The secret to Dollar Shave Club's success in a crowded market

At the beginning of the 20th century Gillette owned the razor market.

At the beginning of the next century they were still at the top.

Then in 2012 a new startup entered the market - Dollar Shave Club.

Over the next four years, Dollar Shave Club’s growth exploded and eroded 16% of Gillette’s market share.

That’s 16% more than Gillette had lost in the previous 100+ years.

What did Dollar Shave Club know that allowed them to unseat a gorilla in a category that hadn’t seen any real competition in 100 years?

Dollar Shave Club understood the complete value equation.

Gillette, on the other hand, only looked at one variable in the value equation.

Let me explain…

The executives at Gillette were well aware of Dollar Shave Club from the first day they launched (you know the video). They even ordered the products to try it themselves.

The team at Gillette had a team of hundreds of scientists and innovators working in their labs to create their razors. So they had them analyze the Dollar Shave Club razors too.

In short, they weren’t impressed. Or worried.

But even so, they ordered focus groups and consumer testing groups to have a go.

Again, the clear winner was Gillette.

Over and over in study after study the Gillette blades proved superior.

The Gillette brass knew that when it came to shaving they provide the best experience hands down.

And while an excellent shave is obviously an important variable in the value equation…

It’s not the only variable (although Gillette thought it was).

The team at Dollar Shave Club found the neglected variables in the value equation.

Buying Experience: Buying blades in a locked case felt like asking your mom for permission. What a PITA!

Pricing Pain: Blades were continually getting more expensive and more advanced. Do we really need to pay for all this tech?

Convenience Bonus: When razor blades show up each month it goes from a painful buying experience to a delightful dopamine hit each month.

How did DSC figure this out?

Simple: they understood their customer. Deeply.

They knew that men hated the experience of buying blades. They understood that men thought blades were needless expensive. And they found a way to connect with young men by being anti-corporate and irreverent.

All of these things added up to tremendous value, and men young and old wanted to be associated with the brand.

Let’s step back for a minute because this is the part many brands miss…

The key to DSC exploding onto the scene and taking on an industry giant was understanding their customers.

Historically, retail brands are focused on products.

And that’s where DTC brands have a huge advantage: they’re focused on customers.

But there’s still too many brands selling direct to consumer that miss this point and focus more on their product than their customer.

If you want to win the hearts and minds of your customers (which leads to making money), then get to know them and create a brand they want to be associated with.

Solve their pain.