Episode 3: Being More Direct In a Post-COVID World

The 2020s Will Be the Decade of 'Direct to Consumer'

In terms of modern commerce, the Direct to Consumer (DTC) trend is still relatively new. Generally speaking it began to get serious traction around 2010 where barriers to entry were low and investment dollars focused on headline growth, rather than profitability. Most early DTC brands targeted Gen Z and millennial consumers who were looking to try new brands with a bigger purpose – something they could relate to on a personal level.

The unprecedented events at the start of the 2020s have made it clear that ‘direct to consumer’ will be the centralized theme of this decade.

While almost 2.6% of USA retail will be D2C this year ($17.75bn – IAB/eMarketer), over 65% of us also think that its important brands are committed to making society better (Kantar), so more than ever companies need to take the opportunity to interact with their customers in a positive and direct manner.

A notable side effect of COVID-19 is that it has accelerated the need for businesses of all types to have better direct relationships with their customers.

To continue our series on ‘Marketing During the Pandemic’ we’ve collated what our teams and customers see as the most important elements of being a direct to customer operation.

Important Elements of Being a Direct Operation

1. Start with a Direct State of Mind 

To be a good direct to consumer business you have to start with the right brief, the right business plan and direct being in your DNA. Moving from CPA to LTV, and taking responsibility for more of your value chain affects all aspects of your operations.

2. Have Direct Conversations

The digital market has too often been comfortable operating in grey areas and obfuscation because understanding the tech was hard. Taking the upside of direct ownership also means getting into the detail. Asking your vendors the tough questions on transparent terms.

The best way you can communicate through this crisis and long after is with a direct to consumer, and vendor, approach.

3. Focus Everything on Understanding the Customer

It’s the oldest adage in marketing – know your customer. If you know what they want, you can put them at the top of your business plan and flow all metrics and decision-making from that insight.

4. Own the Strategy, Not the Execution

The digital market has too often been comfortable operating in grey areas and obfuscation because understanding the tech was hard. Taking the upside of direct ownership also means getting into the detail. Asking your vendors the tough questions on transparent terms.

The best way you can communicate through this crisis and long after is with a direct to consumer, and vendor, approach.

5. Get the Data. Own the Data.

It’s the energy for every good direct business. We all know why Amazon keeps winning! There is no shortcut. If you don’t have direct ownership of your data, expect significant challenges implementing a direct to consumer initiative. 

6. Use Insight to Optimize Creative

There is no ‘brand’ advertising or ‘response’ advertising in a direct world – every communication is designed to sell your product. Use your customer understanding, data and tech to power creative that is instantly effective in communicating its message.

Don’t over target- don’t let the data drive you, but do use it to best balance efficiency with reach. A great way to do this is exploring new direct to consumer trends like kinetic emails or user centric design strategies.

7. Encourage & Facilitate Direct Feedback

It’s the energy for every good direct business. We all know why amazon keeps winning! There is no shortcut. If you don’t have direct ownership of your data, expect significant challenges implementing a direct to consumer initiative. 

8. Create Better Pricing

If you own the strategy, choose the tech, optimize the supply chain and own the data you will probably create better margins. This is as true in B2B as it is in B2C. If you are a brand in-housing or a commercial publisher, own the plan, in-house the thinking and outsource the services. If better margins mean better prices for customers, you will likely increase market share.

9. Be Ready to Take Responsibility

It’s not a downside – more of a watch-out. If there are challenges, you have no one to go to but yourself! If something isn’t working in your supply chain, take responsibility and be able to act. 

10. Be Set-Up to Act Fast

Being more direct brings you closer to customers. Those customers will expect instant response. The more direct you go, the faster you will need to operate. 

One of the key elements of creating a direct to consumer strategy is ensuring that you have the bandwidth to react and respond as quickly as possible. 

Before you being to strategize how you can integrate these elements into your business strategy, there are a few things to consider.

Questions to Ask Yourself:

All business are unique, but they share many similar challenges. The most effective way to be a more direct business is to ask yourself some key questions: 

  1. Does your business plan support a direct-to-consumer strategy?
  2. Do you know where the margin lies across your value chain?
  3. Are you clear on where strategy ends and exceution begins?
  4. Do you know what you need to own in-house and when to use a partner?
  5. Do you own your technology relationships?
  6. Do you have the right data strategies and capabilities in place?
  7. Can you work to a model that runs off lifetime value (LTV) rather than short-term CPA?

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