Unpacking Dollar Shave Club’s ‘No B.S.’ D2C Approach with Tsega Dinka

Episode Transcription

Tsega Dinka:
Try to branch out and not only look at other D2C brands, but look at SaaS and B2B and gaming companies, because ultimately whatever the end product is, like the engagement of mechanics, the conversion mechanics, can apply across industries. And the more you broaden your inputs that way, the higher chances are that you will come across something that may not have yet been brought over to your particular industry, that may be very applicable.

Meghan:
Hey everyone, it's Meghan and you're listening to a Better Product original series. Tsega Dinka was the VP of digital product for Dollar Shave Club. Some of you may know Dollar Shave Club from their brilliant commercial years ago, but for those who don't, they're a D2C subscription brand for all your shaving needs. And for me, it was one of my first interviews as co-host for the show, which Tsega was great about and we had a ton of fun. As we got into the conversation, I wanted to understand how Dollar Shave Club structures their teams. Originally, they looked at growth and monetization as two separate things. What they found is that those teams can't be siloed.

Tsega Dinka:
It's a single team that is cross-functional be it product, acquisition, lifecycle. They're ultimately responsible for bringing in as many customers as possible of whom the retention and monetization is benchmark against the target, to ensure that there's a certain level of quality that's being met.

Meghan:
Dollar Shave Club is known for their brilliant marketing and products, they've revolutionized an industry. Tsega shares that if you're looking for inspiration simply look around, it's happening everywhere. And don't just look for inspiration in your industry, in your own vertical, in your own business model, you get the idea. The same advice goes for your role, there's a lot of learning to be done across the organization. Don't stay in your product bubble and learn from other teams in different departments.

Tsega Dinka:
One of the things that I've always wanted to have prioritized and as a product manager and as a product leader, is to even within the company to get really deep with different groups within the business to understand holistically how the business operates.

Meghan:
We covered a lot in a short amount of time. Let's get into my conversation with Tsega. Today, we are joined by Tsega Dinka, the former vice president of digital product at Dollar Shave Club. So Tsega, thank you so much for joining us. I know you started pretty soon after the first product was launched. Could you give us a little bit more detail about your background and the different roles you had throughout that time?

Tsega Dinka:
Absolutely. The interesting thing for me, was just immediately prior to Dollar Shave Club, I was at another startup that was also being incubated by the same VC studio here in LA. And obviously, that one did not last long, because I ended up at Dollar Shave Club. But what did happen was, as I was working in this previous startup, I would see the corner where the Dollar Shave Club team sat and just how busy they were, this is after the original video. And they clearly had already identified a good deal of success and resonated with the audience and the shoppers, they were trying to keep up with the orders. So luck would have it, that original startup that I was working at did not succeed, but also happened that at the same time, Dollar Shave Club had just raised a series A and they were starting to build a product team.

Tsega Dinka:
So I joined at that point coming in as a first IC product manager, reporting in to a VP. And for me, it was really an opportunity to go find success, both in my role, but also within a business that, although it was early stage, the science of what it could be were already there. So that maybe some of the common risks associated with startups did not really seem to be there to the same degree that they would be in some other startups. So I came in and really the first few years were focused on building both on the consumer facing experience side. There was a lot of work to be done as the business was starting to introduce other products beyond the razor. When I joined the three types of razors were the only products and soon after, shave butter, which is probably one of the most well-known products launched.

Tsega Dinka:
There's a lot of work to think through. How do you introduce these products, both from a shopping and storefront perspective, but also in the checkout funnel? What are the different ways you can offer upsells without harming conversion? And similarly for the existing subscribers, what are the ways you can engage and allow them to discover all these other products on an ongoing basis? So that was a big part of the work that happened in those first few years. And also on the product side, we built our gifting product, both e-gifting, as well as physical gifting. We also went through a couple of different iterations on the backend and eventually ended up building internally the whole backend for the subscription system. So there is lots of work to be done over those few years.

