Know How to Hold 'Em

Building an online community can pull customers onto your website--and keep them there.
Magazine Contributor
2 min read

This story appears in the August 2008 issue of Entrepreneur. Subscribe »

Joey Shamah didn't set out to create a social network for cosmetics enthusiasts. But after introducing a beauty blog and other community features on his cosmetics website (eyeslipsface.com) in June 2007, e-commerce sales leapt 50 percent, and the length of customer visits tripled.

Shamah, 27, has a vested interest in beauty. His $20 million company, Eyes, Lips, Face Cosmetics (e.l.f. for short), sells oodles of eyeliners, lipsticks, glosses and other makeup under its brand. About half those sales are generated through the website, and many of the items go for about $1 each.

At that price point, margins are slim and e.l.f. can't afford the celebrity-endorsement marketing embraced by cosmetics giants, says Shamah, who founded his New York City business four years ago. So he looks to everyday makeup wearers to create brand buzz. For example, you can earn gift certificates for making web referrals that turn into sales transactions.

But that wasn't enough for Shamah, so he launched Ask Achelle, a gossipy blog and advice column that variously touts new products (not just those sold by e.l.f.) and dishes about celebrity sightings and style tips. Shamah says e.l.f. has seen two traffic metrics change dramatically since the blog's introduction: The length of the average visit has increased from four minutes to 13 minutes, and 58 percent of visitors now come to the site directly.

"We bumped into Web 2.0 accidentally," Shamah says. "We were revising our site and looked at what it could do. When we saw what a blog meant in terms of customer interaction, we said, 'Let's take it up a notch.'"

Along with Ask Achelle, e.l.f. has created a section where customers can enter information about their complexion and receive product recommendations. There's also an ongoing wish list, which e.l.f. will link to Facebook accounts. These features not only build customer goodwill, but also allow e.l.f. to test new products and colors and manage inventory more effectively.

Heather Clancy, a freelance journalist and consultant, has been covering the high-tech industry for close to 20 years. She can be reached at hccollins@mac.com.

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