Photo Credits: Scentbird
Scentbird is a monthly service that inspires fragrance lovers to go beyond the ordinary and sample scents that evoke passion, confidence and excitement. The frustration of expensive designer perfume bottles collecting dust on cabinets or dresser, what was referred to as “Perfume graveyard” was what drove the beginning of Scentbird. Scentbird aimed at providing an alternative, which was meant to be both practical and exciting.
Ever since its launch, Scentbird has experienced changes, growth and development mostly in terms of trying to be a service to many people and at the same time trying to grow their sales.
While it is fascinating how a brand, more so a perfume brand can manage to grow at a fast rate into a million dollar brand without investment, Scentbird defied the odds and rocketed its growth within years after its launch. This case study, therefore, aims to dig deep and find out how Scentbird managed to grow from zero to a million-dollar brand with zero marketing budget.
Back in September 2014 after its inauguration, the organization was looking at a speedy way to grow their subscriber base. Luckily the co-founder and CEO of Scentbird Mr. Sergey Gusev found a video on YouTube with a girl having 15,000 followers talking about her favorites products.
Gusev saw an opportunity and realized that this was the platform the company needed. He gave the lady a product for free with the hope that she could review it in her next video.
Things went well for the company as the girl reviewed the product and this resulted in the improvement of sales. The review brought up sales of about 100 product in just two days. For that and being a new startup, that was quite amazing.
Scentbird has managed to grow from 400 subscribers to over 250,000 subscribers across the US illustrating how well the consumers are adopting the product. In the previous year, Scentbird managed to grow by over 110%, and it has expanded their service in providing various product including home fragrance products as well as men, women and a unisex fragrance.
Perfumes can be costly more especially when the signature scent is a designer perfume. Paying up to $400 from unheard ones can scare someone not to try them. While the consumer may want to collect and rotate between the quality scents, it can be costly to buy more than one high-end signature.
Scentbird took the step to fill this void by offering their subscribers over 500 designer fragrances at a monthly cost of $14.95M and that was what changed the game for them as you can see in the image below.
Photo Credits: Scentbird
Strategies Used by Scentbird to Grow into a Million Dollar Brand
Most companies intend to improve their sales and increase their profits through specific series of plans and methods. For Scentbird here are some of the strategies that influenced their growth:
1. Product Expansion
Product expansion is refers to a situation where a company extends the range of the products they offer. Starting as a perfume and makeup subscription service, Scentbird has expanded to providing home and personal care markets.
This enabled the firm to earn more revenue from the sales of their products and also made them reach a new market, offering various range of services. The company gained more popularity as a result.
2. Through a Referral Program
Through advertisement various several platforms the company gained new markets and earned new subscribers. The company has a referral program where new customers can obtain a free month subscription when the subscriber refers their friends to Scentbird. Once their friends sign up for Scentbird subscription service and pay for the first month, then the new subscribers will not be charged for the second month.
The initial Scentbird subscriber who referred their friends will be able to get a free subscription for every new subscriber referred at the beginning of the new month the date in which the new subscriber signed up for Scentbird. When asked by Zendesk about the referral program, Sergey asserted;
If you’re currently an active subscriber, head to our referral page for your unique referral link and to send e-mail invites or share your code on social media for friends and family you think might also love Scentbird. Every time a friend subscribes using your unique referral code, both of you will earn one free month for your Scentbird subscription“
3. Influencer Marketing
It is slow but the best way to grow your sales. This is the strategy Scentbird utilized to get their first 5,000 monthly paying customers and generate $75,000 MRR. This strategy can be used by any online startups regardless of their stage in development.
a) He Began by Searching on YouTube
Sergi Gusev says: “YouTube is the second largest search engine after Google. If you are familiar with Context Advertising, it will be very easy for you. It’s just like searching for relevant keywords.” In his case, he began by searching “perfume reviews” and so many videos related to the keyword showed in the results as shown below.
