Here are 7 strategic ways of increasing your beauty brand’s revenues and profitability without breaking the bank or being subject to the vagaries of 3rd party media and channels.
Times are tough; social media has become very expensive as algorithms change. In today’s tough climate, beauty brands need multiple strategic ways of increasing sales and profits rather than depending on a media/channel they have no control over.
1. PRO CHANNELS
Benefits
-Education and high-involvement channel
-High-volume channel
-Prefers specialty beauty brands
-Free marketing for you
-Will up your DTC & any retail channel sales
How?
-Joint business development strategy
-Best fit channels
Example
Olaplex, a haircare brand renowned for its innovative products, started its distribution by initially targeting professional hair salons, succeeding with the channel, creating demand and then going to retail.
Another example is a Jump Partner brand, Code of Harmony, which worked with estheticians across the USA to generate highly profitable sales and create demand for its products, resulting in a big jump in its DTC sales.
2. SEED COMMUNITIES AND GROUPS
This strategy helps if you are a fit with an identifiable group of consumers, instead of 1:1 like DTC, and has the potential to spread the word like wildfire.
Benefits
-High margin and fast sales in bulk
-Potential to create concentrated word-of-mouth
-Feedback on word of mouth, trial, adoption and referral, all with one initiative
How?
-Identify the most motivated potential super fans
-Find out where they roam and gather
-Seed them for conversion, loyalty and referral, all in one step
Example
3. BRAND PARTNERSHIPS
Partnerships help boost immediate sales profits without diluting long-term interests with a high conversion rate and on-brand marketing.
Benefits
-Helps both short-term and long-term profitability
-High potential for loyalty
-Leverage with beauty/category stakeholders like media, influencers, retailers, vendors etc.
How?
-Non-conflict category
-Consumer persona match or evolution
-Friendship amongst equals
Example
Fenty Beauty, Rihanna’s cosmetics brand, partnered with Heytea, one of China’s most renowned tea shops, to introduce their latest Cheeks Out cream blush collection.
This collaboration was accessible to devoted fans through a lottery system on Weibo, China’s second-largest social media platform. Winners won an exclusive Fenty Beauty makeup bag and a complimentary beverage voucher for Heytea.
Elf Beauty partnered with American Eagle Outfitters on a makeup and skincare line of products to target Gen Z consumers and was reportedly highly profitable.
4. 6x PROFIT SUPER FAN BRAND AMBASSADORS
You already have them as your super fan consumers, and they are more than willing to spread your word and convert new consumers for you!
Benefits
-Very high potential for super-effective advocacy
-Saves $ spend on influencers and media
-Faster conversion with potential for high loyalty
-No need to outreach, search or pitch
How?
-Identify your current 6x profitable super fans
-Find & leverage
-Breakthrough ambassador program for advocacy
Example
Suntouched, a Jump Partner brand, has a cutting-edge ambassador program that helps you embark on an exciting journey of self-discovery, inspiration, and rewards. The program has started to become a significant source of acquisition.
5. ADVOCACY
The best consumer acquisition strategy is to acquire the right consumers who are most likely to stay loyal and become advocates in return
Benefits
-Reduces dependence on paid media
-Ultimate test of your brand promise and experience
-Feeds the funnel back for a virtuous cycle of profitability
How?
-Create a conversation catalyst
-Apply to every touch point
-Experiment, iterate and create a wildfire
Example
Vacation Inc. has a vibe generator player on its home page. When you click Menu, you’ll see beach music that you can customize. I’d recommend adding social icons so it’s shareable and then using it to create a funnel for new consumer acquisition.
6. REWARDS
Again, this is an extremely potent way to increase short-term cash and profitability aligned with long-term strategy.
Benefits
-Identify potential super fans
-Segment fans and super fans
-Great leeway to boost sales instantly & continuously with super fans
How?
-Emotional rewards program
-Tiered benefits
-Perceived high-value promos
Example
The Indie Lee rewards program expresses gratitude and recognition to its members through personalized thank-you notes, birthday gifts, and anniversary surprises.
7. CASH & PROFITS
Cash is the fuel, and profit is the ultimate goal for a venture
Benefits
-Ability to meet recurring expenses to support business growth
-Ability to invest in your growth
-Support from all external sources of funding
How?
-Improve cash flow for all cash conversion cycles
-Up profitability of loyal consumers
-Up your loyalty %
Example
Type: A models out their cash flow for the coming 13 weeks to be ahead of their Accounts Receivables and Payables, impacting their projections and profitability.
A Jump partner brand studied its cash conversion cycles for all initiatives and then took simple measures such as negotiating rates & percentages with vendors and better forecasting to optimize inventory, resulting in a 15% increase in cash flow, not to mention started reviewing the daily cash flow report.
SUMMARY
I covered 7 strategic ways to immediately increase your cash and profit without compromising your beauty brand’s long-term prospects.
1.Pro Channels-If your brand has an alignment with a PRO channel like Spas, salons, clinics, travel, lifestyle, pet stores, studios & many others, then it’s a great way to increase your sales & profitability in bulk, build demand, and help your DTC and retail channel profits.
2. Seed Communities & Groups-Identify, find and leverage a self-identifiable and close-knit community for a high margin-volume DTC sales, with the potential to create word of mouth.
3.Brand Partnerships-Choose non-conflict categories to partner with brands that are a fit with your target consumer persona or a logical evolution of the same for immediate, bulk sales and profitability.
4.6X Profitable Super Fan Ambassadors—You can choose from your most loyal consumers. With minimal hassle, you can find more inside and outside to be a part of your ahead-of-the-curve and on-brand ambassador program to create super-effective advocacy.
5. Advocacy-Create a conversation catalyst and apply it to every touch point and try to make it spread like wildfire with every consumer interaction as the fuel
6. Emotionally Transformed Rewards-Design a segmented and tiered rewards program with emotional benefits for instant and continuous boost in sales.
7. Cash & Profits-Look at all of your cash conversion cycles and create a step-by-step implementation checklist to reduce the cash conversion period, for example. Similarly, break down your loyal consumers into different tiers for both DTC and retail, and move consumers from each stage of loyalty into the next.
Do check out my article on How to Go Viral?
Jump accelerates women-led, early-stage beauty brands with a fit & full, executable solution using first principles of diffusion