Dollar Shave Club (DSC) is a disruptive razor subscription service with millions of members. In a busy competitive marketplace, the brand has boasted some of the highest customer retention among men's grooming subscription companies. As part of their on-going marketing strategy for achieving vertical-leading customer lifetime value, the brand challenged their agency, The Specialist Works (TSW), to drive more value through the affiliate channel, by improving in-channel customer retention rates.
The agency executed a strategic plan to drive retention and customer lifetime value through the affiliate channel by leveraging the Partnerize suite of tools. In line with Partnerize and TSW, the brand used affiliate marketing to drive long term value, ultimately debunking misconceptions and myths about low quality customer acquisition through the channel.
The Specialist Works created a clear measurement framework to present back the incremental improvements made through the campaign and show the value driven through the affiliate channel. TSW set goals to increase customer retention by 30% by month three and by 35% by month 12, after previous years averaging 10 to 15%, therefore debunking the channel’s misconceptions. DSC defines success as retaining 50% of members after 12 months. TSW set out to understand at which point a customer acquired through the affiliate channel becomes valuable and the sweet spot for commission rates to achieve lifetime customer value.
Using Partnerize’s Discover tool and supplemental integrations with Publisher Discovery and SimilarWeb data allowed The Specialist Works to access over 750,000 partners and more than 250,000 influencers. The agency selected partners based on their demographic and fit with the Dollar Shave Club audience.
Partners were selected based on their capability to move forward with flexible commissioning, powered by Partnerize’s dynamic commissioning functionality. Partnerize’s reporting dashboard was layered with a mix of first party and third party insights to achieve commissioning flexibility, providing bonus commission once a customer reached a targeted subscription point.
TSW challenged tried and tested commission strategies by launching a brand new commission structure which offered the customer a bonus once they reached the most valuable point in the customer cycle. They tested their approach and hypothesis with two partners first, confident that flexible or longer lead cashback payout times would not impact uptake, before rolling out to their selected partner ecosystem. The agency saw no decrease in volume by putting in place often longer lead times to the cashback to reach a customer’s account, in actual fact seeing a substantial increase in volume.
The Specialist Work’s proprietary measurement framework, created with the data from the Partnerize platform, allowed the agency to monitor the retention rates at three months, six months and 12 months, benchmarking against previous campaign performance. Through brand and goal alignment the team was able to increase retention rates, past three months, by 84% year over year.
Since this approach was rolled out, the customer retention rate for customers reaching their third month has increased by 27% YoY. The agency also reports that when people reach their third month there is a higher chance they’ll continue after this point, with 50% of customers who reached their third month continuing their subscription past 12 months.
Affiliates has now achieved a higher 12 month retention rate higher than all their other paid channels.
“A strong case study that demonstrates how setting clear strategic objectives and defined, measurable targets at the outset can deliver an informed and successful strategy.”
“A great example of DTC marketing, with results to match the effort put in and the innovation behind the unique commission structure and bonus to consumers to ensure they signed up for longer terms.”
“Nice campaign, simple consumer offer that creates longevity to the brand to consumer relationship and not short term gimmicks.”