Tsega Dinka:
From there, I moved into more of a growth focused role where there was just a tighter alignment with the acquisition team and really informing the work that was happening on the product side, through the lens of what the shared objectives were with acquisition, thinking through audiences, the different costs targets that they were trying to hit and how from a product side of things, you could help accomplish those objectives, right? Whether it's thinking through different landing page strategies, or even when you look at the conversion funnel, what are the things you can do to ultimately help improve conversion? And as a result, reduce the cost of acquisition. So I spent a few years in that role and then went on to do a couple other things, one on the operations side and one on the leadership side. But I think that there's obviously, a lot of lessons along the way. Really, at the growth stage of my experience, I think are where I found some interesting lessons.

Meghan:
Yeah. Could you tell us some of those that you're thinking of?

Tsega Dinka:
For Dollar Shave Club and for myself, growth effectively had been a theme from the moment I joined. Almost immediately, there was an experimentation program that was established and optimized and enabled. And we had an agency that was helping run that for us. And I was also overseeing that and coming up with different hypotheses and thinking through ways to optimize the user experience. And this, I would say maybe the first phase of growth, there were also other functions that were thinking about growth, but it was all happening very independently, right? So the marketing team could be thinking about growth, both from an acquisition standpoint, thinking about what channels to go and run advertising in, or which audiences make the most sense from both an acquisition and retention standpoint.

Tsega Dinka:
And similarly, the life cycle marketing team, which essentially is CRM email marketing, was focused on looking at how they can grow open rates, how they can grow add to carts and retention, right, from the email campaigns that they were sending out primarily to the subscribers? So I think everyone had the same intention and the same end goal that they were going after, but really for better or worse, it was happening in silos. So that first phase, I would say maybe it was the infancy or the initial phase, it was growth, but really locked into functional groups. So from there, as the company started to grow and there was clearly opportunities for efficiency. An organizational update was made to essentially take the product team and create two themed subgroups within it.

Tsega Dinka:
One was growth, the other one was monetization. So in this sense, growth was primarily identified as acquisition growth. So how do you grow your subscriber base? And on the other side, monetization was essentially defined as, how do you grow revenue? And how do you maintain and retain your subscriber base? And so each of these groups within products then, were tightly coupled on the growth side with the acquisition team and on the monetization side with the life cycle marketing team. And what this allowed was, to a degree, the functional silos were removed. And now you have growth product team. At that point, I was the one leading that, partnered up with the head of consumer acquisition. So ultimately, we started to really compare notes and build out our roadmaps and establish our goals and objectives collectively. And there was a unified effort, if you want to call it that.

Tsega Dinka:
So on the other side, my counterpart that was overseeing the monetization product team, also had a partner on the life cycle side that they partnered up with, and they're also developing roadmaps objectives, et cetera. And I don't know if you are seeing where this is going, but essentially we solved for one challenge of functional silos and we moved into more KPI silos. So you had a group that was really looking at conversion rate and cost of acquisition. And then you had another group looking at retention and monetization, and to maybe a great degree, there would be some awareness of what each group was doing, but they were effectively operating independently, the growth versus monetization groups. It was great, because at least compared to the original phase, the first phase, it started to allow the work to be more coordinated, more coupled, more focused, both on the product side and on the marketing side, especially in retrospect, it feels pretty clear.

Tsega Dinka:
But there's such a tight dependency between the work that happens on the acquisition side, right? What customer you're bringing in, which subscription you're bringing them in on, what they saw on the way in, what promotions they might've been offered. All of that ultimately affects how they behave once they come in the door, right? It's the same customer, if they came in on a promotion, maybe they're not going to stick around as long, because they really just want to take advantage of that promotion. If they came in from a certain channel, there's just inherent behaviors between customers that might be acquired from Facebook versus say Google search, right? Different intents, different mind sets. So ultimately, there's a tight dependency between acquisition and monetization or growth and monetization. And it was pretty clear very quickly, that there needed to be a way for these two groups to find a little bit of common ground at a minimum.

