Now Is The Time To Grow Your DTC Business
As we come together in our respective communities to battle the coronavirus pandemic, one thing is very clear: Companies that have acted the fastest will likely emerge in the best shape. Businesses of every size are feeling disruption. This is a different kind of rallying cry. I believe it requires business leaders to rethink their organizations, the marketplace and engagement with customers.
Many traditional marketing and distribution channels have essentially disappeared as consumers have taken refuge at home. In my 20-plus years running a marketing agency, I’ve never seen such incongruity in terms of sales performance. Some businesses are being devastated by sales dropping off a cliff, while others are watching their sales double weekly and beating sales records daily.
If you look at the current landscape, organizations with strong digital businesses and direct relationships with their customers are faring the best — and they’re well-positioned to see those new customers stick with them as we emerge from this tragedy. As a result of the pandemic, consumer shopping habits have changed. According to one company’s survey, many consumers across every demographic are shopping online more often. The elusive baby boomers are one notable group — 23% of them have increased their online shopping. So just because your physical retail sales have come to a halt, that doesn’t mean the same for your direct-to-consumer (DTC) sales.
When a consumer makes most purchasing decisions today, e-commerce is front and center. I believe this is not a temporary change and that when the pandemic ends, e-commerce habits will have fundamentally changed how consumers engage with your business.
Economic crises are normally not times to be investing in a new customer communication channel. This one is different — because your market has shifted beneath your feet. If there’s good news in any of this, it’s that the environment for growing digital relationships with your customers has never been better. Here are some tips for doing that — assuming you already have an e-commerce engine in place.
Invest In Paid Media
To acquire new online customers, invest in profitable paid media in the form of search, social, programmatic, digital video, linear television, audio and more. Media impressions are extremely affordable right now. Many large brands and smaller retailers have pulled their media dollars, creating massive opportunities for DTC brands. It’s been widely reported, for example, that Facebook ad rates have fallen as a result of the pandemic. And according to our in-house tracking system, the cost per thousand impressions (CPMs) for our clients have dropped an average of 24% to 50% across the board in linear TV, paid social, digital video and display ads since February, which means lower customer acquisition costs (CAC).
Test And Grow Video And Audio Strategies
These two media channels have the highest market reach, according to my agency’s analysis of ongoing media consumption surveys conducted by YouGov and are now effectively “on sale.” They include traditional TV, digital TV (Tubi, Roku or YouTube), podcasts, streaming audio and more.
My advice to test and grow your video and audio strategies is to first evaluate current media consumption patterns and pricing to determine that you are placing media in the right place to reach your target consumer given current media behavior. Then, develop a measurement plan to determine what success looks like for you.
Measure And Optimize Your Paid Media Channels
Today, you can rapidly evaluate individual media channels by looking at daily “signals” like web traffic, email signups, app downloads and paid search activity. All of this data provides directional reporting so you can quickly optimize your advertising investment. You can then validate these signals with statistical modeling for a more accurate ROI, as well as look at your business’s overall sales lift week over week.
The best way to validate your daily signals through statistical modeling is to engage with a marketing analytics partner to perform media mix modeling to analyze the performance of your paid marketing channels. There are many third-party companies that do this. For example, we have developed our own technology through our sister company. All of our models are based on linear and nonlinear regression.
Make Your Creative Messages Current
This means showing fewer images of group events and people shaking hands and instead showing people practicing social distancing and communicating through video calls. Our recent survey of more than 750 adults around the country revealed that most consumers expect advertisers to “take the situation seriously and use reliable and reassuring messaging.” The same sentiment of reliability was echoed by 89% of respondents in a recent survey by Twitter, while 70% believe that “brands should boost positivity.”
To ensure that you’re rolling out the right messaging, survey current customers to ask what they think of various messages you’re considering. Social listening can also provide insights into current consumer sentiments and how they are reacting to other brands’ messaging.
You can significantly grow your online business, but you have to act quickly. As a business leader who is witnessing how DTC brands are surviving and even thriving, I urge you to spring into action. Inspire a call to arms within your own organization to bolster your business and your people by significantly growing your direct digital customer relationships. You can save jobs and help your local communities. When we get through this, you can also have a far stronger, more resilient and agile business.
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