The rising popularity of DTC (Direct to Consumer or D2C) marketing is impossible to ignore. Even before the COVID-19 pandemic, both small and large brands were trying to cut out the intermediary and establish a direct connection with their consumers.
With the entire customer journey under your control, it's much easier to achieve the desired conversion and retention goals. Meanwhile, the DTC approach cuts costs and provides valuable insight to adjust your sales and marketing efforts, which can be tracked with a subscription reporting platform for sales and marketing.
By adopting the right DTC marketing tactics and following the latest trends, it's possible to streamline your strategy and boost the company's profitability.
What is direct to consumer (DTC) marketing?
DTC marketing involves a brand reaching out to the consumer directly instead of using an intermediary's services. Brands that don't adopt DTC strategies take advantage of middlemen to market and sell their products.
By taking advantage of DTC marketing, a brand controls the consumer's complete path, from awareness to purchase and further to loyalty. When the middleman is absent, the consumer's journey down the sales funnel is often faster. Meanwhile, the data gathered along this journey has tremendous value for future retention tactics.
D2C marketing is constantly evolving. It's imperative to stay on top of the latest trends to outrun the competition.
Direct to consumer & COVID-19: A trend that's here to stay
Brands that adopted the DTC approach before the pandemic had a much easier time surviving the COVID-related chaos. Only about 22% of DTC brands reported sales declines compared to 80% of the competition.
DTC brands have a strong digital infrastructure that allows them to keep selling while retail stores are closing and retailers are counting losses. During the pandemic, consumers learned how advantageous it can be to work with DTC brands. Once it's over, they are unlikely to go back to less convenient options.
Learnings from winning DTC brands
Marketing directly to consumers involves extensive research and a high degree of creativity. While following the latest DTC trends is imperative to building a successful strategy, learning from winning DTC brands can provide much-needed inspiration.
Here are a few examples of successful DTC marketing:
Dollar Shave Club
DTC marketing turned Dollar Shave Club into Billion Dollar Shave Club. This brand took advantage of great storytelling to connect with the consumer and made a unique offering. The CEO, Michael Dubin, decided to cut out the middleman to save money. The result is a billion-dollar business.
At first, only a few people believed that selling eyeglasses directly to consumers online would work. The idea to let people try eyeglasses at home for free nullified the worries consumers had about dealing with ill-fitting glasses and struggling with returns.
Warby Parker founders studied the target audience closely and addressed all pain points to create a $1.75 billion company.
Casper founders wanted their startup to become the "Warby Parker of mattresses" and succeeded.
Buying a mattress is a time-consuming and tedious task that involves long hours at a furniture store and complex delivery arrangements.
Casper used DTC content and social media marketing tactics to convince consumers that they had a perfect mattress for everyone while addressing the pain points of monotonous choosing and complicated delivery. Consumers could try the mattress at home and return it within 3 months at any time for free.
Glossier founders did a tremendous job making the consumers love their brand. The company capitalized on influencer marketing to sell products at lower prices than their competitors and stand out from the beauty industry crowd.
The goal was to connect with consumers on a personal level through influencers and encourage word-of-mouth marketing. Meanwhile, the company employed a robust content marketing strategy to build a community of avid followers.
Top 10 DTC marketing strategies
Effective DTC marketing tactics vary depending on your goals, budget, and previous marketing efforts. Whether you are just starting out or planning to adopt a DTC approach, these tactics can give you a good start.
1. Build a memorable brand personality
Uniqueness and creativity are keys to a memorable brand identity. So are a great name, an appealing logo, well-chosen colors, and consistency.
Besides trying to come up with something special, you need to research your target audience and figure out which brand personality can help you make a memorable connection.
2. Highlight existing customer experiences
User-generated content (UGC) is one of the most impressive DTC marketing tools. By focusing on creating a highly personalized experience for each new customer, you encourage them to share this experience with others.
One of the tactics is to allow customers to test new products and then share their experience on social media before committing to a purchase.