Tsega Dinka:
So that was initially addressed by effectively establishing shared overlap period, if I recall correctly, maybe the first month of a subscriber and how they behaved during that first month as the responsibility of both teams. So that allowed this overlap period that made sure that the acquisition team was not just driving subscribers at all costs, knowing that maybe sometimes they come in the door and they cancel right away. They couldn't do that, because that initial first 30 days and what the behavior and the retention was for that customer was as much a responsibility of the acquisition team, as it was of the monetization team. So that helped to a degree, but ultimately there are longer-term impacts still once a customer comes in the door, whether they do 3, 6, 9 months, 12 months down the road, that are predetermined in some ways based on how you get them in the door.

Tsega Dinka:
So that led to, I would say the most recent and what you might naturally arrive at, the most ideal state, which is a single team. Their name is a growth team, but ultimately they are responsible and have accountability across all touch points and the whole life cycle, prior to acquisition through acquisition and retention and monetization. So it's a single team that is cross-functional be it product, acquisition, lifecycle. They're ultimately responsible for bringing in as many customers as possible of whom the retention and monetization is benchmarked against a target to ensure that there's a certain level of quality that's being met. So single team, single dreams, single set of objectives, but ultimately ownership across the whole journey.

Meghan:
What's interesting to me about what you just described, is that Dollar Shave Club is a D2C company. A lot of our listeners, and a lot of the companies we talk about on this show are B2B or B2D2C, they're not usually direct to consumer. But we do find that a lot of those traditional SaaS companies or B2B SaaS companies are having similar structural issues on their product teams or on their growth teams. So what you're saying about your product and growth team as a D2C company, we hear all the time, "Our product brand team and our UX team aren't communicating enough. Our product marketing and our sales teams aren't communicating enough." And that's everybody's biggest problem it seems, internally is these silos and that's where product gets stuck, whether you're in D2C or B2B.

Tsega Dinka:
Yeah. And you could replace acquisition marketing with sales, right? For a lot of B2B organizations. And ultimately, I think the trend that seems to be happening just generally speaking in the industry, is that there's a move towards just creating a cross-functional growth team, where there is this table that different groups can essentially come to and present their perspectives and ultimately, that group is goaled on a single objective. So it's not about sales meeting their targets or product meeting their engagement goals, et cetera, there's say maybe a number of new customers or the retention of customers. And that's the holistic goal that this team or this group is tasked with. And it really becomes a question of what levers do you want to pull to get to those goals? And those levers could sit with any of those team members.

Meghan:
The majority of our listeners being these SaaS or B2B product professionals. Are there any other learnings that you have from D2C besides this single growth team, eliminating silos? Any other learnings you think could potentially be applied to innovate in the SaaS or B2B space?

Tsega Dinka:
There's not necessarily maybe a direct learning on my part, but something that I'm seeing and hearing and maybe there've been some examples of it in my experience as well, is this idea of product led growth. Where especially for software as a service companies, how do you either compliment or maybe reduce your dependency on sales, by building really, the cues within your actual product to drive growth? Now, a good example that seen and read about is, free trial that gets you to use the product and then you experienced the value and you become a paid user of that product, that's completely facilitated by the product itself. And one of the ways that happened for us was through a referral program, basically using social and email channels and allowing existing subscribers to effectively send a discount code to their friends and family, to get them in the door.

Tsega Dinka:
That's when you look at the cost of that approach and what that costs to acquire a customer, versus say to run an ad on Facebook or Instagram, I mean, it's night and day, right? So a program like that, a referral program in a lot of ways, it drives itself. You may need to experiment to understand at what point in the consumer's journey, do you want to present the program or build awareness? And what is that right incentive, both for the person receiving the referral, as well as the person sending the referral? There's usually terms around give, a get, and a give/get, where you, as a person inviting someone might get something in return and they get something on the way in.

