iDirect resides at the intersection of digital technologies and direct marketing practices. Online e-commerce adds affordability and accessibility to direct marketing's classic addressability and accountability. The 4A’s of the powerful iDirect model are driving an explosive boom in going direct.
Today, when it is so easy to connect digitally, just about every company is in a direct relationship with its customers. Obtaining subscribers, who sign up online to a long-term commitment, is a sure route to an enduring relationship.
Update Posted July 29, 2016
From Zero to a Billion Dollars in 4 Years
Just 4 years after start-up, Unilever is paying a hefty billion dollars to acquire Dollar Shave Club. In Release the Power of Entangled Marketing we describe Dollar Shave Club’s customer entanglement in glowing terms. Even so, we never expected so huge a valuation for the iDirect online business in such a short time.
Entangling the brand and the consumer -- when all the right buttons are pushed – produces amazing results.
Unilever paid five times this year’s projected revenue to bring the direct-to-consumer marketer under its wing. Traditional conglomerates like Unilever and P&G are under pressure to learn from Dollar Shave Club, Warby Parker, Birchbox and other disruptive start-ups that march to a different drummer.
The innovative newcomers are involved with the consumer in a genuinely supportive rather than a mostly exploitive manner. It’s a complete reversal of leftover thinking from another era.
Enthusiastic commitment by members to the Dollar Shave Club is due to more than getting great shaves for a few bucks a month. There is the pleasure for both the company and the consumer in giving the Gillette brand its much-deserved comeuppance.
Bloomberg gives lots of credit for the brand’s early success to what happened on the day Dollar Shave Club started selling subscriptions in March 2012. “The company released a YouTube video starring founder Michael Dubin. He tells viewers the product is f***ing great, so gentle a toddler could use it. The website crashed, but the blades sold out in six hours. The video has been viewed about 23 million times.”
Soon there were TV commercials spotlighting the pricey Gillette blades locked away in plastic drawers at the drug store. The laughable spots show what can happen to someone who tries to grab a cartridge without the help of a sales person.
Dollar Shave Club steadily increases its “Share of a Man’s Life.” Home delivery of top-quality razor blades to 2 million members now includes offerings of an assortment of men’s toiletries. There is Awakening Body Cleanser, Daily Face Moisturizer, Good Shake Hand Cream, a hair styling product and One Wipe Charlies, “the buttwipes for men.”
The billion dollar cost of Unilever taking over Dollar Shave Club is money well spent. The battle for the men’s personal care market in the age of entanglement is now with us. With a smart, iDrect marketer on board, Unilever moved a step ahead of P&G. Stay tuned for the next move.
Update Posted July 5, 2016
Rent the Runway Launches Unlimited Rentals
The subscription model that did so much for classic direct marketing in the analog era has found new life in the Internet era. Dollar Shave Club for razor blades, Amazon Subscribe and Save for almost any product and the subscription box craze set in motion by Birchbox are only a few examples.
We are seeing breakthrough after breakthrough for the membership model made possible by digital technology and an entanglement mindset.
One of the most remarkable recent iDirect variations is the Unlimited subscription plan launched by Rent the Runway. It can completely change how a woman views her wardrobe.
Members sign up to select three designer dresses, tops, skirts or accessories from top-flight fashion houses including Proenza Schouler, Jason Wu, Derek Lam and Carven. The delighted recipient controls how long she keeps each piece, whether for a weekend or six months. At any time she can send 1, 2 or 3 items back and choose the same number for her next shipment.
Everything is insured. Rent the Runway handles the dry cleaning. Shipping is free both ways.
Rent the Runway began 7 years ago as the first online service renting designer dresses for special occasions. Now, after two years working out the kinks, they have come up with an amazing entanglement plan.
Thanks to an enthusiastic response to the Unlimited rotation of designer items, Rent the Runway revenue is on track to surpass $100 million in 2016. Thrilled members commit to spending $139 a month – that’s $1,700 a year for looking like a million.
Co-founder Jennifer Hyman told USA Today: “Any business. model that has subscription in front of it is really appealing. It is cash flow you can count on if you make it work. If you have to recruit customers more often, the cost cuts into your profit. With a subscription you just have to retain them.”
