What are the benefits of DTC?

Taking a step back, what are the benefits of DTC?

In the simplest terms, it means that brands can have their own data and understand the appearance of their customers. With the cost of acquiring traffic rising, having the above data can not only directly interact with customers and create a profound brand experience, but also have the opportunity to understand customers. Provide feedback on products to modify the products to achieve greater success, thereby increasing the LTV customer lifetime value.

In addition, it is to reduce dependence on platforms or channels.

Shopee is very popular in bulk sms master Taiwan, and it is also a platform that many small and medium-sized sellers rely on to make a living. However, as long as the handling fees increase, it will eat up the sellers’ profits; or it is a food delivery platform, although it can bring benefits to catering companies. To bring in extra income, we must also pay close attention to cost allocation, so as not to just quench our thirst by drinking poison, making short-term profits and ruining the long-term.

And when the cost of obtaining traffic is high, brands usually have two approaches: one is to find cheaper sources of traffic (such as TikTok), and the other is to invest in customer loyalty operations (such as membership) to find ways to increase the lifetime value of customers. .

To manage customer loyalty , there are many different MarTech tools for various fragmented customer consumption journeys. How to make good use of these tools has become the key to brand success.

For example, in order to strengthen DTC, the sports brand NIKE, which reluctantly ended its cooperation with Amazon and Macy’s, has also transformed digitally by using tools or directly acquiring data companies. NIKE has used more than 30 to 40 tools. In the end, DTC’s e-commerce revenue accounted for nearly 40%, and according to foreign media predictions, DTC’s business has the opportunity to account for 60% of NIKE’s revenue in 2025.

The trouble of the marketing manager: How to allocate the budget?

Even NIKE needs to use multiple tools to deal with customers’ consumption journeys at different stages. For CMOs of small and medium-sized brands with insufficient budgets, they will naturally worry about budget allocation.

Xue Jin also mentioned that the reason why leading brands are ahead can be found from the “difference in expenditure”. He quoted data from business management expert Mark Jeffery, who published “The Era of Quantitative Marketing”, which showed that compared to the lagging group, the leading group of brands spent more on brand awareness, customer rights, and marketing infrastructure; the lagging group spent more on brand awareness, customer rights, and marketing infrastructure; The group spends more on market education and “demand creation” activities such as discounts, advertising, and promotions.

Especially investment in marketing technology, which is estimated to account for 25% of the overall expenditure, will be the most inevitable step now. How to choose among numerous marketing tools and discover insights is a process in which brands must keep trying to find their own answers.

Xue Jin concluded by quoting Alexander Yeezys Shoes Thiel, a partner at McKinsey & Company: “We believe that there are two types of brands that are experiencing crisis. One is small brands that do not have enough capital and cash to invest in DTC and digital transformation plans; The other is a large enterprise that lacks agile culture and changing thinking.”