Tsega Dinka:
So I think there's ways to tune it that way, but once you have that set up, it drives itself, right? You need to monitor and make sure that it's still going. But in a lot of ways, it creates a channel that creates it's own flywheel of growth. So that applies at all businesses and that has been a big part of the acquisition model at Dollar Shave Club over the years. And even the trial based approach for a D2C brand, you apply the same methodologies, but to the physical product that you are selling. So we had a trial that brought you in with an assortment of products at a very reduced price, where there was very little risk for you to be able to try those products and if you liked them, you became a subscriber. Physical product, digital product, a lot of these same lessons can apply.

Meghan:
In the spirit of better product, how do you innovate within the D2C market? How do you keep experiences fresh for your customers?

Tsega Dinka:
That is the million dollar question, right? I think there's some of the core principles of product management that you have to continue applying, especially when it comes to discovery, right? You have to talk to your customers, you have to understand what they're looking for and whether or not they're getting that from your product. You have to stay close to your customer support team and hear what pain points your customers are experiencing. You also have to be aware of what's happening in the industry and what I always try to remind myself as I try to branch out and not only look at other D2C brands, but look at SaaS and B2B and gaming companies, because ultimately whatever the end product is, the engagement mechanics, the conversion mechanics can apply across industries. And the more you broaden your inputs that way, the higher chances are that you will come across something that may not have yet been brought over to your particular industry, that may be very applicable.

Meghan:
I know you mentioned product led growth, but besides that, is there something else that you learned from SaaS or from B2B that you tested or tried to apply to D2C?

Tsega Dinka:
It's a great question. Not necessarily B2B or D2C specific lesson. One of the things that I've always wanted to have prioritized as a product manager and as a product leader, is to even within the company to get really deep with different groups within the business, to understand holistically how the business operates. Most recently prior to my head of product role, I was in an operational role where it was still within the digital team, but it was hybrid chief of staff type of role to the chief digital officer, but also one where there was a strong cross-functional component, not outside of the digital group, where I really got to spend time with the supply chain teams and the warehouse operation teams and legal and finance.

Tsega Dinka:
And in engaging with those groups, what is really interesting, is that ultimately there are certain challenges or opportunities that sit within those groups where in most cases, product may not be visible to and starting to really get deep and starting to engage with these groups, what was really awesome was that to bring the product and technology perspective and to help think through and solve problems of those themes was really a great experience. And one example, actually this is an interesting one, around abuse, where we were seeing essentially, as we were running different promotions, that there would be subsets of customers that would come in, take that promotion and immediately within the same day, cancel their account. Effectively, they're utilizing a loophole where the promotion ultimately is there to drive trial and ultimately get someone to stick around and purchase your products. And financially, this group that would engage in that come in and take the trial and cancel on the same day behavior, were not delivering any value, was actually delivering a loss per customer.

Tsega Dinka:
As we started to think through how to mitigate that, a big part of it was working with the warehouse team and coming up with ways to effectually between product technology and operations, to have the orders that were going out the door isolated so that if you're an existing subscriber, your orders go to a certain part of the warehouse and those get processed right away. If you signed up new that day, those orders would go to another part of the warehouse and we would essentially allow ourselves five to six hours to monitor who are the people who are abusing the system and who are the people who are actually utilizing the trial as it's intended. And for those people who were abusing the system, we would effectively cancel that order. We would reach out to them and say, "Hey, it doesn't seem like this trial was right for you." And we'd refund them. And ultimately, not ship that product out, because there wasn't any value in us doing that.

Tsega Dinka:
So that required a great deal of coordination and collaboration with the warehouse team, understanding what time in the day do orders drop to the warehouse and what time of the day our orders being picked up by the shipment carrier and facilitating essentially, different ways to work around some of the established systems that were in place. So that to me is a good example of product and technology, finding ways to improve business performance, to improve and to address abuse and fraud outside of the traditional customer experience digital product approach.

