How Direct-To-Consumer Brands Are Great for Your Company

What Is Direct-To-Consumer Marketing?

Direct-To-Consumer (DTC) marketing is when a business markets its services or products directly to its consumers via social media and e-commerce websites. Marketing that is not considered under DTC include TV, radio, or magazines as these channels involve the process of going through a third party. It also includes selling these products or services directly to the consumer instead of going through a brick-and-mortar middleman. By cutting out the retailer or wholesaler in between, a business can cut expenses between the manufacturer and consumer and create better consumer relations.

Why Are Having DTC Brands an Advantage for Your Business?

Cost-Saving

This is perhaps one of the most significant and most obvious benefits. The DTC model allows for more flexibility in operational costs and decreases overhead costs. It also removes challenges such as negotiating prices and keeping all the profits rather than sharing them with retailers while gaining better visibility in the retail market. It helps in saving costs as well as generating better profit margins. Saving costs especially becomes essential with a small business or a start-up slowly expanding into the larger markets. By cutting the middleman and saving from the profits, the company can invest and budget in other areas of marketing that can help it grow.

Customers Connection

Another selling point of a DTC brand is its ability to interact with its customers at every step of its growth. It's no longer only about the quality of the product or service that matters but also the community it builds. Studies have shown that most consumers want brands to connect with them through similar values and a shared understanding of their interests and needs, improving brand loyalty. When a brand sells through a third party, this connection and loyalty can present themselves as a more difficult challenge.

Personalization

DTC models allow for a consumer's shopping behaviours to be collected and converted into data that can be used to help develop and improve products. Data is essential for personalized marketing. Having better customer relationships and gathering consumer data opens ways for personalized customer experiences, from curating product selections to tailored communication via emails. Such efforts help with better customer retention, and research has shown that customers are more likely to buy from businesses they recognize and those that provide offers that they find most relevant. They are also more likely to buy from brands that offer a more personalized experience.

Fast Turn Around and Reach

With more traditional marketing models, the amount of time a product reaches the shelves can vary between 18 to 36 months, sometimes even more. With such long-term planning and risks involved, businesses are often afraid to take innovative risks with new products because they are unaware of whether they will succeed with consumers. However, with DTC models, companies can implement faster product launches by showcasing newer products on a smaller scale, developing new products and testing them with a more controlled demographic, and gathering customer feedback quicker. Businesses would have the flexibility to get to know what consumers truly want and constantly improve products faster without having to worry about shareholders or retailers.

Better Control

When a business involves a third party for retail, they often have to give up control of how it's marketed; it's essentially in the retailer's hands at that point. However, with DTC, the business has superior control over all four P's of marketing - product, promotion, placement, and price. They have the ability to experiment with different types of marketing techniques as well as the freedom to present their products on their e-commerce website to customers. Having this kind of control over products also helps in having authority and maintaining the business's identity.

More User-Generated Content (UGC)

E-commerce sites and social media are the biggest platforms to be leveraged for DTC. From these, UGC is an area that can be easily tapped into to drive marketing. Through social media, asking consumers to share testimonials and their experiences with specific products is an excellent way to generate free and genuine promotions. Having consumers as spokespeople for a business's brand helps create more trust to invest in that brand. Research has also shown that consumers trust reviews and testimonials more than personalized recommendations, which is a great way to increase conversion to purchases.

Direct-to-consumer business models are innovative ways with various tools that can help businesses grow more than traditional marketing methods. With the emergence of multiple digital platforms where consumers can shop, brands now have better tools to engage with customers on a more personal scale which could never have been done before. It's created an opportunity that can significantly work in your favour if executed appropriately.

Image Source: Shutterstock (1930996376)