Optimize Your D2C Marketing Strategy With These Tips

The Gist

Customer habit shifts. Changing established buying behaviors requires more than offering D2C; it demands a compelling reason for change.
Investment realism needed. Realistic ROI expectations and comprehensive cross-functional collaboration are critical for D2C success.
Strategic 3P assessment. Determine the strength of Purpose, Potential and Priority before investing or expanding in D2C initiatives.

A direct-to-customer marketing strategy offers the opportunity to deliver increased revenue, but that doesn’t mean it’s the right fit for every organization. During the pandemic, it was assumed that D2C growth was a given, and with that came high expectations for results.

However, many organizations are now struggling to deliver against those expectations because of three critical D2C marketing challenges:

Many fail to recognize that customer buying behaviors are well-ingrained and difficult to change, instead assuming that customers will buy directly through a website once the opportunity is there. In reality, brands must create a compelling reason for customers to change their purchase habits.
Organizations lack a true understanding of the realistic return on investment of a D2C marketing strategy, or they have overinflated growth expectations.
Organizations overlook the cross-functional complexities and capabilities required failing to establish cross-functional work across marketing, sales, IT, supply chain and customer service to overcome issues such as sales channel conflict.

Some organizations that pivoted into D2C are now facing challenges scaling it. According to Gartner research, nearly one-third of B2C organizations are below or far below expectations for D2C. This is driven by customers buying from multibrand retail for more choice and convenience.

A gitant goldfish, which has grown legs, rides a bicycle in piece about D2C marketing strategy. — A direct-to-customer marketing strategy, offers the opportunity to deliver increased revenue, but that doesn’t mean it’s the right fit for every organization.Mark on Adobe Stock Photos

D2C Marketing Strategy: Clarify the 3Ps for D2C Success Today

Brands should be optimistic about the opportunity for D2C strategies to succeed but must clarify the 3Ps for D2C, regardless of whether the organization is considering launching a D2C strategy or if it is already selling directly today:

Purpose: Start with the why of D2C marketing strategy. Be clear about the customer value proposition, including whether or how D2C seizes an identified customer opportunity or addresses a key customer challenge.
Potential: Then describe how D2C will deliver value for the customer and the business. Express the potential in terms that connect directly to customer experience and commercial objectives and key results (OKR).
Priority: Finally, determine what the organization will deliver, including what capabilities (for example, D2C platform) and resources (for example, people, budget) must be in place to achieve it.

Conduct an exercise to determine the 3Ps for your organizational context, with the aim of attaining the strongest possible version of each of the 3Ps. A strong 3P is grounded in insights, realistic, measurable and built on a clear direction.

Image of wooden signposts on the left against a blue sky with swirling clouds in piece about D2C strategy. — For many organizations, it is likely there are a mix of strong and weak justifications for purpose, potential and priority. Use this mix to determine the strategic direction of D2C, regardless of whether you’ve already established it.cooperr on Adobe Stock Photos

Determine the Strategic Direction Based on the Strength of the 3Ps

Organizations should evaluate the strength of their 3Ps before investing in D2C, rather than pursuing investments on the assumption that it will kick-start growth. For many organizations, it is likely there are a mix of strong and weak justifications for purpose, potential and priority. Use this mix to determine the strategic direction of D2C, regardless of whether you’ve already established it.

When D2C Isn’t Already Established

The barriers to going direct have been significantly lowered in recent years with various cost-effective technologies, but that does not mean that a D2C marketing strategy is right for every organization. CMOs can choose one of the following pathways based on the strengths and weaknesses of the 3Ps:

Establish whether all the 3Ps are strong. This 3P assessment should provide a high degree of confidence and a strong commitment to deliver.
Pilot whether the purpose and potential are strong but the priority is weak, in terms of organizational commitment. Start with a relatively smaller investment and scale if proven successful.
Avoid if the purpose and potential are weak, even if there is strong priority and commitment in the organization.

Related Article: Can Branded Storefronts Help DTC Brands Succeed?

When D2C Is Already Established

Many organizations have established D2C and made significant investments to support their original strategic intent, but the changing macro environment has meant that some next steps for the organization are unclear.

Accelerate if the purpose and potential are strong and the D2C strategy is exceeding expectations. Strengthen D2C’s priority and increase investment to accelerate growth.
Evolve if the purpose and priority are strong, but the potential has weakened. Evolve D2C’s potential defining how it will deliver different value for the customer and the organization.
Shutter if the purpose and potential are weak and and not meeting expectations (even if the priority is strong). Provide clear customer communications why this is happening and what it means.

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