Hyman talks about today’s much more fluid attitude towards owning stuff. “There’s also the Instagram effect. With so many teens, 20- and 30-somethings chronicling their every outfit via social media who wants to repeat a look,” she said.
The co-founders are not content with simply offering the Unlimited program online. They also created radically different brick and mortar stores in New York, Chicago and Washington D.C.
A fashion-conscious woman can book a 45-Minute appointment to work with a personal stylist. She gets one-on-one real life attention while choosing from the selection of styles seen on the Rent the Runway site.
The Unlimited iDirect subscription approach and its retail counterpart are as much of a game-changer for designer pieces as AirBnB is for how living space is shared.
Update Posted April 25, 2016
Celebrating $100 Million in First 24 Months
The 14 billion dollar mattress industry was ripe for disruption. Along came Casper two years ago this month to turn the tables on the category’s terrible business practices. Not only did Casper reinvent the mattress. Just as important, they reinvented the mattress seller/buyer relationship from “taken-for-granted” to “entangled twosome.”
All of this resulted in $20 million in sales within the first 10 months of iDirect marketing and a cumulative $100 million in revenue just now reported after the first 24 months.
After testing hundreds of mattress types, Casper came up with a single model delivered free that works for everyone. Consumers enjoy a totally simplified, online shopping experience with a 100 day free trial offer. If you don’t like it they’ll take the mattress away at no cost to you.
Shipping cost is drastically reduced by compressing the foam rubber to fit into a carton easily handled by UPS, The mattress actually expands to its full size after you pull it out of the box. Casper’s mostly young customers love filming their unboxing experiences on smart phones for sharing via YouTube.
According to co-founder Neil Parikh in an Inc magazine interview, “People usually buy mattresses about every 8 to 10 years. Most companies don’t care who you are – they’ve made their sale. For us, that’s the start of a long-term relationship. It’s not just about selling you a bed. It’s how do I make this person our biggest advocate.”
The company has 15,000 consumers who are part of the Casper Labs product development group. They come to events and test prototypes. These entangled evangelists spread the news about their obsession with getting a good night’s sleep and how Casper makes it happen.
From the start, the firm’s founders understood that they were in the sleep business not simply into selling mattresses. The day after the “bed-in-a-box” product was launched, Casper began reinventing pillows and sheets. It took 16 months to create a single pillow with universal appeal. They went through a similar process to come up with a sheet that breathes well and lasts a long time.
Neil Parikh believes we have only seen the start of what can be accomplished by Casper. He said: “Customers have asked for everything from lights to sleep trackers. We haven’t decided what the next product is. But we do know the category is enormous.”
Thirty-five million people bought mattresses in 2014 and the sellers almost immediately lost touch with them. Not so with Casper’s iDirect approach to entangling brand and customer. in pursuit of a better night’s sleep. There is no limit to the lifetime value of customers who purchase the “bed-in-the-box” and then go on to buy sheets, pillows and whatever else Casper offers.
Update Posted April 19, 2016
Jeff Bezos Unbundles Amazon Prime
Nobody is better at being an iDirect marketer than Jeff Bezos. With Amazon Prime, he has tens of millions of people pre-paying $99 a year to get a bundle of benefits. Membership growth was up 51% last year.
Now, according to CNNMoney, Amazon is unbundling its Prime services. You will be able to get the TV and movie streaming service alone for $8.99 a month. The cost is below where No. 1 competitor Netflix will be with its recent price increase.
The other big news is that the full Amazon Prime bundle now can be had on a monthly payment plan for $10.99 a month. Although it’s $32.88 more than you pay for an annual subscription, the new plan is sure to attract millions of additional customers.
Jeff Bezos has moved into video streaming as a separate business entity. At the same time he is making available the convenience of monthly payment for Prime, including Prime Video and Music, free two day shipping and more.
Amazon Video subscribers are candidates for an upgrade to Amazon Prime. Monthly payment trial subscribers for the Prime bundle will be converted by the millions to the $99 annual pre-payment plan.
In a letter to shareholders, Bezos commented “Amazon Prime is so good you’d be irresponsible not to join.” Bezos has made it easier than ever for that to happen.
Amazon remains on strategy to be entangled in consumers’ lives at every possible waking moment.
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