Birchbox is Winning by Doing Something Every Startup Should Be Doing (But Isn't)

Birchbox has been one of the more impressive startups in the beauty world of the last decade. It’s one I’ve been very familiar with for some time, having first met CEO Katia Beauchamp in 2010 when she was introducing her oft-copied beauty sampling subscription service to Kiehl’s. At the time, I was managing global digital marketing for the cult beauty brand, and saw some major potential in Birchbox. Seven years and many challenges later, with over than one million subscribers and four million total customers the brand is still standing strong,

I caught up with Beauchamp at the recent Millennial 20/20 Summit in New York. We talked about how long it took for Birchbox to feel like it had nailed talking to a specific woman – its customer. “Never nailed,” Beauchamp laughed. “I’ve never felt better about the company than I do today, but there are always lessons.”

The real epiphany for Birchbox has been homing in on one specific type of consumer: a “non-beauty consumer,” if you will. Beauchamp believes it represents herself and her team, and the majority of women in general, yet they are often neglected by major beauty brands and retailers.

Who, then, are these neglected customers Beauchamp and her team connected with? The typical Birchbox customer is is around 31 with a household income of approximately $ 80,000 per year, but Birchbox’s internal team likes to think of her as a discerning multitasker who has more of a casual relationship with beauty. Like most women, she wants to look her best and uses beauty in some way, shape or form. At the same time, she isn’t interested in taking the time to research and explore all of the options out there. “We’re not the type of women who would be consuming a beauty magazine,” Beauchamp explains. The Birchbox woman just wants it to be as easy as possible to get the best products, without doing all the work. These women want to look their best and have access to great products, but they’re not quite defined by their love of beauty products.

Birchbox wants to focus on this specific woman and make her beauty experience better. Do this right, and Birchbox’s platform will become “stickier” [VG1] to this target consumer, and the customer lifetime value (LTV) goes up for Birchbox. Everyone wins.

Homing in on the customer has given the internal Birchbox team a sense of focus, which has been great for morale. That’s not something to be taken lightly, especially in the startup world, where things can get rocky to say the least.

“We’ve been through every temperature of the market,” says Beauchamp, who in some ways credits the market demanding growth that’s led Birchbox to this laser focus on the customer “[This focus has] led to more joy across the whole company. The customer is what we do value. It’s such an obvious opportunity and no one is talking about it.”

As a business owner myself, I identify with this newer clarity: when everyone zigs, it’s time to zag. That’s what Firebrand Group did when it pivoted from a standard digital agency to a think tank devoted to helping brands and agencies futureproof themselves by making accurate bets on what tomorrow holds. But in Birchbox’s case, the funny thing Beauchamp points out is that she hasn’t homed in on this tiny demographic: there are technically more consumers in the area Birchbox is focusing on, not less. “It’s just that individually, they are lower value” from a dollars and cents perspective, and that’s why many companies don’t focus on them as much.” Yet they make up approximately 80% of the market, and those non-beauty obsessed consumers who shop with Birchbox have doubled her spend in the last year. Birchbox has proven that this demographic has the potential to spend if she was spoken to more, but the beauty industry just hadn’t been welcoming enough to her.

How, then, to recruit these customers? Birchbox’s marketing team needs to be focused on Google and Facebook, says Beauchamp. “It doesn’t represent everybody, but it does represent a lot of people.” As a startup, you can’t spend one-seventh of your time on seven different platforms apiece. Rather, it makes sense to invest the majority of your share on a few big opportunities to reach your target customer.

Of course, that doesn’t mean you shouldn’t be on the lookout for other marketing opportunities. Birchbox has a young team that loves Snapchat, so the brand has a significant amount of traction on that platform. After all, the team felt passionately about Snapchat and poured a significant amount of effort into the platform as a result. That being said, Birchbox is small and nimble enough that “if something came in like a lion,” Beauchamp says, “we can easily hire a small team around that,” provided her target customer is on that platform.

“When you decide that focus is going to become your weapon,” says Beauchamp, “it’s much easier to have clarity.” And with a mantra like that, there’s a good chance you’ll be reading about Birchbox for many moons to come.

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Inc.com

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