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How Dollar Shave Club Could Shave Costs & Grow Its Business With Kissmetrics

Dollar Shave Club is one of the frontrunners in the new subscription economy that seems to be getting more traction by the month. These businesses offer consumable products delivered to customers’ doors on a recurring subscription.

Dollar Shave Club hit it big with their viral video that’s been viewed over 18 million times.

After it went live on YouTube, the referral traffic from video crashed the company’s servers. Within 48 hours of the video launch, Dollar Shave Club had 12,000 orders to fill.

Talk about an overnight success.

At this point, the company has moved beyond razors. Michael Dubin, co-founder, CEO, and star of their online videos says that Dollar Shave Club aims to be more than a razor company, stating: “We are building the next great men’s grooming and lifestyle brand, that started out with the core razor business and over the last three years, our members have come to rely on us for great products and on-time deliveries.”

How would a subscription business like Dollar Shave Club use Kissmetrics? Well, they’re not a customer of ours, but we have some recommendations for companies like them. If we were handling their analytics, this is what we would suggest:

  • Funnel report, to identify major roadblocks to conversion
  • Cohort report, to view retention metrics and identify which razors lead to upsells
  • Revenue report, to see which razors contribute the most to revenue

Before we dig in, we need to be clear that none of what you’ll see here is actual data from Dollar Shave Club. The purpose of this post is to show Dollar Shave Club and our readers how Kissmetrics works with subscription companies. All the data you’ll see in this post is fabricated data for example purposes – it doesn’t belong to any business.

Kissmetrics works great with any subscription company. Read this as an overview to see how.

Track Signups with a Funnel Report

The Kissmetrics funnel report allows marketers to identify roadblocks to conversion. It’s ridiculously easy to create a funnel report, and you can create a funnel for anything. The most common use is the signup funnel, which we’ll be using for the Dollar Shave Club. Specifically, we’ll focus on how well their viral video converts. If you watch the video on YouTube, you’ll see a clickable ad in the bottom left:

dollar shave club video ad link utm

Here’s the link in the ad:

https://www.dollarshaveclub.com/?cvosrc=video.youtube.trueview-cta&utm_campaign=trueview-cta&utm_content=&utm_medium=video&utm_source=youtube

It’s a link back to the homepage, and it contains the following UTM variables:

utm_campaign: trueview-cta (TrueView is part of YouTube’s ad platform)
utm_medium: video
utm_source: youtube

We’ll keep that “video” medium in mind when we segment our funnel. But before that, we’ll create the funnel.

Setting Up the Funnel

We’ll be tracking the entire purchase funnel. We start with their clean and simple homepage that has a giant CTA:

dollar shave club homepage

We click the big “DO IT” button to select our razors. We’ll buy the 4X.

razor selection dollar shave club

We’ll buy Dr. Carver’s Shave Butter and move to the next step:

suggested selling products dollar shave club

Next, we enter our shipping information:

dollar shave club step three address

Then we’ll enter our payment information and complete our order:

dollar shave club purchase funnel one

There are five steps in this funnel:

  1. Homepage
  2. Razor selection
  3. Extras selection
  4. Shipping page
  5. Purchase

Here’s how the funnel would look in Kissmetrics. Remember these are not Dollar Shave Club’s actual numbers.

dollar shave club imaginary purchase funnel

Kissmetrics’s funnel report shows four steps per view. We have one more step, so we’ll click the little arrow button to see our final step and the conversion rate:

dollar shave club imaginary purchase funnel part two

We have a 4% conversion rate from Visit Homepage > Purchase. If this were the Dollar Shave Club’s data, they would have a roadblock on the purchase page. Less than ¼ of people convert from the shipping page to the purchase page.

The purchase page has the payment information, so it’s possible that people get cold feet and bail before purchasing.

For any subscription marketer, Kissmetrics shows you where people get stuck in your funnel. So, you’ll know exactly what you need to work on in order to keep growing your business.

The other roadblock would be converting people from selecting Extras > Shipping page, where they would lose nearly 70% of prospective customers.

These two steps come before the email address capture. We probably don’t want to ask for an email address too early in the checkout, so maybe we’ll create some tests:

  • Create some alternate copy below the products. If we can get more people interested in these products, they may not drop out of the funnel.
  • Offer a world-class guarantee, such as: “If you’re not totally satisfied with any of these products, send them back and we’ll give you a full refund. No questions asked.”
  • Introduce urgency into the purchase, something like “Order in the next 5 minutes and get a free gift!”

Tracking The Video in Kissmetrics

Do you remember that video link we were talking about earlier? It had the UTM medium “video.” With Kissmetrics, you can segment (break people into groups) by any UTM variable. It’s super easy to set up. All you have to do is create the UTMs, and Kissmetrics will automatically read and assign them to people.