Photo Credits: YouTube
He then began looking for his substitutes or competitors and in this case, his competitors were “LoveWithFood reviews”, “Ipsy reviews” and “Birchbox reviews”, among many others
Photo Credits: YouTube
He found out so many of influencers who were potentially ready to inform their audience about his product. This is because from Sergey’s point of view, “You know this because they have already reviewed a similar product, or they are obsessed with your industry.”
b) Created a Spreadsheet of Influencers
Sergey realized that the only way he could easily manage his list of influencers, was to create a spreadsheet in which he could add his influencers manually or automatically.
For the manual case, he added his influencers from one to another on a spreadsheet. Sergey confirmed that; “You will need their real name, a link to their channel, their number of followers, links to other social networks and most importantly their email address”
You can check an example of the spreadsheet he was using at the time.
Photo Credits: YouTube
Most of their information you will need as he says, are found on their “About Page” and suppose you do not find them there, there is a possibility that you will get it on their other social media networks.
Photo Credits: Instagram
From my experience around 70% of the bloggers have their email address in the about section. If they don’t, around 50% of the 30% will have their email address mentioned on other social networks like Instagram and Twitter. Btw don’t forget to look at the other networks, because you can always ask them to post a photo of your product on Instagram, Twitter, or even on their blog.”
For the automatic list case, he hired freelancers on Upwork but he warns that this list is of much lower quality because there’s a possibility of getting irrelevant people, what he probably experienced.
c) Other quick hacks
Sergey advises that there are more ways you can create your influencer list quite fast. He names; Hiring interns, Upwork and Mturk as ways you can do that. We will, therefore, try to expound on how to use each of them below.
Hire interns – Sergey says; “Give them a task to find these relevant bloggers for you. At one point we had five interns who were searching for influencers. In total, we had around ten interns whose sole job was to find and reach out to the bloggers.” The interns made their work easy.
Upwork – Once you build a list, automatically or manually, “hire a couple of people on Upwork to add influencers names, emails and so on. I used this method to get the data for about 5,000 influencers. It can take a long time because one or two people will search for this data manually,” Sergey confirmed. There are plenty of freelancers at Upork who ca get the job done for you with affordable payment.
Mturk – Mturk looked like one of the fast ways to go with. Gusev said “This method is very fast,” he confirms. Mturk can process 5,000 influencers in a couple of days. It will be very cheap and fast. I didn’t personally use this method because the chances of fraud were too high, but you can try.” You can follow this link if you do not know how to set up Mturk.
d) Reached out to his Influencers
Once Sergey had a list of influencers in his niche, he started to stretch out and reach out on them. He asserts;
Don’t wait until you have a full list. I have to warn you, most of the influencers won’t reply to your emails. This can be for a wide number of reasons such as they don’t like your product, they haven’t seen your email, your email got to their spam folder, etc. In our case, around 30% of the influencers reply to the first email. Approximately 20%-30% will reply to my second or third email. We still have thousands of bloggers who have never written us back.”
e) Offering Products For Free
The organization was able to earn 3,000 new subscribers as a result of giving a free sample to their influencers and audience. The company did this because they were not in a position of raising money and they only had the product in stock. Through the free samples given, they got good reviews and responses and these greatly helped in getting more sales and subscribers.
Sergi says; “The best way to get a response from the influencer is to write a personal message describing your product”. The first version of their mail looked like the image below
Photo Credits: Scentbird
Sergey went on and suggested that using an email management tool like persistiq helped him build an email sequence that helped in communicating with his influencers and afterward offered them free products in which they found amazingly good.
4. Tracking Sales
Through the tracking of the sales, the organization could see where their products are being consumed more and where their products did not fairly do well. Through this, they could know where to improve their sale and marketing strategy to enable them to gain more sales`
Sergi explained; ”If you don’t follow up with these further steps, you will be surprised once you get your first video. You won’t see sales from YouTube in your Google Analytics, or at least you will find that most of your sales came from Direct or Organic (Google, Bing, Yahoo), and just a small percentage from YouTube.”
