Direct-to-customer (D2C) marketing strategies can help a company develop positive relationships with customers and increase its overall revenue. Many companies use these strategies to better appeal to those who prefer online shopping over physical stores. By learning about the fundamentals of these strategies, you can better determine if D2C marketing can address a company’s preferences and needs.
In this article, we define what D2C marketing is, explain why it may appeal to a younger market, list the pros and cons of using it and provide some helpful tips for implementing a strategy yourself.
What is D2C marketing?
D2C marketing is a sales strategy that allows a customer to purchase products or services from a company or manufacturer’s website rather than an external distributor like a retail store. Companies can promote their merchandise, manage a purchasing protocol and ship items to customers from an internal warehouse. D2C may also help a company promote its brand identity, as the executives can implement its logo and signature design elements in any products or services they sell.
Benefits of D2C marketing
Consider the following benefits of using a D2C marketing strategy:
Production management: A D2C company can directly oversee all aspects of a production and sales process. As a result, they can employ a more cohesive brand identity and develop consistent protocols for handling interactions with customers.
Maximized revenue: By selling products and services directly to services, a company can keep more of its annual income, which can increase its overall revenue. The executives can also expand their budget to include more marketing campaigns, like video advertisements.
Access to customer information: When a customer makes purchases on a company’s website, its marketing team can collect more important data about their demographics and buying habits. As a result, they can stay updated about trends and create targeted promotions.
Personalization options: Hosting products and services on a company’s website often allows a marketing team to offer unique personalization options. For example, a website might provide a quiz that aligns a customer’s preferences with the merchandise a company offers.
Enhanced customer service: The sales representative of a D2C company often knows a lot of information about its production and distribution service, which means they can offer in-depth answers to customer queries and concerns. For instance, one person can address questions about a product’s features and the company’s shipping process.
Market penetration opportunities: This phrase can refer to a company’s ability to sell products in one particular industry. By focusing their efforts on branding and customer contentment, executives can increase the value of their company in a market and better compete with similar businesses.
Product testing ability: A D2C company can test products in its own facilities and customize quality assurance procedures, meaning they can better ensure that a product matches its description and functions correctly. It can also develop and adjust its testing procedures.
What makes D2C marketing appealing?
The D2C marketing model involves making purchases online, which is often a more streamlined and cost-effective process compared to other retail options. Since a D2C company typically manufacturers or designs its own products and services, it can reduce expenses that derive from paying an outside supplier or partnering with a distributor. As a result, its merchandise may cost less compared to a company that produces items for a retailer.
Many may also appreciate knowing a company’s value system, meaning its mission statement and overall purpose. D2C marketing can give a company an opportunity to promote its value system through its brand identity, which it can display on a social media platform or a product’s packaging. Users may see this brand more frequently and develop a positive emotion about the company. They may also enjoy a D2C company’s customer service efforts, which involve more direct interaction and community-building than a traditional marketing model.
Disadvantages of D2C marketing
Here are some issues that D2C marketing might have:
Supply versus demand: As a company serves many functions besides manufacturing, it may have a smaller product inventory compared to how many customers order that item. To reduce this possibility, a business can expand its production budget or seek professional advice from long-term companies in the manufacturing industry.
Production responsibilities: A D2C company requires more departments for varied production-related tasks, meaning it may require more labor costs and a reduced budget for individual endeavors. To mitigate this possibility, the executives can reduce costs in other areas while maintaining the same level of quality.
Subscriber retention: Many D2C companies offer a subscription service for monthly products or video-streaming media, which means they may include free trials that customers can end after a month. To increase the number of individuals who stay subscribed, they can offer additional benefits and rewards.
Competitive markets: As many modern companies now use a D2C strategy to increase revenue, a new business may have more competition within a particular market. Marketing teams can analyze trends and competitor strategies to increase their chance of success by using a D2C model.
Tips for using a D2C marketing strategy
Here are some tips for using a D2C marketing strategy:
Create a subscription service
Consider establishing a membership service that offers discounts and early access to new products or services. It may be helpful to offer a community forum as well that allows subscribers to discuss a company’s merchandise, bond with each other and ask sales representatives questions directly. Customers often appreciate a company that offers an opportunity to socialize, which may cause them to buy more products and services in the future. You can also offer more benefits to long-term subscribers to inspire positive emotions about a company and its brand.
