The DTC Marketing Handbook: Benefits, Tactics, and Examples
Working with established retailers definitely has its perks – but if you’re focused on building a strong brand, you don’t need to rely on retailers at all. If you’d rather go it alone, direct-to-consumer (DTC) marketing provides a strong path forward.
DTC brands are exceedingly popular among Millennials, Gen Z, and other audiences who are principled, deal-savvy, and spend plenty of time online. This is because direct-to-consumer products thrive in the open, digital marketplace, instead of being placed next to a competing product on a retailer’s cluttered shelf.
However, enjoying the benefits of direct-to-consumer marketing will require new marketing skills and capabilities that can match or exceed the power of retailers. Let’s dive into the benefits of marketing directly to consumers and uncover how certain DTC brands became an unmitigated success.
What is Direct to Consumer (DTC) Marketing?
Direct to consumer (DTC) marketing is designed for brands that skip traditional distribution channels and sell directly to their customers. In the past, many brands had to rely on retailers in particular to help them sell and distribute their product to the vast majority of consumers. This required brands to sell their products for a deep discount while surrendering some control over their marketing mix.
With the explosive growth of the internet and online shopping, however, DTC marketing started becoming a heavy hitter among consumer packaged goods (CPG) brands. Now, they can cut out the middleman and start targeting, marketing, selling, and distributing directly to their customer, passing on perks like lower prices and a stronger customer relationship.
However, you need a good marketing strategy to inspire customers to seek you out and buy your product, instead of going to a retailer for the sake of convenience. For that reason, marketing – and especially branding – are crucial for DTC marketers.
The Benefits of DTC Marketing
As a DTC brand, your unique positioning will allow you to enjoy benefits that traditional brands can’t quite attain. For example:
- Greater control – DTC brands have complete control over their product and any associated marketing, branding, and distribution activities. There’s no need to worry about being located right next to the competition in your local superstore – you control how your product is positioned.
- Better understand your customer – Don’t let data trickle out into the hands of a retailer. As a DTC marketer, you have troves of first-party data from customers engaging directly with you – just make sure you check it for quality.
- Faster time-to-market – CPG brands often hesitate to quickly bring innovative ideas to market since they need to appeal to internal stakeholders, customers, and retailers. If a DTC brand wants to experiment with a new product, you only need to consider your brand and your customers.
- Better margins – When you don’t need to sell your products to retailers at a discount, you can pocket that extra profit and reinvest it into your product and/or marketing strategy.
10 Tactics to Improve Your DTC Marketing Strategy
DTC brands rely on the power of marketing more than the typical brand. Specifically, top-of-funnel branding activities are crucial to helping them get their product off the ground. From there, they enjoy continued growth. Here are eight tactics that leading direct-to-consumer brands use to make their marketing so impactful.
1. Build Your Brand Identity
DTC brands can’t hope that customers are introduced to their product through great prices at a retail store – if they did, they wouldn’t be a true DTC brand! At the same time, they can’t just list their items for sale online and use pricing strategies to draw customers in. Consumers don’t trust products that can only be found online unless the product is backed by a strong brand – there are simply too many fly-by-night internet sellers.
For that reason, it’s essential to build a strong identity that allows customers to instantly associate your products with something positive. Then, make sure that strong brand identity translates across every channel you’re active on. This will help customers recognize and trust your products with only a glance.
2. Collect and Analyze Marketing Data
It’s essential for DTC brands to know their customers, as they must form closer relationships with customers than similar CPG brands. For that reason, it’s essential to collect and analyze high-quality data from your customers whenever possible.
However, stay vigilant – with cookies quickly disappearing, DTC brands also need to create strong connections with digital marketing platforms and media vendors to collect as much data from marketing activities as possible. This data may be aggregate and lack clear information about a consumer’s identity, but certain marketing performance measurement solutions can take that generalized data and turn it into more specific insights. This will help you learn more about your customers with less data.
3. Be Authentic in Your Actions
In the world of DTC marketing, branding is king – and telling people you stand for certain values only works for so long. You need to be authentic in what you promise customers. This means stating a clear mission, then following through on that mission. This will help customers feel like they’re not just buying a product but working toward a greater goal.
4. Connect Using Social Media
Social media is a powerful tool, especially when it comes to growing and spreading awareness of your brand. Your social media page is your own curated space, where you can share compelling information about your products while also putting yourself in front of a large audience.
It also provides a chance to closely interact with consumers, which is especially critical for DTC brands who rarely – if ever – meet their customers face-to-face. This can give you direct suggestions on how to improve your existing products or give you compelling ideas for new ones. Additionally, if a customer shares one of your brand’s posts, this acts as an implicit endorsement of your brand.
5. Enlist Influencers
As of 2021, the market size for influencer marketing is expected to grow to $13.8 billion. Why? Because when someone follows an influencer, they trust their opinion more than paid advertisement – and maybe they want to be a little bit like them. Pairing with an influencer who already likes your brand or simply embodies your brand values is a great way to grow your audience and your brand equity.
6. Personalize the Shopper’s Experience
Personalization helps DTC brands build closer connections with customers by better curating their products and messaging to a customer’s needs. This is especially imperative for DTC brands because of their primarily online nature – in a digital-first environment, personalization is necessary to stand out from the crowd and make your product the clear choice.
