Quick Insights

• Businesses are finding it critical to move to a direct-to-consumer model in 2021.

• DTC E-Commerce saw a significant boost in sales and effectiveness, likely due to lockdown orders and work-from-home policies.

• Effective DTC implementation requires deep problem solving but offers the opportunity to manage your customer experience from discovery to purchase.

Increased competition, growth of e-commerce, and changing consumer expectations have made it necessary for companies to shift to direct-to-consumer business models. More than a third of consumers buy directly from a manufacturer’s website, and this number is expected to rise.

Modern shoppers demand and will pay for convenience, which is why online businesses are thriving and brick and mortar establishments are getting reduced foot traffic. This shift has increased the need for businesses to create and maintain a brand. Delivering and interacting directly with the customer can be a good way for a business to assert control over its brand experience.

Businesses have changed over the last few decades, and the old multi-retailers are becoming obsolete. The increased adoption of online selling and the cutting out of middlemen by the smaller companies has leveled the competitive playing field.

The acceptance of these methods in the market means that they are here to stay. Big brands have to adapt to these changes or risk losing market share. Are you looking to create a successful direct-to-customer model for your company? Here are some effective steps you can take.

1. Plan Accordingly

The transition from exclusively using intermediaries to selling directly to the customers is not easy, even for the best companies. You should set plans for the change and identify ways that the company can effectively change models while still maintaining important relationships.

At this stage, you should be able to answer the following questions in order to assess your company’s preparedness for the move;

• Can the company incorporate and effectively run the direct-to-customer model alongside its existing sales and customer outreach methods?
•  Who are your retail partners, and how does this move affect them? If the impact is negative, what can you do to ensure your relationship with them is not affected? Maintaining existing business relationships is important even with the new model in place. The transition to the direct-to-customer model can be slow, and keeping your retail partners in the dark can have devastating consequences to the transition.
• Is the company prepared, both financially and strategically, to take control of your customer experience? Your company’s ability to run the two models concurrently can greatly impact the success of a direct-to-customer model.

While smaller companies may survive exclusively on the new model, big companies may struggle to immediately meet the levels of sales. Implementing the direct-to-customer model can, however, help the company get a closer look into the customer’s wants and needs, helping you improve your customer experience.

2. Focus on Your Customer’s Pain Points

Companies that focus on their customers make 60% more profit than their counterparts that don’t. Your customers should then be the focus of your strategy for you to successfully implement the direct-to-consumer model in your company. You need to put effort into knowing what your audience wants and how they want it so that you can gain a competitive edge in the market.

Consumer focus, especially in the competitive business world, now goes beyond just providing what the market wants. Companies have to go the extra mile and solve other customer issues that would otherwise prevent them from buying.

Solving customer pain points increase not only your product’s market but also improves the customer’s perception of your company. This is crucial for the success of your direct-to-customer strategy since, without distributors, your brand is your best-selling point.

To do this effectively, your company has to find gaps in your competitor’s service delivery and exploit them.

3. Create a Content Delivery Platform

Consumers can access content today through many platforms and various media forms. Creating your own content gives the company an opportunity to direct narratives involving the company, build the brand, and promote the company’s products. Readers are able to see the company in a new and more open light and are able to connect with it through the content.

A company’s website is usually the most central point for all the brand’s content outflow. Using content platforms, such as traditional cable/OTT ads, social media, and podcasts to drive traffic to your company’s website allows you to control the customer experience from discovery to purchase. Technological advancements are also making it easier for companies to distribute content to their audiences easily and inexpensively.

The content delivered to your audience has to be relevant, entertaining, and helpful for it to be effective. Your readers should be able to read, listen, or watch your content and gain value from it. An example of a great content strategy includes highlighting the clients’ needs, then showing them how your company can solve them.

It is also important to consider that 90% of consumers will make up their minds about a brand only after searching for it online. This is why not having an online presence is not acceptable for a company seeking success with a direct-to-customer strategy. You can easily improve your digital effectiveness by using strategies like search engine optimization, social media advertising, and paid searches.

4. Data Management

Companies using an integrated direct-to-consumer strategy can collect data directly from their interaction with the consumers. This data is often more accurate and reliable and can be used to improve your company’s marketing, promotion strategies and to personalize products and services. For this model to work, you should be able to collect and analyze the data correctly to identify the market patterns and evaluate the effectiveness of the strategy.

It is no longer just enough for the company to show personalized recommendations based on the client’s past purchases. The data should also help you create a deeper connection with the consumer by creating more fulfilling products for them. You can also personalize communication, and other information passed to the client from the insights, based on the information collected.

Creating a successful direct-to-customer model will then require an effective method of collection and analysis of consumer’s data. This consumer data can be effectively used by your in-house teams, and it can prove to be a valuable asset for your ad agency to tailor advertising strategies.

Implementing a Direct-to-Consumer Model in Your Company

The business market is changing, and selling directly to consumers is the future of commerce. New technology and changing consumer needs have made it easier for companies to cut the middleman out, increasing their profit margins and improving customer relations.

Implementing this model, however, is not easy for mid and large companies as they cater to large, diverse audiences. The steps above can help you implement the strategy effectively.

Are you preparing your business for the future by implementing a direct-to-consumer product strategy? To get the education your team needs, or to have your strategy implemented from start to finish, Schedule a Free 30-Minute Strategy Session with Advantage Strategies.