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What is DTC (Direct to Consumer)? How does DTC Marketing work?

Direct-to-Consumer Marketing takes brands directly to consumer when there might have previously been an intermediary – such as a retailer or traditional publisher. DTC brands are considered disruptive both for how they access their market – the logistics behind their offering – and their marketing strategy. Let’s take a look at these two criteria:

DTC Marketing Examples: Direct To Consumer Brands

The First Frontier (Warby Parker)

In the past, the only way to get prescription glasses (in most Western markets) was to make an appointment to visit a doctor’s office, pick out a pair of frames at that office, then wait a few weeks to pick up the glasses at the same optometrist’s office. With the arrival of Warby Parker and others in the eyewear space, no more! Suddenly glasses could be delivered Direct To Consumer, with the doctor only involved for the eye exam. After a prescription is uploaded to the site, users can order their frames directly from the brand. Voila! Eyewear is shipped directly-to-consumer.

B2B vs. DTC (Godaddy)

DTC distribution applies as well to industries of products traditionally sold on a B2B basis. A great, early example is domain registration. In the mid-90’s, domains were the, well, domain of the few web developers in existence. It was a club of nerds, and a highly inaccessible process for the average person just signing on to their dial-up internet. Then came GoDaddy. In 2005, it ran a super bowl commercial offering its registration services, suddenly offering a niche product for the web developer subculture to the masses. This Direct To Consumer, approach was integral to GoDaddy’s business plan, but also, later, its marketing.

The surge in pharma advertising (Claritin)

In advertising, DTC is often assumed to be pharma advertising. “A 1996 marketing campaign for the allergy medication Claritin found a loophole by intentionally excluding information about the medication itself from its advertising (which only included imagery, slogans such as “It’s time for Claritin” and “Clear days and nights are here”, and instructions to ask a doctor or call a phone number to request more information).” This move led to a surge in pharma advertising, and ultimately the establishment of clearer guidelines for manufacturers to advertise directly to consumers, rather than just the B2B medical market. Media spending surged and DTC was born.

What is a good Direct To Consumer Strategy?

Before digital, consumer goods and media had a symbiotic relationship. The only way Johnson & Johnson could announce a new baby product was through TV airtime, print ads, billboards, radio spots and, well, advertising. And the only way media could monetize was through partners like J&J. While the latter is true, advertisers now control the game, with more avenues to reach consumers.

Implementing DTC strategies will allow brands to better understand their consumers, apply those learnings to their wider markets, and ultimately enhance the brand experience for other retailers. In addition, DTC branding done right increases brand loyalty and raises awareness among all retailers that carry the brand’s products.

So how can DTC be used as a new revenue stream? Here are some key strategies:

  1. Deepen understanding of your consumers
    Commodity brands with limited online buying behavioral data from their distribution partners don’t know how consumers browse, research and buy products online. DTC presents an opportunity to fill this gap. It also provides a starting point for understanding what works and what doesn’t work online: product images, sales descriptions, lifestyle images, blogs, recipes, and many other types of rich content.
  2. Improve branding and communication
    As the product research and evaluation stages of the buying cycle increasingly take place online, brands need to sit down and work to ensure consumers have memorable, authentic and rich experiences online. DTC can provide brand fans with opportunities to discover recipes, evaluate new product ideas, and participate in brand communities.
  3. Personalize the experience: Driving a better customer experience and differentiating themselves from competing brands
  4. Data management: Never forget that DTC businesses are now in a position of responsibility. The key to meeting rising expectations is to master data management (MDM) to enable brands to track all customer and product data in one solution and simplify data-driven decision making.

What is DTC marketing funnel?: Customer Journey

Through DTC marketing, advertisers and CMOs can gain insights of the journey that a customer takes from initial awareness of a brand or product to making a purchase. The DTC marketing funnel is divided into several stages, each of which represents a different step in the customer’s journey.

Here are the stages of the DTC marketing funnel:

  1. Awareness: This is the stage where a potential customer becomes aware of a brand or product. This can happen through various channels such as social media, advertising, influencer marketing, or word-of-mouth.
  2. Consideration: At this stage, the potential customer begins to research the brand or product, evaluating its features, benefits, and pricing. The consideration stage is an opportunity for brands to provide educational content and build trust with the potential customer.
  3. Conversion: The conversion stage is where the potential customer becomes an actual customer by making a purchase. This can happen on the brand’s website, through a retailer or marketplace, or via a subscription service.
  4. Retention: After a customer makes a purchase, the retention stage involves keeping them engaged with the brand, promoting repeat purchases, and building loyalty.
  5. Advocacy: The final stage of the DTC marketing funnel is advocacy, where satisfied customers become brand advocates, promoting the brand or product to others through social media, word-of-mouth, or reviews.

The benefits of DTC marketing agencies: Why do CMOs need them?

DTC marketing is becoming more important as consumers increasingly turn to online shopping and expect personalized, seamless experiences from brands. DTC brands have the opportunity to capitalize on this trend by leveraging digital marketing strategies and creating a strong, direct relationship with their customers.

For advertisers and CMOs, using a DTC marketing agency can be a good idea for a number of reasons, including:

  1. Expertise: DTC marketing agencies specialize in helping direct-to-consumer brands grow and succeed. They have deep expertise in the latest digital marketing strategies and tactics, and they can apply this knowledge to help your brand reach new customers and increase sales.
  2. Resources: DTC marketing agencies have the resources to execute complex campaigns that require significant time and effort, such as influencer marketing or email automation. By working with an agency, you can leverage their resources to achieve better results than you might be able to achieve on your own.
  3. Focus: When you work with a DTC marketing agency, you can focus on your core business activities, such as product development or customer service, while the agency handles your marketing. This can help you save time and resources and allow you to focus on what you do best.
  4. Data-driven approach: DTC marketing agencies use data to inform their campaigns, which means they can make data-driven decisions that help you achieve better results. They can also provide you with detailed reports and insights that can help you understand your audience better and refine your marketing strategy over time.

Overall, implementing DTC marketing can help a brand achieve greater control over the customer experience, improve customer engagement, and drive higher profits. By leveraging digital marketing strategies and creating a strong, direct relationship with their customers, brands can achieve sustainable growth and long-term success.

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