DTC brands need reliable, accurate data to accomplish this, however. Unfortunately, with a cookieless future rapidly approaching, accurate and granular data is in short supply. This throws a wrench in 1:1 personalization. But with a marketing performance measurement solution that provides disaggregation capabilities, you can ensure everyone receives relevant messaging even if your data isn’t precise.
7. Use Email Marketing
DTC brands often rely on digital channels, but many of these channels are “walled gardens.” This means you’re not able to independently verify the veracity of your data, there is less granularity, and you’re ultimately at the mercy of the platform to distribute your message.
However, DTC marketers can take complete ownership over email marketing. If you have a customer’s email address you can reach them directly and collect granular data about how they engaged with your outreach. From there, you can implement that data into your marketing performance measurement platform to help fuel future campaigns, no matter which channel your customers are on.
8. Win Back Lost Customers
Did you know that approximately 69 percent of online shopping carts are abandoned? It’s frustrating to get so close to closing a sale, only for the customer to back out at the last moment. Thankfully, there are ways to win back lost customers.
You could use the information you have about them to send targeted outreach on their preferred channels, showcasing the products they left behind. Combine this with an offer for free shipping or a value-added service, and customers are much more likely to return and complete their purchase.
9. Cultivate Customer Loyalty
Did you know that loyal customers spend 67 percent more than a new customer? Combined with the fact that it costs 5 to 25 times less to retain a customer than acquire a new one, DTC brands should focus on customer loyalty to grow their brand.
There are several impactful ways to cultivate loyalty, including loyalty programs, personalization, upselling, and more. In many cases, however, increasing customer loyalty requires highly targeted messaging. Make sure you have the marketing technology necessary to to collect and vet high-quality data from your customers, then use that data to provide relevant outreach about your brand on a customer’s preferred channels.
10. Don’t Forget to Market Offline
DTC brands thrive online – but scaling up might require you to reach customers that aren’t in your digital bubble. Offline marketing provides the perfect opportunity for this. You could build awareness with new customers by putting posters up at a bus stop or hiring brand representatives to talk to people on the street.
Keep in mind it’s difficult to trace the impact of offline marketing – especially brand awareness techniques – to your overall sales volume. Many brands invest in offline marketing and just have faith that it’s spreading brand awareness. However, if your team needs concrete results, you could invest in a brand optimization tool that can measure and predict the impact of offline and online activities on sales.
Examples of Successful Direct-to-Consumer Brands
Now that we’ve taken a closer look at the tactics that make some DTC brands stand out from the rest, let’s examine how three leading brands put these strategies into play.
Barkbox: Personalization, but for your dog
Barkbox provides an interesting case in personalization and appealing to the end-user. Even though dogs aren’t exactly paying customers, they take their entire marketing strategy from a “dog's eye view.” This creates an interesting approach to personalization that is strong enough to appeal to two different species. While outreach is personalized to the owner’s preferences, the box can be easily customized to meet the dog’s unique needs.
They understand that no two customers – or dogs – are completely alike and select their personalized offerings through direct conversations with customers. They listened to customers to help their gift boxes account for allergies, playstyles, and sizes. This means they send over 120,000 different varieties of boxes every month to ensure each dog gets exactly what they want.
Bombas: Using the power of authenticity
Bombas is one of the most successful D2C brands on the market, and they owe it all to their humble beginnings. When they started a crowdfunding campaign on Indiegogo, they made it clear their mission was to supply unhoused people with quality, comfortable socks. They quickly raised $145,000, proving that customers were receptive to their mission.
However, Bombas didn’t just donate a few thousand socks every year. Instead, they donated one pair of socks for every pair bought, helping bring comfort to people’s lives while making customers feel proud that they made a difference for someone in need. To date, Bombas has donated over 40 million pairs of socks and expanded their socially conscious model to include underwear and t-shirts. Together, all of these products have totaled over $100 million in annual revenue, proving that authenticity is crucial to the recipe for DTC success.
Glossier: Catering to your community
Glossier is an often-studied brand because they have such a strong cult following – something traditional brands have tried and failed to attain for years. So, what makes them so different? It might be their focus on top-of-funnel activities.
Glossier started as a blog designed to help young people find quality beauty products – but unfortunately, none of these qualities were meeting the standards of owner Emily Weiss. Seeing an opportunity, she made her own high-quality products, and spread the word to her audience. Then, she promoted her brand using engaging content and honest conversations, causing them to explode in popularity on social media. They even worked with customers to co-create products!
This DTC brand found success by putting the customer, community, and quality content first. This proves that top-of-funnel branding activities don’t only work, they are fundamental to a strong DTC brand.
Becoming a successful DTC brand requires a strong command over marketing data. Since the majority of your business will be conducted online, you need a marketing performance measurement solution that can compile and analyze marketing data from all of your channels, including walled gardens.
Furthermore, it should have the power to add contextual information about a customer’s behavior and identity to general, aggregate sets of data. This will help you stay relevant even as traditional forms of tracking (like cookies) continue to disappear from the digital marketing landscape.
This will allow you to send highly targeted, relevant outreach to your customers and track their journey across online and offline touchpoints. In the end, a data-driven approach to DTC marketing will help you stay one step ahead of your competitors.
Additional Tips and Resources
- How Cookieless Tracking Will Affect Your Attribution and Analytics Strategy
- Improve Your Marketing Performance with Multi-KPI Optimization
- The Importance of Flexibility in Marketing Analytics