Co-Founder/CEO of Vujà Dé Digital, on a mission for conscious capitalism and reinventing the media agency model.
As brick-and-mortar retail has winnowed to bare existence, direct-to-consumer (DTC) marketing is emerging as both a need and an opportunity. Consumer shopping behaviors have shifted as the quarantine and stay-at-home orders have stretched from weeks to months.
The reduction of access to retail shopping along with consumer hesitancy has forced brands to explore new methods to reach consumers relying on and leveraging the internet to extend their reach. DTC marketing strategies are becoming a pre-emptive move against potential future market disruption, as well as a real-time need for revenue generation.
However, successful DTC marketing requires more than throwing money at advertising to see what sticks. The following points are crucial to a successful DTC marketing strategy.
1. You have to consider the complete path to purchase.
The thought that “if you advertise it, they will buy,” is false. A good DTC campaign accounts for all of the variables that impact effectiveness. These include decisions around what channels to run ads on, which ads to run, what bids to apply and all other variables relevant to an effective campaign.
Other factors that must be considered include nonmedia variables such as creative, offer, user journey, site experience, public relations, seasonality, competitors, etc. Paid media can boost a good product or brand when a good foundation is already built, but it can rarely, if ever, launch or grow something on its own. Simply putting Facebook ads in-market for something people have never heard of is not likely to yield good DTC sales returns.
2. It takes time and effort to ramp up.
It’s much easier to grow from $1 million to $2 million in sales than to go from zero dollars to $1 million. Getting up that initial hill can be tough and expensive. Unless you get lucky with a product placement in a major film or you make it onto Oprah’s favorite things, you have to pay and work to get your baseline momentum built.
You have to account for a full funnel of influence, which means buying awareness, consideration and then ultimately conversion. Thinking you can go straight to the bottom of the funnel and invest in conversion is naïve. If there’s nothing filling the top of the funnel, there is no low-hanging fruit to pick.
3. Think it through, and validate your winning formula.
A good piece of advice for DTC marketers and brand marketers, in general, is that a good marketing partner won’t just take marketing dollars and throw them against the wall to see what sticks. They will approach an engagement strategically, thinking about the short- and long-term factors to help their client build a business, not just sell products. Anyone who just says yes and runs some paid search and social ads is taking a risk. They’re gambling with that budget, hoping that they get lucky and that people respond to the initial ads to justify the spend.
Some people get lucky, and a few products are compelling enough that they hit that lottery, but most people will waste a lot of money chasing their market position. If you work with a partner who thinks through all of this before spending your budget, you can increase your likelihood of success, and set yourself up for longer-term success by discovering the right DTC marketing formula.
4. Know the territory your brand or product is entering.
Understand the space you’re entering. Often brands or companies have ideas to launch products in already extremely crowded market spaces with established brands that already dominate the space. They think they’re going to carve out a niche in the market with minimal test budgets and slowly scale their way up.
Unless you’ve identified a new market niche with limited competition or you’re offering something wildly unique, it’s challenging and expensive to carve out market share from established brands or products. Brands need to be realistic about what they’re getting into and what it will take to compete.
5. Understand, and be realistic about, the existing demand for your product.
Companies and brands need to be realistic about the existing demand for their product. If it’s new, it’s going to cost money to create awareness and demand for the product. It’s common for brands to say things like, “People don’t even know they have this problem yet,” as though it’s a good thing.
We have to remind them if people don’t realize they have a problem, then they aren’t looking for a solution. This means that they’ll have to pay to make people aware of the problem and then invest more media dollars to make people consider their product as the solution. If market demand doesn’t already exist or is low, the cost of launching and growing needs to be fully understood.
6. Don’t fall into the trap of thinking that you’re ‘so much better’ than the competition.
Finally, it’s easy to overestimate the “problems” with a competitor’s DTC brand. A new market entrant may see an established brand and think that they offer something exponentially better. The problem is, if the established brand has embedded happy customers, it means most of them don’t care or aren’t aware of the need for a better solution.
It costs money to tell this story and create awareness that a better solution exists for a problem that consumers weren’t aware of. Once they’re aware of a superior solution, you then also have to convince them to switch brands and companies.
Challenges exist, and acquisition costs for DTC marketing strategies can tend to be high. However, if retail doesn’t return to its pre-quarantine levels in the near term, brands will want to consider developing a successful, sustainable DTC marketing strategy. One silver lining of the pandemic for brands and marketers may be the opportunity to strategize and win back retail revenue through successful DTC sales.
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Author: Todd Juneau, Forbes Councils Member