By Brent Leary, Technology for Business Sake
Sometimes a person who has a good business idea isn’t able to translate it into a successful business. But that doesn’t mean it can’t be done. Internet entrepreneur Rohan Gilkes was not the original founder of WetShaveClub.com — a monthly box subscription service sending supplies to those men who prefer old-fashioned, traditional shaves.
WetShaveClub.com was started by someone else six months before Gilkes heard about the business. He had been running the site for some time, gotten it up to about $300 per month, and wanted to sell it because it really was not paying off based on the effort he was putting into it.
But Gilkes saw the potential in the idea and bought out the original owner for $4,000. And in less than a year, he turned the 12 customers he inherited into 1,500, and his $4,000 investment into $350,000 in revenues.
Gilkes shared with me how he and his team of four people were able to turn someone else’s good idea into a great business in such a short amount of time.
First Things First
The first thing Gilkes did was take a look at how the website was branded, and redesigned it to make it friendlier. They changed a few colors, re-did the copyrighting to connect better and speak more clearly to the customer. They also redesigned the box as well, expanded the product line and raised prices by almost three times.
Traffic was low when they took the site over. But in two months they had increased their site conversion rates by almost double, so they were in a good position where all they had to do was figure out how to drive as much traffic as possible to the website.
WetShaveClub.com started very close to 1.5 percent conversions and ended up a little bit over 3percent conversions. So, for every 100 people that come to the website, they expect three of them to sign up now for the service. According to Gilkes this is where you want to be for a regular eCommerce store. And it’s very good for a subscription box business because the subscription box offer requires the customer to sign up on a recurring basis.
Generating Website Traffic
Gilkes says the site is up to 1,000 visitors per day now, which is pretty good for a niche site like WetShaveClub.com. And because they have recurring revenue, they can also afford to have a slightly higher customer acquisition cost.
For a one-time sale on an ecommerce store, most small businesses can’t afford to lose money on the sale. But Gilkes says they could lose a little money on the first box, because they can make that back in month two, month three and so on. And that allowed them to go into Facebook Advertising and Google AdWords, and re-targeting; actually spending some money to acquire customers after they did all some other free stuff.
Keeping People Subscribed
The value of the subscription business is based on how long you can keep customers, and how long you can keep customer times how much money you can make per period.
WetShaveClub.com paid special attention to creating a community around their products. They decided against telephones because it introduces a few more difficulties. So they went with online chat and were able to solve problems the customers had right there on the website.
On the community side, they started a Facebook private group for customers called The Wet Shave Lounge. It’s like a VIP focus group where they post new products before they’re released. They’ll get feedback on past boxes, see scents people like and don’t like, and really get to know their members which allows them to build deeper relationships and have folks stay with them much longer.
Having a strategic plan for implementing a great business idea can mean the difference in creating a great business. Even if that idea wasn’t yours. AT