The popularity of subscription boxes isn’t slowing down.
There are boxes for everything from foods to wines to clothes to makeup. Consumers love them because they’re a great way to discover new products. Ecommerce business leaders love them because of the reliable monthly recurring revenue.
But because subscription boxes are such a successful business model, the market has also gotten far more competitive. This is exactly why Yosef “Joe” Martin decided to get directly involved in marketing his beauty subscription box company, Boxycharm.
He started the company back in 2013 and as CEO, quickly turned Boxycharm into a multi-million dollar company by offering full-size beauty products in a box. He’s well-known to his customers, or “Charmers”, for Instagram live stories where he previews each month’s box.
But Joe didn’t start his career in subscription boxes, of course. He first built an online merchandise liquidation company in college to help pay for his tuition, eventually working with big brands like Macy’s, CVS, and Walmart to sell leftover inventory. But he quickly recognized a massive opportunity in the beauty box market.
In this exclusive interview, Joe shares:
- Why offering full-size and trendy beauty products was so important to success
- The importance of putting a human face to the Boxycharm brand
- How social media and influencer marketing drives growth
- …and much more
Listen to Episode 19: The Empowered Marketer
Read the Interview
1. How do you actually find your customers? Who is your target market right now?
A lot of this is word of mouth. Someone gets a box and they show it to their friends and family. It’s very common to see multiple boxes being shipped to the same address. You’ll see a group of them at an office or a house with a mom, daughter, sister who all have it. We grow organically. We could shut down marketing and keep growing.
Social media is also a big driver because today everyone is a TV channel basically. If you play on social media, if you snap a picture, take a little video, people would see it — your friends, friends of friends, and people that just stumble upon your picture. Essentially, that create brand awareness. We also work with influencers because that helps with the awareness factor and drives direct growth. We also have a referral program that incentivizes people to keep talking about Boxycharm.
We’re not doing anything out of the ordinary, to be honest. I’m not going to tell you there’s rocket science in what we do. The product is what makes the difference. If your box sells itself, you grow. If the box doesn’t sell itself, it doesn’t grow. We don’t spend an arm and leg on something that doesn’t convert, and we keep that money for placing better products in the box. That’s how we keep growing.
2. Since the products are so important, how do you select the what goes into the boxes? Do you work with specific brands or do you have a team that actually looks at trending brands?
This is an ongoing process where we have focus groups looking at products and data from clients. We look at lots of data telling us what’s going to be trending and we put a bit of everything in each box. Our customers also tell us what they want and what they don’t want.
We also have relationships with top brands and they tell us what they’re about to release. We separate it into how is the brand trending, how is the product category trending, then what about the product itself, and what is the group of Charmers that are interested in that product. It’s not one answer for everything, but at the end of the day, we have a lot of input of products coming in from different places.
3. Why did you decide to start doing Instagram Live stories about each of your boxes? There aren’t a lot of B2C brands where the CEO is on Instagram and so actively involved in marketing.
In today’s world, ask yourself why would someone buy Boxycharm versus a different brand. Why? There are plenty of other boxes out there, what makes us different?
If I have a local store and I like to go there because I like the vendor, I would walk in and it’s a personal experience. If I find out that someone has a better deal, at least I’m gonna go and tell him, listen, someone else sells it cheaper can you at least match the price? I’ll give you the chance.
That’s how you would do it in a physical store. I don’t have the ability to physically engage with every Charmer, but I wanted them to see the people behind the scenes — and not just me. We believe that that is going to be the interaction that we can do better than the competition.
If I can go and speak to my Charmers, and if there is a product they had a question about, I can go and answer directly. Then they understand that we care about our people. I was apprehensive at first because you really don’t know what to expect. I was a private person before then, in that my accounts were private. From one day to another it just started shifting. It wasn’t pre-planned or pre-meditated — it was completely organic. I just saw a lot of support and positivity so I decided to just continue doing it. That’s what makes Boxycharm a different brand. What I can I do to give you the best customer experience? I’ll be in the front of the line. If there is a problem, I’ll be the one facing it, and that’s just what I think everyone should do.
4. You’re working really hard to build these one-to-one relationships and keep customers happy and loyal, but what about churn? Since you are a subscription-based business, how do you deal with and minimize churn?
We have two types of churn: voluntary and involuntary. The involuntary is if their credit card accidentally expired, and then voluntary, where someone wanted to cancel. The interesting fact is that when people voluntarily cancel, we send them a questionnaire and most of them actually said they are planning to re-subscribe. So it can be a financial reason, or they didn’t like the products in one box, and so on.
The main question is how many people churn and how many people come in exchange right? Can you bring in more new customers and can you actually predict the rate of churn versus new customers? There’s a whole science behind this, but I like to keep it simple before I go into scientific formalized, rocket science.
Just keep producing great boxes. Make sure they know about the next box. Make sure you engage with them on all social media. Ask them from the get-go what platforms are they on. Don’t just use your email as a driver to go and announce what’s coming in the box — make sure you announce it on multiple platforms. Make sure throughout the time that you’ve been communicating with them, they wanted to stay on your platform even if they churn.
If you’re keeping them engaged, they’re still Charmers. They will follow you on Twitter, Instagram, Facebook, Snapchat, Pinterest, anything that you can keep that hook with them. That relationship is the key. Because it’s okay to leave when you have a reason to leave but when I have a good box and it’s your time to come back, you can. I want to make sure you had a chance to know what’s gonna be there, and not just through emails
So as long as you produce the right boxes, you give them the right experience, send the box on time, reply well on customer service, and give an awesome social media experience — you win. That’s how you can simplify your life. The rest, all the scientific part behind it is going to be the five, ten percent extra. The base would be great products in a box, great communication on social media and a great experience. That’s how you’re going to get them back.
5. What do you think is going next for ecommerce and B2C companies?
I don’t think social media is going to go any time soon. I think it’s going to change within itself and move away from these big influencers. It’s the micro-influencers, those ambassadors, who matter most. How can you get a process where people that get your product will snap a picture of your product? How can you get them engaged? If you are big and have a million customers, they’ll be way more impactful on social media than only traditional influencers. I think that’s going to be the challenge everybody will be talking about.
I don’t think social media is going anywhere, but I think it’s just going to evolve. I mean TV was out there for so many years right? It takes a while to learn how to cope with this new platform. It’s just going to be more and more competitive and there’s a new generation that was born into it. They get to a certain age they’ll open their own businesses and they’ll be more literate than the older generations. You just have to adapt and keep up.
To learn more, check out www.boxycharm.com, or follow them on Instagram @boxycharm.