Direct-to-consumer (DTC) brands are experiencing unparalleled opportunity, with more people buying online than ever before. But, of course, with that opportunity comes new challenges that go well beyond managing a widespread supply chain. In an increasingly crowded online marketplace, brands often struggle to stand out in a way that allows them to achieve meaningful growth.
Growing brands in the digital space don’t leave customer acquisition and retention to chance. But, as I learned during a recent conversation with Lucas DiPietrantonio, co-founder and CEO of Darkroom, there are essential, intentional choices that most successful DTC brands use to make a big impact on the market.
1. Emphasize Retention Above All Else
The oft-repeated advice that it is less expensive to retain existing customers than to acquire new customers is just as accurate for DTC brands as for more “traditional” businesses.
For one thing, it is much easier to sell to an existing customer than to a new customer. For example, research indicates that while businesses have a 60 to 70 percent chance of successfully selling to an existing customer, that likelihood drops to five to 20 percent for new customers.
As such, retention marketing should be at the forefront of DTC growth.
But DiPietrantonio notes that not all retention efforts are created equal: “Establishing the right modes of communication allows you to build strong buyer relationships. When you can have more nuanced methods of outreach to your current customers through direct channels like email or SMS marketing, you’re far more likely to get repeat sales. It’s all about creating a relationship that feels authentic, rather than simply copying the DTC retention playbook and setting up some automations. That won’t get you to your quarterly sales numbers anymore.”
Continued DiPietrantonio, “Determining the right channel, tone, content and cadence will determine how effective the retention channels will be. Standing out in authentic ways, above all else, is what matters.”
2. Understand the Importance of Branding
According to DiPietrantonio, strong branding is foundational for any DTC brand.
“Every customer touchpoint needs to be strong, whether they’re seeing one of your ads for the first time, visiting your website or opening a package. These may seem like little things, but each of them communicates your brand identity and can have considerable lift on your advertising campaigns. Beyond even paid advertising campaigns, your packaging and identity can be your biggest asset,” says DiPietrantonio.
“You can see the importance of this with brands like Haus and VYBES, both consumer-packaged-goods (CPG) brands that are virtually marketed by their packaging. If you see a VYBES of Haus beverage in an ad, you automatically know what it’s about. That’s brand recognition that goes a long way. This is why these founders are succeeding.”
To capitalize on this, DiPietrantonio and his agency make brand identity the initial focus of working with a client. Developing a strong and clear brand feeds into future decisions regarding ongoing growth initiatives.
When all customer-facing decisions are made with the brand identity as a guide, it becomes easier for DTC companies to provide consistent and memorable experiences that help them stand out in the consumer’s mind.
3. Lean On Products That Can Be Purchased Time and Time Again
With repeat customers being such an important source of growth and revenue, DiPietrantonio has a key piece of advice for DTC brands: focus on products that can (and should) be purchased over and over again, rather than a one-time purchase.
“To maximize revenue, you need to look at ways to increase lifetime value (LTV),” he explains.
“When you sell high-velocity products or those that customers will purchase repeatedly, but still products that generally have a self-sustaining average order value (AOV), you are setting yourself up for success. This is especially important to figure out when you’re just starting out.”
This focus on maximizing customer value is part of the reason behind the rise of subscription boxes and other recurring revenue-driving DTC initiatives. In addition, creating a reliable source of monthly revenue from your customers provides a strong foundation for future growth.
4. Make Marketing Your Secret Weapon
We live in an age when outsourcing and delegation have become more commonplace and widely accepted than ever before. For DTC brands, marketing is one area they can either live or die by.
Assembling the right team that understands your brand is essential.
“I’ve seen so many DTC companies come to our agency that have amazing products, but they don’t have the skills or know-how to position themselves in a crowded niche. What ultimately separates successful brand-founders from the rest is the ability to recognize what’s important, but to also have the humility to understand what the founding team’s limitations are. Founders who are serious about achieving scale need to be diligent in selecting a partner. You need to make marketing your secret weapon,” says DiPietrantonio.
“That’s how you grow, beat out the competition and drive customer interactions with your brand. DTC success is defined as a healthy combination between a great product or idea, founding team, financial model and brilliant marketing execution. That combination of insightful marketing and an amazing product is what makes or breaks a brand in the end.”
Rapid, Reliable E-Commerce Growth Is On the Way
DTC brands will be far better positioned to reach customers by implementing these strategies — and even more importantly, get them to see the world from their angle.
For DiPietrantonio and Darkroom, these are practices implemented every day.