Regardless of tracking sales from YouTube being hard, Sergey created;
i) A unique coupon code with a little discount – This encouraged more people to buy Scentbird products and it was an easy way to track the sales they got from each influencer. Sergey confirms; “Our CTO built a system where we can easily create a coupon code, add a name of the influencer, set a % discount and track the number of sales. You can build the same system or create your own.”
Photo Credits: Scentbird
ii) A unique bit.ly link – He added a UTM with the source and influencers name. You can follow this link to see one of the bit.ly links he used. As he asserted; “This way you will see the sales in your analytics.”
iii) He then, contacted his influencer once more but this time asking if it’s possible to place your link above the fold. This helped Scentbird to grow and get more sales as they were able to get as many clicks as possible. Sergey confirms; “If your link is below the fold, most of the traffic to your site will come from Direct or Organic, and you won’t be able to track the performance of your campaign accurately.”
Photo Credits: YouTube
Aside from driving traffic, the links were a huge driver of SEO for your website. Sergi advises that you “ Try to ask the influencer to put the link to your main page and a product page in order to get the most out of it.”
6. Market Expansion
Market expansion is selling a product in a new market. Through the advertisement and the referral programs, the product could surge to new markets, and this enables Scentbird to get more subscribers for their products. The launch of Scentbird Men made the organization sell products to markets that they had not penetrated before and this meant more sales, more subscribers and more profit.
Series A Funding Round
Scentbird managed to raise $18.6 M among the largest Series A funding rounds taking the total investment to 24.4 M. Being a bootstrapped startup company for their first 10 months in the venture, they went to the Entrepreneurs Roundtable Accelerator (ERA) an early-stage venture capital fund and technology accelerator and they gained an investment worth $40,000 from them. The company later raised $5.8 M Seed Round before later raised in the Series A making it among the top-funded in the industry.
Photo Credits: Crunchbase
The money raised through the funding process made them gain financial prowess. With the money, they could be able to come with newer products, and this ensured the sales get better leading to more profits. The profits gained could be shared among the investors and others could be used for expansion of the company productivity hence making it both profitable for both the investors and the founders of the organization.
The Future of Scentbird
Photo Credits: Techcrunch
Initially, the company had less capital for them to expand rapidly, now with a more abundant source of their funding Scentbird is planning to expand their services beyond their original scents.
With other competitors with more significant funding like the Birchbox, there is a need to hold on to subscribers and ensure they are satisfied with the services offered and also ensuring new consumers are attracted to their products.
The company is plotting to expand into the makeup of its own and a unique one. The other plan undergoing is to develop the private labeling of the products as well as offering a broad array of designer perfumes.
The extension commenced in 2017, and the company is including other beauty products like the hand creams and lip balm on its own label. With reasonably broad sources of funding, the firm is aiming towards a limited-time beauty capsule collection.
The capsule is on offer for subscribers at $14.95 and between $23 and $30 for those purchasing la carte. It is infused with 24-karat gold flakes making it an affordable luxury. Lush Gold consisting of body oil, body wash, and lip oil is to be created as limited-time offer making it unique.
The firm is planning to expand the market covered by supplying the various range of their products broadly making it reach every interested consumer of the merchandise.
Starting as a bootstrapped company, Scentbird with determination rose to a million dollar brand. The organization strategically laid plans to ensure they could grow and reach to various market with their products.
With their plans, we can expect the firm to become bigger and attract investors who are willing and able to invest in them so they can move forward as a team. The consumers of these products should expect better as effective plans are being laid out by the firm to ensure their as the value of money in the products provided from their subscription.
Most importantly, you as an online entrepreneur can also follow the strategies used by Scentbird to grow your brand no matter how small their startup is.
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