No one says this explicitly, but when a company adopts a direct-to-consumer model, they’re really adopting a data-to-customer model.
Account information, order information, purchase histories . . . the data that underpins a relationship between a brand and its customers is vast. It’s also incredibly important to the long-term growth of the business. Before the direct-to-consumer (DTC) model emerged, however, much of that data was at least one step removed from the brands that could have benefitted from leveraging it.
When companies sell exclusively through larger retailers or via wholesalers, for example, those intermediaries often get first access to customer data. This meant the brand’s role was largely marketing and providing products to be placed on a shelf or in a store aisle. Though some data gets passed on, the retailers and wholesalers are responsible for delivering most of the customer experience (CX).
This all changes with the DTC model, and potentially in the best possible ways. Instead of simply looking at it as a way to “cut out the middle person,” the most successful brands recognize it as an opportunity to deepen customer relationships by enhancing experiences at every state of the customer journey.
A DTC can spend more time, for instance, thinking about the transition customers will make from the moment they discover their brand to when they begin actively considering a purchase. They can begin to identify and remove friction that slows down transactions. They can also streamline workflows such as providing customer service, and using the data collected there to address common pain points.
This may not require hiring a chief customer officer or setting up a designated CX team. Instead, DTC brands often work to make CX a cornerstone of their organizational culture, so that everyone across the team recognizes the importance of putting their needs first.
If you’re not already convinced that DTC and CX are inextricably linked, consider the following:
1. The DTC model is perfectly designed to meet digital-first customer expectations
Plenty of DTC firms have set up pop-up shops or physical stores, but they tend to be born – and continue to thrive – online. In doing so they are responding to what customers are showing they really want.
Even if they continue to enjoy in-person shopping, for example, today’s connected consumer is extremely savvy. They will be quick to take out their phone and compare prices and other features online with competitors. They might also prefer to do online research before leaving the house to shop. Either way, they want options, and DTC firms can ensure they show up in those search results.
For many purchases, customers may prefer not to make a trip to a store, and DTC firms can often provide a fast, fluid experience to place orders and have them delivered straight to their homes.
2. Running a DTC basis opens up greater potential for personalization
No one wants to walk into a large store (or navigate through a web site) and feel ignored. They want to be treated as though they are valued and recognized for the individuals they are.
DTC should stand for data-to-customer in part because the data you gain is key to serving customers in a one-to-one fashion. Having direct access means you’re not working with out-of-data or possibly inaccurate data passed on by an intermediary.
Looking at what someone has ordered in the past, for instance, you can use technology to cross-reference complementary or similar items to make smart recommendations for their next purchase.
You can also use technology to communicate with them on a first-name basis in the channels they prefer most. These can include e-mail, text message, social media and more.
3. The DTC model accelerates the ability to respond to customer needs
Consumers don’t want to wait on hold with a contact center every time they have a question or a complaint. They want answers, and DTC firms can build the ability to give them almost as soon as they’re asked.
Using a chatbot, for instance, DTC firms can be open for customers 24/7, automating the most common troubleshooting and customer service tasks. Some DTC brands take it a step further and set up customer portals or communities that let them take a self-help approach using explainer videos and tutorials.
DTC firms can also provide the same flexibility in terms of digital channels they use for marketing to take questions and complaints from their customers. That’s a lot better than leaving a contact center as the only option.
4. The DTC model can support a broader scope of loyalty programs
Buy one, get one 50 per cent off. Buy 10, get one free. These are some of the most common ways companies have enticed customers to stay loyal to their brand. DTC firms can get more creative using the data at their disposal.
As they learn more about their customers interests, challenges and preferences, for example, a loyalty program could be based on more than a discount or promotion. They could provide invitations to VIP-style events, inspirational content and first look at new products that are being added to your catalogue.
5. The DTC model means you can help customers become subscribers
Many customers suffer from “decision fatigue.” In other words, they have many purchases to make and only a limited capacity to give them all the time and attention they need. It can be helpful to have some of their shopping offered via a “set it and forget it” approach – otherwise known as subscriptions.
A good subscription service doesn’t only automate the process of sending out products. It can also create a rich, curated experience. You might send subscribers a box, for instance, with suggested items based on the data you’ve collected about their tastes. This adds an element of discovery and genuine surprise and delight when they get a package from you.
DTCs are not a trend – they’re a viable business model because they can allow entrepreneurs to build better CX with all the capabilities that digital technologies allow. There’s never been a better time to get started.
