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

July 21, 2016 Leave a comment

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 The notion of buying something that you may or may not use in the future is becoming outdated.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

 

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About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

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