June 23, 2012
The latest entrant into this space is KLUTCHclub, a health and wellness focused delivery service. Starting at $16 per box, the Chicago-based startup offers Saavy-Boheme African Black Hand Soap, Yu-Be Moisturizing Skin Cream, Yoga Download classes – as just 3 examples.
Tech Cocktail caught up with KLUTCHclub founder and CEO Julie Bashkin to learn more about the inner workings of her startup.
Tech Cocktail: What was the inspiration behind KLUTCHclub?
Julie Bashkin: The inspiration behind KLUTCHclub was personal health struggles plus market forces that I noticed were causing a disconnect between consumers who wanted healthy products and the companies producing the products.
I had a personal passion for health and wellness as a result of weight and health struggles in my mid-twenties, and a constant quest for healthy products to aid in maintaining my fitness level while on the road every week as a strategy and innovation consultant to Fortune 500 consumer packaged goods and retail clients.
I noticed that many companies had great products but struggled with effective multi-channel marketing. I also noticed a very early subscription model trend popping up that I thought was very applicable to the consumer struggle with health products but with a slight twist- I was not as concerned with “fun and surprise product discoveries” and was more concerned with helping people find concrete solutions for their health needs, centered around specific “themes” and “trends” every month, such as “healthy summer entertaining” or “maintaining health while on the go.”
Tech Cocktail: What are a few of your favorite KLUTCHclub items / participating companies?
Bashkin: We love bringing people new products from small “up and coming” companies that they never would have discovered on their own but that can drastically change their lives and improve their health in a seamless, effortless way.
An example was our Barlean’s Organic Oil’s Omega Swirl – a fish oil supplement that tastes like a smoothie. Most people know they should take fish oil but do not want to swallow large capsules that taste terrible. This product is smoothie flavored oil that can be taken on its own or mixed into yogurt, oatmeal, salad dressings, pancake batter, even soups – this is innovative because it drastically changes people’s supplement consumption and even their mindset about it.
Tech Cocktail: In your opinion, why do you think there has been such a recent influx of subscription based delivery services?
Bashkin: In general, subscription-based businesses hit on two very important consumer pain points not solved by traditional e-commerce models:
- Convenience of getting product curated by someone else delivered to your home, and
- Feeling like purchases are not mundane tasks or chores but are instead a gift you made to yourself.
Our business in particular solves those pain points but also solves a more concrete problem: the health and wellness market is very fragmented and most of the companies are niche players with little brand recognition. Consumers are confused, do not want to have to do the research, and do not want to invest time and money trying something that could be a diet fad instead of a really healthy product. We eliminate the risk because even if they try a product they don’t like, they’ve only paid $16-$18 for the whole box to discover new and innovative products, some of which they will like.
Unlike other subscription companies, we are not a “surprise and delight” model – we do not try to cater to “fun trial” – we want people to discover concrete solutions to every day health problems but at the same time we designed our packaging and website to feel like a high-end luxurious and educational experience of investing in yourself.
Tech Cocktail: What has proven to be your most effective customer acquisition strategy?
Bashkin: We approached marketing from the perspective of how can we lower our customer acquisition costs from the standard subscription benchmark of the cost being equivalent to one month of subscription revenue. And we were successful because we thought of scrappy grass roots marketing tactics that would simultaneously benefit us, our customers, our brand partners, and the marketers.
One such tactic was a huge grass-roots blogger marketing campaign. We gave away boxes to hundreds of bloggers for reviews and giveaways – this was low cost to us but it also added value to our brand partners because it gave them product reviews.
Our consumers got to see what was in the box ahead of time and make an informed decision on whether or not the subscription price was worth it. Our bloggers got to increase their audience numbers (their reviews went viral on social media) and we acquired many customers. If your product is good, people are willing to write about it (if it were bad, they would not want to mislead their readers, even if they received it for free).
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