5 Australian founders have leveraged Instagram to build a multi-million dollar, global beauty business
Facebook, Instagram, Twitter, Linkedin. The number of platforms businesses can use to reach an audience is expansive and for many entrepreneurs, confusing.
However when done right, it can be the catalyst for customer acquisition, revenue growth and business expansion.
Instagram as a launching pad
Australian beauty company Frank Body quickly learned how powerful Instagram could be when it launched its first coffee scrub two-and-a-half years ago.
The five founders were faced with an interesting dilemma. They had a body scrub which looked like dirt, smelled like a coffee shop packaged up in a brown paper bag, but made your skin feel incredible. How do you explain all that to someone when you’re a digital beauty company with limited marketing budget?
Frank Body co-founder, director Jess Hatzis, told Xero it was a “huge education process”.
“What we discovered was there was a staleness in the beauty industry. Beauty marketing was either fluffy or scientific. There was a real disconnect between the brands and the consumers. We wanted to cut through all of that,” she said.
“We had this product which kind of looked like dirt in a brown paper bag and decided we had to be really upfront, honest and frank about what this product was.”
And with that Frank Body was born. The group used Instagram to target 16 to 30-year-old females who were health conscious and encouraged them to “be frank” about their experience with the product.
“Given that we were a startup with a pretty limited budget, we didn’t have a lot to put into more traditional forms of advertising,” Hatzis said.
“We saw an opportunity to capitalize on that to talk directly to our customers, rather than trying to get their attention using print magazines or TV commercials.
“Now, I see a lot of brands pop up on social media trying to replicate what they see other brands doing, and that’s where they’re failing. Where the potential lies with social media is to create a really unique tone of voice and an aesthetic that’s unique to their brand. It’s a great platform and you can reach a lot of people, but if you don’t use it properly it’s not really going to work very well.”
Frank Body appears to be executing near perfectly. A big part of their strategy was reliant on customers spreading the word through user generated content. Since launching in 2013 their customers have posted more than 100,000 photos of themselves with the scrub smeared over their bodies.
“They started increasing brand awareness for us and started showing what this product, which looked like dirt, was. We literally built an army of marketers,” Hatzis said
These Instagram empires are growing in number, look at fitness guru Kayla Itsines or artist CJ Hendry. It’s becoming more common for careers and companies to be launched on Instagram.
Frank Body hit $AU15 million in revenue last financial year. Hatzis credits the company’s strong growth rate to having access to an engaged audience, spending a lot of time on messaging so it can capitalize on busy periods like Christmas, and expanding overseas.
Data driving expansion decisions
In the early days, Frank Body ran its entire operation — manufacturing, marketing and distribution — out of Australia. However, after investing time analyzing the data, the founders realized there was a lot of traffic coming from other regions, including the US. Gearing up to viably service these markets proved to be a boon for business.
“Shipping from Australia is like shipping from Mars — it takes so long to get anywhere else in the world,” Hatzis said.
“We still manufacture everything in Australia and freight to our now six distribution centers around the world. That allows us to localize operations.
“Once we did that in America in January 2014, we really saw the business reach a new level. We did six-fold revenue within the first week of localizing our operations there because we could do free shipping and it would arrive in days.”
The actionable insights being drawn from customer origins and spending habits is now driving the future of Frank Body.
“It’s so different from when we started — that’s when we just went with our gut,” Hatzis said.
“We are shifting from customer acquisition to customer retention. Looking at data around purchasing habits, repeat purchases, areas where we get traffic, what sources are driving the most traffic to our websites, which ones are driving the most conversions. We’re using that data to optimize our website for those people.”
Moving in the opposite direction
While many established product companies try to find their place in the online world, Frank Body is doing the exact opposite. Attempting to build its retail and offline presence.
“We were born out of the digital space, and now we’re trying to work out how we fit into the offline world. We’re throwing around a lot of different tangible ideas,” she said.
“You reach a level of saturation online, and there are still a lot of people that like to shop in person, in a store. There’s a huge opportunity to reach an entirely new demographic — particularly an older customer who doesn’t tend to shop online as much, unless it’s for a product that they’ve already tried.”
The challenges of a growing business
As Frank Body expands its product line, hires more people and launches around the world, Hatzis said they have challenges the team never considered, like trademarking issues to manufacturing hurdles.
“It’s really easy to become risk adverse — you all of a sudden have a lot more to lose. The really amazing thing about small startups is that you’re willing to take a lot of risk, and it’s what generally pays off. Trying to continue that is somewhat challenging,” Hatzis said.
With more than 20 employees in its Australian office, Hatzis said she’s noticed her role has shifted from being hands on in the nitty gritty business activities, to more of a managerial role.
“It can be a challenging shift for someone who is more entrepreneurial and wants to do things themselves,” she said.
However, having 5 founders means you have a built-in support group, Hatzis said, adding “I always wonder how solo founders vent. It’s really important to have people to share the amazing successes with and people to talk through the day-to-day difficulties of running a business.”
Maintaining momentum when you have so many different opinions to consider can be difficult, but Hatzis says while having so many people weighing in can slow decisions down, the team has learned how to have more honest and upfront conversations.