Meghan:
Yeah, that's great. So again, cross-functional communication, for sure.

Tsega Dinka:
A hundred percent. And really just being open to learning what is the driving force across different functions and being able to listen and come in, just with lots of curiosity and collaboration at it's heart.

Meghan:
I love all this talk about product. I'm going to pivot us a little bit to some more fun questions. So I think that you've touched on this at the beginning, where the Dollar Shave Club released that original video, that ad that everybody freaked out about, it was super lovable, funny ad and that's what got you interested in their team. How do the core values and the brand promise of Dollar Shave Club influence product decisions? I know that there's, and correct me if I'm wrong, a no BS policy at the company. So how does that culture influence product?

Tsega Dinka:
That's a great question. And it's something that has been core to every function since the beginning. So examples of how the brand influences product, from an experience standpoint, no BS means really from the language you're using in the product pages or the checkout experience to really how easy you make it for the customer to be able to cancel if they wanted to. And even from a customer support perspective, right? The tone and the language that the customer support team is using, and the approach that they take around dissatisfied customers and policies around refunds et cetera. All of these ways that the entire organization operated was rooted in this idea of what the Dollar Shave Club brand stood for.

Tsega Dinka:
And most recently too, one of the brand mottoes or slogans was the most exclusive club. And so really what that aimed to communicate was this idea that Dollar Shave Club is not for any specific type of consumer. From a gender perspective, we have a lot of females that use our product, wanted to communicate that, but also from race and ethnicity perspective as well, there is really a drive to make sure that everyone felt like they belong there. And with that in mind, in a very simplistic way, some of the imagery we would use and some of the models we would use in our ads and even on the product pages and product detail pages, et cetera, represented that diversity.

Meghan:
But it is still a club and that's that exclusivity piece I think you're talking about, where it's a very clever brand trick where you want people to feel like they are part of an exclusive community.

Tsega Dinka:
A hundred percent. Especially when you don't have any requirements around commitment or membership fees. Those are some of the other aspects of really the language that we wanted to make sure it was clear from the beginning. It was no BS and it's about convenience, it was about value and it was about no BS, no commitments, you can leave any time.

Meghan:
What would you say is your favorite part, or was your favorite part of working at a direct to consumer company, on a direct to consumer brand?

Tsega Dinka:
I think especially, for a Dollar Shave Club, because there was such a deal of love for the brand and such a strong value proposition that the audience resonated with, or it resonated with the audience, that for several years, it didn't seem like you as a product person, you could do any wrong. You still had to, especially with what we just talked about, rooting every decision and every experience that you build through the lens of that brand promise. It seemed like any and everything that we would do, seemed to just add more fuel to the fire and just get received really well by our subscribers. So that just made things a lot easier from a product perspective.

Meghan:
And I assume, especially because you all were early to market too, so then once competitors start popping up, then it's, "Okay, maybe we need to be a little bit more thoughtful about decisions now that we have all this competition coming in."

Tsega Dinka:
True. And there was thought even early on, but as competitors started to come on, there was the question of, "Okay, what makes us different?" Right? "What do we stand for?" Those things needed to really be reinforced. And that was an important threshold we had to cross, as we started to see similar brands going after the same audiences. And ultimately again, we stayed true to some of the original brand promises and that really helped shape the decisions that we would make, even as we started to see what competitors were doing.

Meghan:
So as you started to notice these competitors you stuck to your north star, maybe stress tested it a little bit to make sure it still should be your north star and then when it worked, he just kept going.

Tsega Dinka:
Absolutely. And I believe you can't be blind to your competitors, you have to be aware of what they're doing. But I think if you end up focusing too much on what they are doing, then you start to really lose focus on what differentiates you. So you have to really believe and stand behind your differentiators and almost double down on them and do it thoughtfully and make sure you're heading in the right direction, but you have to be original and you have to stick to what got you to that point.

Speaker 3:
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