3. Personalize email messaging by segment
Creating personalized offers is the key to successful email marketing in the DTC sector. By dividing your audience into segments, you can design a highly personalized message that addresses a particular segment's needs and pain points. Personalization software can make this a scalable, automated process.
For example, after a consumer purchases a subscription, you can send an email that promotes supporting products or services.
4. Connect with your audience on social media
Social media allows you to get as close to the target audience as possible. Besides sharing high-quality content and building a following, you can take advantage of influencers (like Glossier did).
With almost half the world's population using social media, social media marketing helps you connect with many segments of your target audience.
5. Partner with influencers to leverage social proof
According to Nielsen, 92% of consumers trust recommendations from people they know more than advertising. Consumers believe influencer content to be more authentic than content generated directly by brands.
That's where influencer marketing comes in. By collaborating with influencers to promote your brand, you aren't just getting close to the target audience, you are doubling your chances of conversions.
6. Test direct mail with your digital marketing campaigns
DTC marketing involves reaching out to the consumer across a variety of channels. Contrary to the popular belief, direct mail marketing isn't dead. In fact, it has a 29% ROI, which is higher than PPC marketing ROI.
Direct mail is a highly personal channel, which satisfies the consumer's craving to hold something tangible (especially during the pandemic).
7. Experiment with offline marketing campaigns
Just like direct mail, traditional marketing tactics are still effective. They do an excellent job complementing your digital efforts. Consider taking advantage of billboards, subway ads, television and radio ads, and pamphlets. These tactics contribute to the omnichannel experience that consumers value.
8. Get noticed with viral marketing campaigns
Viral marketing campaigns like Old Spice's "The Man Your Man Could Smell Like" or ALS Ice Bucket Channel get a tremendous amount of attention, spiking brand awareness and retention. While you never know which campaign will go viral, it's important to streamline creativity and keep trying.
9. Create memorable and compelling online ads
The pillar of DTC marketing is brand awareness. Building brand awareness is a continuous process that nurtures new and existing customer loyalty.
Take full advantage of paid search and display ads to get your name out there. If you are just starting out, a PPC campaign can help you reach out to a more targeted demographic, generate valuable leads, and make your brand name recognizable.
10. Collect and Analyze Feedback
Since the key to DTC marketing is a closer relationship with consumers, learning what they think can provide valuable insights into your marketing efforts. Meanwhile, acting on feedback can help you build customer loyalty.
Knowing your DTC business metrics is key
Identifying direct-to-consumer metrics for your business is imperative for measuring and analyzing your campaign. These metrics include:
- Customer LTV (Lifetime Value)
- Conversion rate
- Average Order Value (AOV)
- Churn Rate
- Customer Acquisition Cost (CAC)
- Monthly Recurring Revenue (MRR)
- Product margin
- Net Promoter Score (NPS)
- Net Revenue Retention
By keeping the above metrics on your radar at all times, you can streamline your marketing efforts, build momentum, and stay ahead of the competition.
DTC marketing FAQs
What does DTC marketing mean?
DTC marketing means promoting and selling your products directly to the consumer instead of doing it through third parties. It involves following the consumer through the entire buyer's journey, nurturing the relationship in the process.
What is the difference between DTC and B2C marketing?
DTC marketing involves promoting and selling products directly to buyers online through e-commerce platforms and company websites. Meanwhile, BTC companies tend to sell through intermediaries like brick-and-mortar stores and websites like Amazon. During the pandemic, the line between DTC and B2C is blurring since the majority of B2C companies are starting to adopt the DTC model to survive.
How to conduct a DTC marketing assessment?
To conduct an effective DTC marketing assessment, you need to evaluate all your marketing channels and assets with direct-to-consumer strategy in mind. Marketers can also review the ROI and budget of their existing strategy to figure out which areas need improvement.
How to build a DTC brand?
To build a DTC brand, you need to come up with a product that addresses the consumer's pain points, do market analysis, create a business plan, find financing, and start building brand awareness. When choosing a marketing strategy for your DTC brand, make sure to keep personalization and strong consumer relationships in mind.