Deciding to Go Direct

Direct to consumer (D2C) marketing has been on the rise for years. Pre-pandemic, Nielsen/Rakuten reported D2C marketing was responsible for 40% of the growth in consumer goods e-commerce sales in 2019. We sat down with our Executive Director, Robbie Magee, to learn more about what goes into building a D2C channel.

What are some of the factors that go into building a D2C channel?

Robbie Magee (RM): Many companies considering building a D2C channel wonder about the time investment, the learning curve that’s involved, and the internal resources that they have — or don’t have — available. And we all know that time is money, so speed to market is also a big deal. Fortunately, having an experienced marketing partner can dramatically shorten the lead time, and the amount of disruption, necessary to launch. I know that we work as an extension of our clients’ internal teams, building the necessary infrastructure in whatever environment that makes most sense for them.

As for indicators on the “right” timing, I’d say that’s often a cultural decision. And while there does need to be a shift in mindset, many B2B-native, sales-driven organizations tend to overestimate the opposition they’ll face from their existing channels and lines of business. Our experience has been that a rising tide lifts all boats. When companies are growth-minded and successful, everyone benefits.

When thinking D2C, most people go straight to consumer goods. Can D2C also be an important channel for service businesses?

RM: We’ve been fortunate to work with clients who were pioneers in the D2C channel space, and who had an intense focus on customer centricity. From the beginning, they said, “The experience is the product”. When you look at it that way, you realize that designing the experience to surpass consumers’ expectations is how you become successful, whether you’re selling products or services.

That’s especially true of services that require a more consultative sales approach. Consumers want to be able to consume educational content independently, typically online, then seamlessly transition to a “face-to-face” setting where their personal goals and situations can be discussed. Then, finally, they want to get back online to self-navigate the sales process.

Given today’s environment, do you think many traditional B2B or B2C companies should shift the majority of their energy to D2C?

RM: Consumers’ channel preferences are deeply ingrained. Unless you’re able to transact in the channels that they’re comfortable with, they’ll find other engagement opportunities that suit them better. So building a D2C channel should definitely be considered additive or supplemental, not as competition for existing channels.

It’s also comforting to know that with all the emphasis on “performance marketing” these days, a D2C channel thrives on real-time data and continuous optimization, so you’ll be able to make more confident financial decisions across all media tactics and response channels.

Speaking of data, is there any specific data or infrastructure that needs to be in place before you can start developing a D2C channel?

RM: The ideal setup is an existing CRM system such as Salesforce, with sales results captured by website tags, all in an existing database platform that’s supported by IT and web development teams. If that doesn’t exist, an experienced partner should be able to help you out in all those areas. We’ve helped clients build their D2C website and manage and implement tagging, or worked with their IT departments to ensure website sales are being captured. Ultimately, the goal is to give clients the ability to capture sales data at the customer level.

If a company has decided D2C is right for them, where should they start?

RM: It’s really as simple as having a conversation and taking inventory of the resources and tools — including sufficiency, suitability and/or scalability — that they may already have to work with. And sharing goals, both internally and with their partners, is critical.

Any additional advice?

RM: Number one, at a time like this, be safe and stay healthy. And two, if the past year has taught us anything, it’s how important it is to be connected to your customers and prospects. Building out your own D2C channel can be an excellent way to create and deepen those relationships.