The Dollar Shave Club is counted as one of the most intriguing start-ups in the United States, particularly for its record-breaking marketing strategy that shook the grooming industry. The company went viral within the first 48 hours of releasing its marketing launch video ad, gaining at least 12,000 subscribers in those hours. Though many lessons have been drawn from DSC’s killer marketing strategy, there’s much to be learned from its referral program, which accounts for the brand’s exponential growth over the years.
This post delves into how the Dollar Shave Club referral program works, some of the features that have made it successful, and improvements that could make the program more attractive to its new and existing customers.
How does the program work?
The Dollar Shave Club, a monthly shaving subscription service, offers members a $5 bonus credit for each friend they refer successfully. The program is free to join and is open to any United States or Canada-based customer who has a Dollar Shave Club account in good standing. On creating an account, one is given a unique referral link.
When referring other people to the brand, customers need to copy that unique referral link and share it with their friends via any social media platform. Once the person clicks that link and signs up with the company, they are considered a successful referral. $5 worth of referral credits is ascribed to the referring customer’s account. The referral credits are applied to monthly subscription charges, and you can redeem them to purchase extra Dollar Shave Club products each month.
The referral program is one-sided, so new members do not receive any special rewards upon signing up. Rather only existing members who have referred their friends get to enjoy a $5 credit for every person that signs up through their link. However, in terms of participation, the program is limited to legal residents of the United States and Canada, who are at least 18 years of age.
When an existing member shares their unique referral link with their friend or family who is a prospective member, that person must sign up to the Dollar Shave Club within that same session. In other words, if the prospective member clicks on the link yet does not sign up within the same session, the referring member will not be eligible for the $5 credits. “Same Session” as defined by the company means clicking a member’s unique referral link and completing the sign-up with a reasonable amount of time without pressing the back button or closing the browser.
What are the good things about the program?
Fascinating Easy-to-share Messages
DSC makes the entire referral process simple for its existing customers by providing automated messages for each platform once you decide to share. Referring customers do not have to worry about adding “convincing” messages to their unique referral links, as the brand has already done it for them. The brand gives its customers the option of either sharing their viral Video ad on any social media platform or sharing short messages via email, Facebook, or Twitter with friends and family. The messages are well-crafted, humorous, and have a high potential of getting new members to click; thus, members have no problem clicking the share buttons at their convenience. With an estimate of about 50,000 customers referring others monthly to Dollar Shave Club, this strategy has proved quite successful.
With the Dollar Shave Club positioning its brand as a grooming club, it mimics the recruitment style of many real-life clubs. The company’s main message is to get people to join a ‘club’ of groomers who are excited to receive grooming products at their doorstep every month. The brand uses this principle in building a stronger community by asking new customers to invite a friend or family to the club after their first purchase. Generally, people are more likely to interact with a brand that identifies with building a community and, as such, would freely share their links with their friends.
DSC nails its referral strategy by asking customers to join their program right after completing their first purchase. The timing is perfect because most customers are highly engaged on your platform after making their first purchase and are searching for the next thing to do with your brand. Sending a prompt to join your referral program too early will likely distract customers. In the same vein, waiting too long means the customer would have lost their initial zeal to engage with your brand fully. DSC sets an example here by encouraging its members to invite other friends right after they have ordered their first product and are enjoying a great user experience on their site.
How could they make the program more attractive?
As described earlier, the Dollar Shave Club Referral program is one-sided, meaning only existing members benefit from a referral. Although the value is clear, joining the entire Dollar Shave Club subscription program would be much more attractive if there was some form of incentive for signing up. The presence of double-sided incentives encourages existing members to share their links more as they attempt to share the benefits with their loved ones. The brand could split the incentives between both parties or a different incentive offered to new members. Either way, new members are more likely to sign up faster if they know they can gain some form of reward for taking action.
One of the ways the Dollar Shave Club can improve its referral program strategy is by incorporating more personal data such as the customer’s name. When a new customer sees a notice from a person they know recommending a product to them, they are more likely to click and purchase that product. In addition, the brand can make the program even more attractive by using a customized referral landing page with the name of the referrer on it. This personalization effect establishes more trust and familiarity and could increase the chances of new referrals signing up to join the club quicker.