Back in 2010, a New York City start-up called Birchbox offered women cosmetic product samples that were tailored specifically to their tastes and preferences based upon a self-reported “beauty/grooming profile.” Today, Birchbox generates about $40 million in revenue annually, most of it from their 300,000 subscribers who pay $10 a month to receive the boxes.
Since then, the “box service” concept has exploded, offering everything from toiletries to fishing supplies. The box service concept is brilliant in its simplicity and its effectiveness in connecting retailers with their customers. It also provides six powerful lessons in how to communicate effectively in the Interactive Age, as you will see in these excerpts taken from a recent Washington Post story on this innovative marketing strategy.
1. Joint venture partnerships magnify success: If the 20th century was a winner-take-all poker game played with a stacked deck, the Interactive Age is parachute day in gym class. You only “win” if everyone plays together.
Success in the box service game starts with a partnership with wholesalers who are willing to provide a steady stream of products “at a discount or free from companies hoping to be introduced to new customers.”
2. People will give valuable data and honest reviews for trinkets and beads: If the NSA really wanted to learn the most intimate details of our lives, they should have just started a box service. All protests to the contrary, people will gladly share intimate details about their lives and desires for a box of product samples. And we will happily—and honestly—rate those products in service to our community.
“Much of the appeal for retailers is the personal data they collect from customers … Subscribers share tons of personal data to customize their boxes. They also provide retailers valuable feedback on products before they hit store shelves.”
3. People rely on the advice of peers in newly formed “communities”: Most of us don’t take our lead from four-out-of-five-dentists anymore. Instead, we rely on the advice of friends, even friends we just made by virtue of our shared taste in a particular face moisturizer.
“Subscribers, a vocal and social-media-savvy bunch, have set up blogs and online forums to review the best boxes or swap goodies to fit their tastes.”
4. Subscriptions—“The real money is in inertia”: I just bought an ASUS 802.11ac wireless-AC1750 router for $190. It is so the sh*t that I haven’t yet figured out how to open the box it came in. As I was concocting ways to justify the expense, I calculated that over the years I have paid Comcast $849,000 in monthly rental fees for a wireless modem that had less range than a thalidomide baby playing shortstop.
“There are downsides to subscription boxes. ... consumers may lose interest but be too harried to take the extra step of canceling their membership. By the time people realize they don’t want [a service] anymore, it takes time for them to cancel it. … The real money is in the inertia.”
5. Curation is currency: No one actually drinks from a fire hydrant, but when we were kids we’d often try to drink from the garden hose with the nozzle set on “eviscerate.” Not sure why we did that beyond the fact that we were idiots, but I did learn that if I blasted the water into the palm of my hand I could get a drink without boring a hole through my cheek. When I’m looking for information online, the Internet often feels like that high pressure jet of water. Curators, in turn, act as the palm of my hand, providing just enough good information for me to get the job done. The same can be said for the box service.
“Americans … are on the lookout for deals and they are used to the convenience of online purchases. Subscription boxes let ‘experts’ do the research for time-pressed shoppers and send their recommendations to people’s doorsteps.”
6. Start with a gift ... and make sure it's the good stuff: In the 20th century, nobody but bakery shop owners and drug dealers gave away samples of their best products. But in the Interactive Age, it is a mandatory first step in relationship building.
“For retailers, monthly boxes are like offering shoppers a plate of appetizers: Sample what you like, come back for more — and if you don’t like something, give it to your friends."
So next time you’re trying to raise money, sell a product, increase your membership, or build a coalition … just remember, the best lessons come in little boxes.