We’ll segment people in this funnel report by their UTM medium. To do that, we just select campaign medium from our properties list:

segmentation campaign medium kissmetrics

We can select the gear icon to get an additional list of options for sorting people by campaign medium. We’ll sort them by first touch. People have been referred to Dollar Shave Club by many different campaign mediums. When we select first ever, we’re looking at the very first one that referred them.

campaign medium first touch kissmetrics funnel segmentation

Here’s an example of what the data might look like after we click “Apply”:

Dollar Shave Club segmented funnel part one

dollar-shave-club-segmented-funnel-two

There are a few things we’re looking at here:

  • We have three UTMs and one direct segment. Direct are people who came to the site without campaign medium. Our campaign mediums are video, social, and CPC (paid campaigns).
  • We’re tracking people in each segment as they go through the funnel. In this data, video is the top performing segment, with 2.3% of people converting to purchase.
  • Direct brings the majority of traffic during our date range, but by the end, it converts fewer people than the video segment. This may be because direct visitors don’t intend to buy. Video viewers basically see an ad before visiting the website, whereas direct traffic may just come to look around. In this sense, the video sets up the sale.
  • The paid campaigns have brought in over 500 customers. We’ll have to continue to let data come in and monitor our campaigns to ensure we’re running a profitable channel. We’ll also need to review our ad spending to make sure we’re recovering the costs of acquisition.

Identify Which Razors Keep Customers Around and Which Razors Lead to Upsells

A cohort is a group of people who have a similar characteristic. With the Kissmetrics cohort report, marketers can group people by time or property and track them over time. Let’s use a couple of hypothetical examples for Dollar Shave Club.

In the first hypothetical example, we’ll be tracking how Dollar Shave Club would retain users after their initial purchase. This cohort will show us how sticky the product is. If we keep new subscribers with us in the first few months, we know they’ve accepted the value proposition Dollar Shave Club offers and will be customers for a while.

To start, we’ll set our two events as Purchase and Subscription billed. The second event triggers when Dollar Shave Club receives payment from a subscriber. We’ll set our date range to one year.

retention Dollar Shave Club cohort kissmetrics setup.png

Under “Advanced options”, we’ll put people in monthly buckets and group them by razor type.

retention advanced options cohort kissmetrics

Let’s click “Run report” and get our hypothetical data:

purchased canceled cohort data.png

We see that the bulk of cancellations happen within the first few months. After 12 months, anywhere from 4-6% of customers cancel.

We’re not limited by razor type. We can group people by any property. We could group people by their referring channel or UTM medium like we did with the funnel report.

Track Upsells

Using the cohort report, we can see which products have the most upsells. This is beneficial for two reasons:

  1. We know customers in the highest upsells group are not just happy with our product, but are in fact willing to pay more. They are some of our most successful customers.
  2. We can organize our marketing around the products that lead to upsells. The people who buy these products are not only less likely to cancel, but more likely to upgrade.

In the second hypothetical example, we’ll set the cohort report to track people who have triggered the events Subscription billed and Upgraded. Subscription billed refers to people who have been billed for that month and thus are active customers. Upgraded means they’ve either purchased a more expensive razor or added other products to their monthly subscription. We’ll use a 12-month date range.

dollar shave club upsell setup kissmetrics

Under “Advanced options”, we’ll split people into monthly buckets and count people the first time they’ve had their subscription billed.

revenue report advanced kissmetrics 1

We’ll click “Run report” and get our data:

Dollar Shave Club cohort blade upsells

The bulk of upgrades happen within the first couple of months, likely because many subscribers want to add shave butter and post shave to their subscription.

Let’s change our display metric to “cumulative percentage of people,” which adds up all the percentages in each successive month. This will show us which razor has the highest upgrades.

To do this, we simply change our display metric from “Percentage of people” to “Cumulative percentage of people.”

changing display metric kissmetrics cohort DSC.png

cumulative cohort DSC kissmetrics.png

The Humble Twin razor would be a major winner here. This is the lowest-priced razor the Dollar Shave Club’s offers; and after about 4 months, more than half of the subscribers upgrade their plan to include additional products.

Tracking Razors by Revenue

The Revenue Report allows our customers to view a basic overview of their revenue and break it down (segment) by plan, product, or any other property. Dollar Shave Club could use this report to segment their revenue by product type, which would help them learn which products contribute the most to revenue.

To set up the report, we’ll first need to choose where to calculate revenue from. This needs to be the event that records how much a customer has paid. This is not automatically tracked in Kissmetrics, but can be set up with a little help from a developer.

