Personalization

Transitioning to D2C: How to get started in an increasingly customer-centric world

What is direct-to-consumer marketing?

Direct-to-consumer (also known as D2C or DTC) is all about how companies are connecting with their targeted audiences.

Decades ago, many consumer brands had to rely on a middle-man to get their products in the hands of their customers. With high-speed internet and overnight shipping, everything changed. Enter D2C, who bypassed retailers to sell directly to their target audience. Some D2C companies that have been making waves over the past decade include Warby Parker, Dollar Shave Club, Casper and Glossier.

D2C marketing takes a similar approach – forming the direct relationship with your customer, gathering intelligence on your customer, or selling directly to them.

Some industries that are now moving in to D2C marketing in full force include lower-cost CPG products, who always struggled with getting the intelligence they desired from their retail partners, as well healthcare insurance and property & casualty insurance whose industry has been shaken up by new entrants.

Why is D2C particularly important now?

D2C marketing gives you a direct line to your customers, and in today’s personalized world, it’s more important than ever. A recent Statista survey found that 90% of U.S. consumers find marketing personalization very or somewhat appealing.1 And SmarterHQ found that 72% of consumers say they will only engage with personalized messaging.2 Why is personalization so important to consumers? Forbes speculates it’s the “Amazon effect.”3 Amazon’s algorithms allow them to know everything about their customers, which means they can create a customer-centric marketing strategy to draw the customer in. Personalized messaging and tailored product recommendations creates a sense of intimacy with the customer, which in turn, keeps them loyal.

In a world of almost limitless consumer choice, creating brand loyalty and shorter and easier paths to purchase should be among a company’s chief concerns as we prepare for 2022 and beyond. That’s where D2C marketing comes in.

Why start the transition to D2C marketing?

There are many benefits to taking a D2C approach to marketing. It helps companies learn who their customers are so they can tailor their products and services to truly fit their needs. The more knowledge companies have on their customers, the better they can tailor the customer journey, personalize recommendations, offer compelling sales and deals, improve the overall user experience, and design faster and easier ways to purchase your product or service. If consumers have positive interactions with your brand, the more likely they are to become, and stay, customers.

In other words, knowledge is power. And D2C marketing delivers knowledge.

Here are 3 steps to get started on your D2C marketing journey:

1. Strengthen your first-party data

According to Google and Econsultancy, 92% of leading marketers said using first-party data to build an understanding of their audience is critical to growth. First-party data is your key to deep product and services insights, behavior and demographic-based targeting, data-driven cross-selling and effective remarketing efforts.

Some ways to strengthen your first party data include:

a. Requiring users to login: this is the best way to ensure your first-party data remains clean. Users can be prompted to update contact information periodically to keep your records accurate.

b. Enforce a CAPTCHA: implementing a CAPTCHA on your signup page can protect both you and your subscribers from malicious attacks by identifying and blocking bots and spammers from entering your database.

c. Implement a Confirmed Opt-in: a confirmed opt-in process is an effective way to not only ensure registrations are legitimate but also safeguard against incorrectly entered data – both on purpose and by accident.

2. Learn more about your customers through third-party data

Now that your first-party data is in fighting shape, combine it with powerful third-party data to gain a complete view of your customer.

Before putting a D2C marketing strategy into effect, ensure the accuracy of your first-party data through a rigorous cleanse. Data cleansing is the collective process designed to keep data accurate and clear of corrupt or incomplete records. Data cleansing consists of data hygiene, augmentation and enhancement, and duplicate identification. Working with a solution provider, you can de-dupe records, verify phone, email and physical addresses, and fill in empty form-fields to ensure you have the data you need to contact your customer.

In addition to being used to cleanse your current data, third-party data fills in the knowledge gaps you have on your customers’ behaviors and needs. While first-party data is comprised of your interactions with your customers, third-party data takes the totality of their tracked online behavior into account in order to provide your brand the depth and breadth of data you need in order to know what drives your audiences. You will need to find a third-party data partner to help with this. [Check out our worksheet to help you choose a provider that’s right for you.]

For example, Data Axle, a third-party data provider, has access to over 16+ billion data points across an audience of 320+ million consumers and 15+ million businesses. This data provides insights on demographics, values, interests, and behaviors to improve personalization through segmentation, personas, predictive analytics (and more).

3. Use custom modeling to find your audience

Finding and engaging the right audience is key. By using predictive modeling based on a desired set of behaviors, you can begin to attract new customers and engage current ones. Partners such as Data Axle, can create custom audience segments that reflect your highest value customers and allow you to engage with consumers who are most likely to be interested in your products.

Modeling doesn’t only help you find your audiences; it helps you learn how to talk to them. In our next D2C blog, we will expand on personalization techniques that will help your message resonate with audiences.

Now, you’re ready to embark on your D2C marketing campaign. Getting your data in fighting shape is the foundation that the rest of your campaign will be based on.

Need some help? Contact us to learn more about how to get started in D2C.

Natasia Langfelder
Content Marketing Manager

As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.

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