The direct-to-consumer (D2C) model has grown exponentially in recent years, thanks in part to savvy marketers that use the strategy to connect directly with their customers. With disruptor D2C brands such as Warby Parker, Dollar Shave Club, Harry’s and others all valued at or close to $1 billion, D2C marketing has proven that it is here to stay. And now more traditional brands want in on the action too, as evidenced by companies such Pepsi, Verizon, and Disney deploying their own D2C strategies.
As the D2C industry evolves, so too must the marketing strategies that D2C brands employ. The D2C model can help brands achieve benefits ranging from increased customer loyalty and more direct storytelling capabilities to better margins and faster product innovation, but as more brands enter the fray it is becoming increasingly difficult to reap the rewards that the earliest D2C innovators experienced.
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Fortunately, advances in digital marketing are happening almost as fast as growth in the D2C market. With new innovations in data, marketing automation and AI happening at breakneck pace, it seems like there’s always some new way for D2C marketers to engage their customers. Let’s look at five cutting edge digital marketing strategies to help D2C marketers maintain their competitive edge.
Use advanced analytics to build detailed customer profiles
Any effective marketing campaign begins with an analysis of the target audience. But for D2C marketers to succeed they’ll need to go beyond the standard persona-building processes and create detailed customer profiles that dig into their customers’ demographics, psychographics, online behaviors, mobile preferences, and more. Leverage the latest customer journey mapping technologies to help visualize the customer experience and drive organizational alignment. Consider using a customer data platform to get a 360-degree view of your customer and enable omnichannel marketing. By painting a detailed picture of your target audience’s profile, you’ll have an easier time mapping out advertising campaigns, allocating your budget, and attracting the most valuable customers.
Go beyond search to find prospects with high purchase intent
When most marketers speak of intent-based advertising, they’re referring to search channels in which the user has demonstrated an active interest in researching certain products or services. But in this day and age, intent signals can come from a variety of channels. Perhaps a user visited your competitor’s websites, or one of the many sites offering product reviews and recommendations. Maybe they clicked on a relevant ad, or solicited advice in online forums. A whole industry has emerged to support intent-based marketing in recent years, and the effective application of intent-based marketing programs can help D2C marketers increase conversions and drive sales — all while reducing their ad spend.
Don’t be afraid to take risks with your advertising creative
D2C brands are, by their very nature, disruptors. If you are trying to lure sales away from established businesses with recognizable brands, you can’t afford to rely on the same strategies that those brands use for their ad creative. Instead, you’ll need to come up with a creative strategy that makes your brand stand out from the crowd. Build a portfolio that spans a variety of creative formats and platforms, including new formats such as short-form videos on TikTok or playable ads in mobile apps. Tap into your audience’s emotions by using the power of humor, surprise, fantasy, community and other powerful motivators. Ad creative is constantly evolving, and your approach should too. Use the different data touch-points to analyze creative concepts and enable a long term, sustainable strategy.
Engage customers 1:1 through emerging personalization technologies
One of the biggest benefits for D2C brands is the ability to connect with customers on a direct, 1:1 basis, with no middleman standing in the way. It’s imperative that D2C marketers don’t let this opportunity go to waste. Customized email communications and personalized promotions are a good start, but don’t stop there. The field of AI and machine learning is helping to bring to market a bevy of 1:1 marketing tools such as live chatbots, personalized product recommendations, custom content delivery, custom video content, and more. The D2C winners of the future will be those that learn to harness these technologies to build deeper, more meaningful relationships with their customers.
Create a data-driven loyalty and retention strategy
With acquisition costs rising and competition growing, D2C brands require effective retention strategies in order to increase the lifetime value of their customers. Basic loyalty programs that rely on transactional or functional incentives are all well and good, but advances in data analytics and machine learning have enabled new levels of retention marketing. Predictive analytics, for example, can let you know when a user is at risk of churn so that you can try to save the relationship with a targeted promotion. Then there are re-engagement advertising programs that will let you reconnect with customers who might’ve gone dormant. Form a deep, data-driven understanding of your customer, and then experiment with these and other ways of lengthening retention to increase your overall customer LTV.
Direct-to-consumer marketing is still considered innovative, but it is quickly moving towards the mainstream. To stay ahead of the curve, D2C brands have to take complete advantage of the latest digital marketing tools and technologies. Do that while providing consumers with a compelling and unique offer, and you might just become a D2C unicorn.
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