Streamline the shipping process
D2C companies can benefit from creating an accessible and efficient shipping process for a company’s products. For example, you can create a shipping service that delivers a product directly to a customer’s house, which allows them to interact with a sales representative.
Consider hiring website designers who can optimize a website’s shipping portal, better ensuring that diverse groups of customers can navigate it easily. You can also offer free returns, which may motivate potential customers to purchase a new product from a company’s website, as they know they can recover their funds if necessary.
Reduce the price of a common item
Consider focusing your D2C marketing efforts on selling an item that multiple people use on a day-to-day basis. By reducing costs related to retail partnerships, a company can better prepare a high-quality version of a product while reducing its overall price. As a result, the executives can engage customers who appreciate both a discount and the benefits of D2C marketing protocols.
For example, if a company only prepares and sells high-value coffee beans on its website, the executives can produce advertisements that discuss its reduced price compared to competitors and list the benefits of ordering from their website.
Research SEO keywords
SEO keywords are specific terms or phrases that an individual adds to online content to improve its ranking on a search engine. Researching SEO keywords can help a company increase brand awareness and promote products or services. First, discover which phrases are trending on search engines and social media websites. Then, implement these terms in the content on a website’s home page, particularly in headers and topic sentences.
You can also create blog content that uses SEO keywords, which can also help a company convey its mission statement to prospective customers browsing the internet.
Use high-quality materials
Consider investing in high-quality materials for products so a company can offer more overall value to customers. To do so, the executives can expand a company’s budget to include more funds for materials, then create elaborate product testing procedures to determine the most viable options.
It may be helpful to conduct market research on materials that competitor businesses are using for their products to see which options have positive reports among customer reviews. You can also send a survey to long-term customers that asks them to choose between different materials for varied products.
Partner with celebrity influencers
Celebrity influencers are individuals who became famous through mainstream media, then amassed a lot of followers on a social media account. If a company partners with an influencer, it can promote its brand and merchandise via sharing posts and photos on its profiles.
It may be helpful to research influencers who share a value system with a company, and then have a marketing team craft a carefully worded email to their public relations team. You can partner with influencers who grew a follower base solely through social media, video streaming or podcasting platforms.
Use infographics and memes
Infographics are a combination of chats, images and text that convey information in an accessible format, while memes are visual images with some text that humorously conveys a popular concept. Infographics stay the same, while memes can change over time as people discover new ways to express an idea.
D2C companies can use both formats to spread brand awareness, promote products or advertise a new sales deal. As a combination of graphics and text media can convey information efficiently, using either option may be especially helpful for social media marketing campaigns.
Encourage customers to promote a brand
Consider motivating current customers to promote a product or service, as prospective customers may trust their opinion. To incentivize them, you can offer a discount or reward based on how many times they refer a company to a peer or family member.
For example, you can provide a specific referral code they can give that tallies how many times other people use it on a sign-up page. You can also host a contest via social media that offers a discount for people who share a company’s post or make their own promotional content a certain number of times.
Find customers through blog posts
Before establishing a new D2C company, it may be helpful to advertise its mission statement and value system through blog posts. Consider posting about relevant topics to the products or services a company sells or its industry.
For example, a retail company can generate content about popular fashion trends or style advice, then implement a portal for individuals to leave comments. If a company launches its primary products or services on its website after amassing followers on a blog, the executives may increase the number of initial customers they receive.
Develop a mobile application
A mobile application can allow customers to browse merchandise and make purchases from any location with cellphone service, which may increase the number of sales a company makes in a certain timeframe. Consider hiring a website developer who understands how to design an aesthetically engaging and accessible mobile application that incorporates a company’s brand.
You can also implement a notification system that tells customers about sales events or relevant industry news when they’re using a different application, as this may encourage customers to browse its merchandise and purchase items more often.
Create a popular advertisement
Develop a video advertisement that multiple individuals share across different websites, as this can inspire prospective customers to learn more information about a company’s brand and increase its overall sales. To create a popular advertisement, it’s important to research popular trends among your target audience.
For example, if prospective customers respond more positively to videos that have a story with a narrative arc, you can adapt that format using a company’s signature style. You can also use a trend to help develop a brand’s attributes.