DollarShaveClub.com, and the party is on.

The takeaways

  • Create a product that addresses real pain points.
  • Create a video to tell the story.
  • Keep the video short and focused.
  • Communicate the value and benefits in clear terms.
  • Keep the content simple, fun and relatable.

With the power of social media and some classic slapstick comedy like a little girl shaving her dad’s head in the background, this $4,500 simple video acted like NOS on a street racing car. The idea of the commercial was that men could watch it, connect with it, and finally wait for their own brown Dollar Shave Club cardboard box at their doorstep. And looks like the result was exactly that. The video also proves that comedy helps connect with audiences.

The single video that launched the company from Dubin’s apartment to a large-scale warehouse in Venice, California, has 22 million views.  The Dollar Shave Club has 2 million subscribers.