Direct 2 Consumer (DTC) brands are still riding the crest of a wave that began before the pandemic and was accelerated during the big stay-at-home, with many referring to this period as the boom years!

Arguably their biggest challenges now are not so much about acquiring new customers but about retaining the ones they have onboarded.

Most D2C brands are catering for a specific niche and therefore have a limited audience. Think gin clubs, craft beers, and ready meals for the less mobile. Growth for these brands must also be achieved by selling more to the people who already love them. Just think what a transformational difference it would be if all your customers bought just one more product or renewed their subscription just one more time.  A game-changer!

D2C businesses have a couple of great advantages to bring to their customer marketing.

  1. First-party data (and lots of it). heavy investment to build a customer base has allowed D2C brands to put out fantastic offers to encourage people to engage with them. The result is a large database of people who are to some extent interested in the product and the brand values.
  2. Direct contact. It sounds obvious but having a direct channel to communicate with your own customers in a personalised way offers great advantages over broadcast marketing typically conducted by FMCG brands who sell through retailers.

Once D2C brands have a stable stream of committed revenue, they can look for growth by improving their supply chain, developing brand extensions, diversification of products and international expansion. Getting retention marketing right to create that stable base is critical.

But it isn’t easy. Excessive outreach to customers can turn them off and too many offers can erode your margins in double quick time. But, not enough customer outreach can lead to your favourite fans looking around for new brands to support.

On top of that a great deal of customer marketing is wasted on people who only ever wanted the amazing offer you recruited them with and never had any intention of maintaining a subscription or repeat purchasing.

To supercharge your customer retention programme there’s a few things you can do:

  1. Engage with your customers and ask their opinions. It not only builds trust but also can help you tailor your product and marketing propositions.
  2. Segment your customer database so you can understand the characteristics of those who buy a lot compared to those who don’t. This means you can:
    1. predict which type of customer they will become as you recruit them and communicate (or don’t) accordingly.
    2. Adjust your content, your tone of voice and your offers to suit each cohort.
  3. Focus on incremental sales; don’t forget some people are going to buy anyway.
  4. Test different cadences and their impact on incremental sales.
  5. Vary your contact channels. You may be able to use email, SMS, socials, or direct mail to get your message across.
  6. Once a customer has bought four or five times, they are likely to stick around so start to reduce the offer aspect of your comms and focus on engaging content.

Insight is critical to getting this right. Work with agencies who have a lot of real data and who can therefore throw a spotlight onto your database to uncover those hidden pearls of wisdom. Work with partners who can prove they deliver actionable insight. It is easy to pull out a dozen interesting stories about your customer base if you throw enough data at it. The benefit comes from identifying those stories that you can turn to your advantage to help you sell more.

Get that right and you’re on track to becoming world beaters.

Analysis Customer Data Direct Mail