Next, we’ll choose our date range. Let’s look at 13 months’ worth of data, from January 1, 2014 to January 31, 2015.

dsc revenue report advanced options kissmetrics

We’ll select Advanced options and calculate churn from the event Subscription canceled. This is not an automatically tracked event, Dollar Shave Club can set up the event to trigger when a customer cancels their subscription.

dsc revenue report advanced options kissmetrics

We’ll click “Run Report” and view our data (Remember that this is hypothetical data, these are not actual revenue figures).

dollar shave club kissmetrics segmented product

We see that the biggest revenue driver during the 13 months we selected would be The Executive razor. In fact, all the razors bring in more revenue than any of the other products.

One Wipe Charlies have the highest lifetime value, meaning customers that subscribe with this product are the most valuable for Dollar Shave Club. The Executive razor has the largest customer base and a solid lifetime value, but its churn rate is a little too high. If Dollar Shave Club had data like this, they should focus on getting the churn rate down for their most popular razor plan. That would have an immediate and direct impact on revenue growth.

Resurrect Cancelled Customers

Customer cancelations are an inevitable part of a subscription business. But when customers cancel, they’re not totally gone. It’s possible to resurrect some of them. And we can identify these people with a simple people search.

Here’s the setup for the people search:
people search kissmetrics setup.png

We click “Add a condition” for our search and select “Have done event”:

people search have done event

We’ll search for “Subscription canceled.” This event triggers whenever a customer cancels their subscription. We’ll make our date range the last 7 days. We want to catch people soon after they cancel, hoping that they’ll reconsider.

subscription canceled seven days people search

We’ll click Search and get the list of people. Keep in mind these are not actual customers, this is only a list of made up email addresses. Any similarity is coincidence.

Personsearch KISSmetrics people

We get a list of email addresses of customers who canceled. We can click on a particular email address and get a person details report. For our case, it’ll be best to export the data into a spreadsheet. After doing so, we can craft some copy for a resurrection email and send it to all the people in the list.

The people search isn’t limited to a search for canceled customers. You can search people by any event or property, whether they’re customers or not. You can find people who abandoned their cart, didn’t complete the signup flow, or viewed the cancelation page 5 times but haven’t pulled the trigger yet. Find any important subset of visitors and customers with the people search.

Why Kissmetrics Is the Perfect Fit for Companies like Dollar Shave Club

Let’s review the main points:

  • Dollar Shave Club is a men’s grooming and lifestyle subscription business. Kissmetrics is a SaaS tool for marketers. This post is written to show how companies like Dollar Shave Club can use Kissmetrics to grow their businesses.
  • After all events and properties are set up, Dollar Shave Club can create a funnel report to identify roadblocks to conversion. They’ll see step by step where people drop off in the funnel, and then they can create tests to improve these conversions.
  • Using a cohort report, businesses can group people together by property or time and view their behavior over time. Retentions and upgrades are perfect examples.
  • The revenue report can show how much revenue a company is getting from each product. Companies can also track customers by which channel they came from to identify which ones brought the highest ROI.
  • A simple people search can help businesses quickly identify canceled customers. The searches don’t stop there. Just set the conditions for the search and pull up a list of people. No need to bother with SQL or bugging engineers.
  • We didn’t even get into what a marketer can do with the Path Report and A/B Rest Report. We encourage you to read these posts (the two previous links we mentioned) to find out what other juicy features we have for SaaS and eCommerce businesses.

If you’re interested in improving your SaaS business, sign up now for a 14 day trial of Kissmetrics.

  1. Daniel Pishock Feb 10, 2015 at 12:45 pm

    This a brilliant way to drum up business. Good work and keep pushin’ it.

    Best,
    Daniel

  2. Danny Donchev Feb 11, 2015 at 12:37 am

    Great and actionable article. Their story got me thinking again if it isn’t better to invest a few weeks and months and go big with viral campaign and kill it instead of be consistent on inbound marketing

    Your UTM variables link point to 404 by the way.

  3. Raoul Plickat Feb 11, 2015 at 1:31 pm

    Hey amazing article!

    Do you have any article like that, which is about digital products in connection with physical products?

    Best,

    Raoul

  4. Very interesting article, very useful. I did have some trouble with the percentages in the last column of the Funnel Report segmented by campaign medium (the second table). The percentages in the Purchase column appear to be divided by the total number of site visitors across all media (503,641) instead of the number of site visitors by medium. Thus, for example, the overall purchase rate for “direct” should be 7,489/219,282 = 3.4% and not 1.7% as shown in the table.

    Thanks again for posting. I hope to find a way to refer to this in my teaching.

    • Jim,
      Thanks for checking my math on this. You are correct, the percentages in the purchase column were incorrectly divided by the total number of visitors.

      I’ll update the image with the correct numbers shortly.

  5. I have asked for this function from my original web builder. Thanks for post

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