I have worked with over 30+ DTC brands and the following are the factors that Can Harm a Direct-to-Consumer (DTC) Brand: 1. Excessive focus on customer acquisition and narrow marketing funnels. 2. Dependency on a single marketing channel (e.g., Meta, as observed in 2021). 3. Relying too heavily on one sales platform such as Amazon or Shopify. 4. Over-dependence on venture capital funding. 5. Recruiting numerous senior executives from traditional brands without considering their fit. 6. Hiring an abundance of junior marketers specializing in one platform like Facebook. 7. Lack of defined budgets and forecasts. 8. Prioritizing Return on Ad Spend (ROAS) over Return on Marketing Investment (ROMI). 9. Fixating on incremental gains in marketing campaigns rather than focusing on the broader aspects of brand, product, and distribution. 10. Emphasizing tactics over overarching strategy. 11. Neglecting aspects of supply chain management, demand planning, and inventory financing. 12. Inadequately preparing for the launch of retail stores (e.g., ShopDrops). 13. Absence of Objectives and Key Results (OKRs) and accountability mechanisms. 14. Failure to build and maintain a customer database. 15. Neglecting to nurture the customer base through lifecycle marketing strategies. 16. Lack of understanding regarding contribution margin or Customer Lifetime Value (CLV) versus Customer Acquisition Cost (CAC). 17. Operating with a cultural mindset typical of larger corporations. 18. Relying excessively on external agencies to solve business challenges. 19. Spending excessive time boasting about minor achievements rather than focusing on profit growth. These pitfalls should be avoided at all costs. What other factors would you add to this list?
Arti Chaudhary’s Post
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Are you measuring the incremental return of your campaigns across all channels?
Chief Strategy Officer at Power Digital. Marketing ROI, incrementality, and strategy for hundreds of brands.
Marketing drives purchase intent, it does not drive purchase behavior. You can't force a customer to buy in the way that YOU want them to. Instead, they prefer to buy in the way that THEY are most comfortable with. We see this reflected in the 1000+ incrementality experiments we've run at Power, and the tens of thousands of models that we run for hundreds of brands. Here's what happens: • A brand runs digital media, like Meta or TikTok • The brand measures the revenue lift on DTC • But, they ignore the lift on Amazon or third party retailers • They assume the marketing is ineffective Here's how we help them instead: • We run an incrementality test on media • We measure the TOTAL rev impact across all channels --- DTC (such as brand.com) --- Amazon --- Third party retail (in store and online, if available) • We report out on the combined results Most of the time we see roughly an equal incremental contribution from any paid media to ANY revenue source -- even if that marketing is "designed" to drive people to one particular revenue stream (such as performance marketing with CTAs to the DTC website). For example, we see all the time: • Incremental Return On Ad Spend (iROAS) -- DTC: 1.25x iROAS -- AMZ: 1.00x iROAS -- 3PR: 1.50x iROAS • Total iROAS = 3.75x That's 3x what the incremental lift showed if just measuring DTC only. If the brand needs a 3x iROAS to be profitable (after discounts, wholesale margins, marketing costs, etc) then if they just looked at any one channel in isolation they'd view it as a failure. But when viewed collectively, not only is it achieving their goal, but it is exceeding it. This changes the optimization from "cut the channel" or "improve its efficiency" to "how can we spend more?" Get out of the addiction of click-based marketing. You can't drive people to take action. All you can do is make them psychologically interested, and THEN they will move on and buy where they want to. Multi-rev stream brands: reach out and our team can help you start getting a better grasp on the impact of your media. #incrementality #measurement #attribution #marketing
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“But when viewed collectively, not only is it achieving their goal, but it is exceeding it. This changes the optimization from "cut the channel" or "improve its efficiency" to "how can we spend more?" Prime example of perspective and how a shift in perspective can make all the difference! We work with our clients to understand incrementality and help them get a stronger grasp & understanding of their media dollars to their overall business, often resulting in some serious coin! 💰💡
Chief Strategy Officer at Power Digital. Marketing ROI, incrementality, and strategy for hundreds of brands.
Marketing drives purchase intent, it does not drive purchase behavior. You can't force a customer to buy in the way that YOU want them to. Instead, they prefer to buy in the way that THEY are most comfortable with. We see this reflected in the 1000+ incrementality experiments we've run at Power, and the tens of thousands of models that we run for hundreds of brands. Here's what happens: • A brand runs digital media, like Meta or TikTok • The brand measures the revenue lift on DTC • But, they ignore the lift on Amazon or third party retailers • They assume the marketing is ineffective Here's how we help them instead: • We run an incrementality test on media • We measure the TOTAL rev impact across all channels --- DTC (such as brand.com) --- Amazon --- Third party retail (in store and online, if available) • We report out on the combined results Most of the time we see roughly an equal incremental contribution from any paid media to ANY revenue source -- even if that marketing is "designed" to drive people to one particular revenue stream (such as performance marketing with CTAs to the DTC website). For example, we see all the time: • Incremental Return On Ad Spend (iROAS) -- DTC: 1.25x iROAS -- AMZ: 1.00x iROAS -- 3PR: 1.50x iROAS • Total iROAS = 3.75x That's 3x what the incremental lift showed if just measuring DTC only. If the brand needs a 3x iROAS to be profitable (after discounts, wholesale margins, marketing costs, etc) then if they just looked at any one channel in isolation they'd view it as a failure. But when viewed collectively, not only is it achieving their goal, but it is exceeding it. This changes the optimization from "cut the channel" or "improve its efficiency" to "how can we spend more?" Get out of the addiction of click-based marketing. You can't drive people to take action. All you can do is make them psychologically interested, and THEN they will move on and buy where they want to. Multi-rev stream brands: reach out and our team can help you start getting a better grasp on the impact of your media. #incrementality #measurement #attribution #marketing
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