(Billion) Dollar Shave Club Highlights Value-As-A-Service

Unilever agreed to purchase Dollar Shave Club for $1 billion. The five year old company built a direct-to-consumer subscription razor blades service and expanded its offerings to include its own brand of shaving cream and after-shave lotion. Its 2015 revenues were $152 million.

My take: Wow, that’s a lot of money. Why would Unilever spend so aggressively on this young company? Because it’s a shining example of one of the key CX trends we’ve highlighted called Value-As-A-Service (VaaS). Here’s how I described this growing trend…

As consumers get comfortable with companies like Uber and AirBnB and use more iTunes apps and cloud-based applications, they are being trained to pay for things as they need them. The notion of buying something that you may or may not use in the future is becoming outdated. In 2016, we expect this consumer behavior to push more companies to break apart their offerings into bite-sized pieces. As this happens companies will need to earn loyalty more frequently and ensure that customers get value from the things that they purchase.

VaaS will require companies to build new skills, including:

  • Developing simplified offerings
  • Providing subscriptions
  • Ensuring customer value, not closing deals
  • Tapping into rich customer behavioral data
  • Accelerating the pace of learning and adjusting

Is Dollar Shave Club worth $1 billion? I have no idea. But if this acquisition helps Unilever tap into the VaaS trend, then I think its investors will be happy.

The bottom line: All companies need to prepare for VaaS

 

Written by 

I am an experience management transformist, helping organizations improve business results by engaging the hearts and minds of their customers, employees, and partners. My "job" is Head of the Qualtrics XM Institute. The Institute is still being established, but our goal is to help organizations around the world thrive by mastering Experience Management (XM). As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. And, as many people know, I love to speak about these topics in almost any forum. Prior to joining Qualtrics, I was managing partner of Temkin Group (leading CX research, advisory, and training firm), co-founder and chair of the Customer Experience Professionals Association (CXPA.org), and a VP at Forrester Research. I'm a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Check out my LinkedIn profile: www.linkedin.com/in/brucetemkin

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