GE 95: How Wet Shave Club Leveraged Instagram to Get To $350K In Revenues

rohan gilkesHi everyone, today we’re talking to Rohan Gilkes, co-founder of the Wet Shave Club, a company purchased after a conversation on Reddit and that went from doing $400 in revenue per month to doing $350,000 in the first year.

Rohan’s got some great insight on using social media to drive traffic back to your site (particularly if you’ve got a consumer product) and how subscription box companies are (for him) some of the best e-commerce businesses out there.

An Accountant Gets Curious About Internet Marketing

Though he’s got a professional background in accounting, Rohan got interested in internet marketing five years ago, and started teaching himself different things while trying out various online business models.

He’s had a handful of successes and failures along the way, but Wet Shave Club is his latest project, and he’s ending his first year of business with around 1,500 subscribers and $350,000 in revenue, which is really something, considering when he bought it out it was only doing $400 per month.

Cutting Through the Noise on Reddit

Rohan says he hangs out in the Entrepreneur Subreddit almost every day, and he cuts through the noise to avoid wasting his time there by primarily reading posts that involve specific metrics, rather than reading about another guy’s ‘wonderful’ business idea.

A little over a year ago, his time spent on Reddit paid off because he came across a guy trying to sell his business (Wet Shave Club), and Rohan felt it was something he could try and have success with. So, he bought the guy out, did some re-branding, and re-launched one month later.

Getting Off the Ground with Customer Acquisition

After the re-launch, Rohan knew that they needed to get to work on customer acquisition so they could make the company profitable.

To do that, he reached out to two groups of influencers and asked them if he could send them a free wet shave box:

  1. Tribe leaders deep in the wet shaving community with an established fan base
  2. Subscription box reviewers

By spending $10 to $12per box, they were able to get about a 25% response rate of the bloggers they contacted in getting reviews posted online to people who were either already fans of wet shaving or interested in subscription box services.

But there wasn’t any special trick to finding influencers to reach out to or a magic bullet of an outreach email.

“This part is pretty boring because all we did was Google,” said Rohan about finding bloggers and reviewers to get in touch with.

Their emails weren’t very aggressive, and read something like this:

Hi, 

I’m Rohan from Wet Shave Club.

We’re launching our men’s shaving box in a few weeks and would love you to take a look.

If you’re interested, send us your address and we’ll get a box in the mail for you tomorrow.

It was short, straight to the point, included a link to their website, and that was it.

Customer Acquisition Now That They’ve Grown

Even though they’ve grown to doing multiple six figures per year, they still do outreach to influencers for reviews. Rohan says it’s probably the one thing that gives them the most predictable subscribers to their service.

They also do traditional internet marketing things like Facebook ads, retargeting, and so on, but influencer outreach is the thing that lets them reach out to a very large customer base at a very low cost.

To take care of the outreach, they have a full-time staff member work on it along with other duties like getting press coverage and creating cross-promotional partnerships with other subscription box companies.

Are Subscription Box Services Dying?

Rohan says that while people like to grumble about the status of subscription box services, he says at their core, they’re e-commerce stores that have customers who’ve agreed to purchase from you every single month.

“If you have a company that allows you to have recurring revenue,” says Rohan, “you can do a lot with your customer acquisition. You acquisition costs can be a lot higher because the lifetime value of that customer is going to be higher.”

“It is the best situation you can be in as far as online e-commerce goes,” he says.

Customer Acquisition Beyond Influencer Reviews: Social Media Contests

Rohan says Wet Shave Club is doing really well on social media, though they started to notice after a while that their customer acquisition costs on Facebook were trending upwards.

They started running contests with Gleam.io, which lets people enter a contest by following you on Facebook, retweeting your stuff on Twitter, following you on Instagram, and so on. It helps them leverage their social media and get a lot of people looking at their product.

“Social media for us is probably the number two thing,” says Rohan. “And number three for us is probably emails.”

Instagram, For Example

Wet Shave Club’s Instagram account is full of high quality pictures, which they take using a product photo booth they bought on Amazon.

They also have an employee who’s really good at graphic design and uses photoshop to help create contest images to get attention and Instagram quotes that work really well with their audience.

Rohan says that if you have a product that connects to people visually and appeals to them on some sort of emotional level, you can do really well on Instagram.

But to boost their Instagram followers, they use a product called Instagress, which shows them people who use keywords that relate to their product, so they can follow and engage with those people in order to get a follow back.

The problem with these social media automation tools, says Rohan, is that the social media companies themselves could decide to suspend you for using them at any time. So use them at your own risk.

He advises to spend some time in the trenches building your following from scratch (2,000 followers worked for them) before you start automating.

Reaching the $350K Mark

Rohan says it took them six months to reach their first $100K in revenue – by September of 2014.

As their influencer outreach compounded and their service spread by reviews and word of mouth (and by fans sharing their own photos on social media), all the activity grew upon itself.

The more the word got out, the more returns they got, and they kept growing. Between September 2014 and April 2015, they did another $200K in revenue to reach that mark.

Rohan says the main drivers behind increasing their revenues was getting really good at social media and churning out contest after contest with Gleam.io.

‘By-Passing’ Reddit’s Self-Promotion Rules

Beyond advertising their contests on Facebook, Twitter and Instagram, Rohan says the put it up on Reddit too.

But since Reddit is notorious for its strict rules, they start out by asking people interested in wet shaving what kind of products they’d like to see in a related subscription service box.

They build the relationship and engage with people who are genuinely interested, then they can tell them about their contest with no problem.

Biggest Struggle: Product Sourcing

Rohan says that when they were starting out as a small company, it was better for them to find products on Etsy, because they wouldn’t have been able to get large companies to work with them.

It worked well for a while, but the problem became figuring out what to do when they went from only needing 50 aftershaves to needing 200. Or going from 500 to 1,500.

With Etsy providers, it becomes a problem because a lot of people are making the product in their homes or small product facilities and aren’t accustomed to producing thousands of pieces every month.

To solve it, they started needing very long lead times, which hurt their cash flow.

Reaching the Brink of Failure

Luckily, Rohan says they haven’t reached the brink of failure yet… but there’s definitely been instances where it looked like their company would be cut in half overnight.

For example, while they were waiting for a shipment of razors, the train the razors was on derailed so they had to push back their delivery by a few days. It pissed of some of their customers, and people threatened to cancel.

Luckily, he says, if you’re proactive and communicate well, you can bounce back from a lot of things.

Advice to His 25-Year-Old Self

“You just need to solve one thing at a time… Step by step, day by day, solve one problem and it all works out. But if you try to solve the whole thing before you even get started, you’re never going to get started.”

One Productivity Hack

If you feel stuck, or like you’re in a procrastination mode, set yourself a timer for 15 minutes.

If you stop after 15 minutes of working, that’s fine, but very often, within that 15 minutes, whatever feelings of procrastination or laziness you had are gone and you can push through and get quite a bit done.

One Must-Read Book

Rohan recommends Made to Stick: Why Some Ideas Survive & Others Die.

It’s a book about communication and selling feelings rather than products. He says he goes back to it over and over again about how to communicate online for branding, selling, and making things as simple as possible.

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Disclaimer: As with any digital marketing campaign, your individual results may vary.