You can have a profitable DTC strategy. Here's a quick take... It's OK to lose money to acquire a customer. But you have to build out a financial metric that shows when that customer will be a profit center. If you don't, and you're just spending aimlessly to hear the cash register on your Shopify account "ring," you'll be in a world of trouble. Some quick-fire items... - If you don't have returning customers, it won't work. - If you don't know if you have returning customers, it won't work. - If you don't know how much you spend to acquire a customer, it won't work. - If you aren't testing different ads, emails and funnel strategies, it won't work. - If you don't have the right person helping you, it won't work. - If you don't know your numbers, it won't work. DTC is getting thrown around a lot. Don't get sucked into the hype. It's a unique channel, one that needs to be taken serious. In short... Understand DTC to its core. All pieces. And know your numbers. I hope that helps. #dtc #sales #cpg
And don't forget, partnering with the right 3PL Mark A. Samuel ;).. especially one who won't hide your true costs in line items fees.
Build a data pipeline to track the LTV of the customer back to the original ad spend and ad creative (or email).
Completely agree on customer metrics. One good thing about DTC is that DTC data (with repeat customers) can also be used to show unique consumer profile or insights to retail category managers. Additionally, if possible one can show a strong local uptake, so you can launch new products quickly and use this channel to enter into retail store shelves faster. Plus now we have a whole DoorDash like companies also helping consumers order snacks as well. Arshad Bahl
Thanks Mark, some really great points. Invest in reliable data to understand what results are expected before throwing money at it
Nailed it!
big fan of subscriptions. Makes the most sense, cuts through the noise, you can find your tribe.
love love this post Mark - so timely too!! Keep on posting my friend.. I read every one... send many of them along and most of them, make me smile and give me good ideas! xoxo
Can we PLEASE open a clubhouse chat on the above topic?!
Love ALL of the above. So many brands rely on paid ads to acquire new but neglect existing customers. Repurchase is earned, not given.
Cofounder & CEO of Bare Bones
3yAll. Of. This. We did our share of stumbling around, and have learned all of this the hard way. Keep sharing these insights, the industry needs them.