If you are an online shopper, there are chances you have engaged with a Direct-to-consumer (D2C) brand at some point. For the unversed, D2C companies manufacture, market, sell, and distribute their products to customers without depending on distributors or retail outlets.
D2C brands have been around for many years. However, the advent of the internet has democratized access to technology and distribution channels, leading to a slew of D2C brands mushrooming in recent times.
The pandemic further accelerated this trend in 2020, where traditional supply chain models were disrupted, and digital was the only way to go for brands to thrive. With advancement in technology, D2C business models have evolved to accommodate new avenues of communication and customer interaction touchpoints.
Newer D2C brands have emerged on the block and established brands, too, have started exploring channels of activating direct interactions with consumers.
However, this trend has come with its own set of growth challenges for D2C brands. In a saturating market, D2C marketers are struggling to retain customers, grow organically, and elevate their brand experience.
To stay ahead of the curve and adapt to shifting customer preferences, D2C brands are focused on building strong customer communities through personalized engagement that is enabled by powerful full-stack marketing automation solutions.
Here’s how D2C brands are leveraging marketing technology solutions to their advantage to stay ahead of the curve.
Differentiating the brand
With competition getting stiffer, there is immense pressure on D2C brands to stand out from the rest. Marketing automation technology has enabled D2C companies to differentiate their brand powered by intelligent engagement.
Backed by a robust customer data platform, marketing technology companies help D2C brands capture and organize data (personal, behavioral) from multiple sources across the customer journey in real-time.
The data helps build unified user-profiles and helps brands understand more about the customer and their unique needs. Actionable insights are distilled from this data to create personalized campaigns and implement intelligent omnichannel engagement strategies at scale.
So, while the competition is busy launching cookie-cutter campaigns, D2C brands that use marketing automation are leveraging dynamic lifecycle marketing campaigns to connect with users on multiple platforms effectively. For example, BannerBuzz, an eCommerce platform in the custom signage and display space, has increased the number of orders and reduced cart abandonment rate by adopting a hyper-personalized user engagement approach. This has helped the brand to increase its overall revenue and deliver a best-in-class user experience at scale.
D2C brands are constantly reeling under the pressure to grow their revenue pie. Marketing technology companies enable D2C brands to drive conversions by running engagement-led marketing campaigns. With access to data on customers’ behavior and lifecycle journey, D2C brands can predict conversion opportunities by identifying highly effective user flows.
Marketing automation helps brands leverage predictive analytics to hone in on cross-sell and up-sell opportunities, and create high-conversion funnels with contextual campaigns. Like, Zivame, an online lingerie retailer, targeted anonymous users who dropped off from the product page via a multichannel approach. This resulted in a 20% uplift in the conversion rate.
Creating brand evangelists
The customer is at the center of the universe for D2C brands. However, brands can no longer view their entire customer base as a single unit. Each customer is different and so are their needs and preferences.
Marketing automation helps D2C brands craft personalized experiences for each user. It enables brands to formulate an engagement strategy that is high on context with 1-to-1 personalization.
It is interesting to note that the personalization element is not restricted to just addressing customers by their name in emails and messages. It also tailors the content as per every customer’s lifecycle data. Taking it a notch higher, marketing technology has evolved to bring personalization to web and mobile application environments.
In a market where D2C brands are fighting tooth and nail to grab customers’ eyeballs, a hyper-personalized, data-led communication approach cements a customer’s loyalty towards the brand. By leveraging customer preferences, D2C brands can also tailor loyalty programs that feel personal to each customer.
For instance, MyGlamm, a digital cosmetics brand, leveraged marketing automation to deliver exceptional user experiences with targeted and highly-personalized communication regarding products in users’ carts, which resulted in 137.5% uplift in orders.
Loyal customers do not shy away from loosening their purse strings and extolling the brand to other potential customers. Well, who needs a high acquisition budget when they have customer evangelists on their side.
Building a retention framework
It is not uncommon for D2C marketers to worry about losing their customers to competitors. While significant time and resources are invested towards acquiring new customers, D2C marketers also need to proactively focus on increasing the customer lifetime value (CLTV) of their existing customers.
But brands need to be mindful that there is no one-size-fits-all approach to retaining customers. Retention campaigns have to be highly personalized, and the first step in that direction is to identify the right target, user groups.
Advanced analytics such as Recency, Frequency, and Monetary (RFM) analysis are reliable indicators of how long existing customers will continue transacting with the business. RFM analytics helps D2C brands identify customer groups about to churn and accordingly craft promotional campaigns to bring them back.
Cohort Analysis is another analytics layer that aids with behavioral analytics of customer groups with similar attributes that help marketers spot trends and design highly-optimized funnels. Clovia, for example, witnessed an 85% uplift in revenue by tapping into Funnel Analysis and multi-channel engagement.
Additionally, Campaign Analytics helps understand how users interact with the brand’s platform, where they drop off in the journey (e.g. cart abandoners), and what brands can do to drive optimal results.
Marketing Automation can actionably help D2C brands intelligently win the race for business growth with all this and more.
D2C brands must leverage marketing automation to deliver an omnichannel experience for their customers and drive organic growth. With the right marketing automation technology, they can not only building a differentiated brand powered by intelligent engagement but also boost conversion rates with data-led, predictive marketing campaigns that drive up value for customers. More importantly, these upcoming brands can win customer love through hyper-personalized communications and reduce churn with targeted retention campaigns. It will be interesting to see the new opportunities that D2C brands unlock with the help of marketing automation.
(Keyur Dhami is Vice President – Customer Success at WebEngage and the views expressed in this article are his own)