It’s a scenario that’s played out countless times for consumer goods (CG) companies this year: Despite skyrocketing sales (cleaning products or toilet paper, anyone?), there’s no actual relationship with consumers. While consumers may buy whatever is available at the time for products in short supply, consider what happens when they’re given a choice. Quality matters. Price matters. But personalization that builds a relationship and feels valuable is the true differentiator that stops your customer from choosing a competitor.
There’s no doubt CG executives know how important this is. A Salesforce survey of 500 global CG leaders conducted in 2019 showed that 99% were prioritizing direct-to-consumer (D2C) initiatives. Then why are brands still thinking that no one will buy a $3 item from us when they can get it from the grocery store? Just ask the Dollar Shave Club, as they’ve successfully debunked this myth. Sixty-nine percent of their customers come back and transact in the first month after they initially make a purchase, and one third remain subscribers even 24 months out.
A D2C strategy is not merely about creating a new channel to sell products. It’s creating the infrastructure that will power intelligent decision making for the business. Why? Because companies that have a direct relationship with consumers understand what shoppers want. Access to this data can inform everything from product decisions to retailer relationships, and even unlock new consumer segments.
Let’s walk through how to set your foundation to gain value from first-party data by going D2C.
Get to know your end consumer
Snack bar brand KIND built meaningful relationships with loyal customers while uncovering new segments through a D2C ecommerce site. At the heart of their success was using the channel to learn what consumers wanted and adapting to meet new needs, including by offering a subscription box service that allowed them to test new products.
Before you begin, ask consumers what they want, what they need, and how they feel. To do so, use a mix of direct queries — for example, consumer surveys — and indirect queries, such as online browsing and search behavior or customer service data. Marry this with data from retail partners for a deeper understanding of your consumers.
Analyze your media data to uncover insights. What types of products are consumers looking for? How are they searching for them? Are there patterns that exist that you’ve never seen before?
Based on your learning, you can build a communication plan for further data collection. Digital advertising and social media targeting can all help here. Test your plan first on internal employees, which is a low-stakes option to gather feedback. Then, fine tune your approach and launch it to different consumer segments.
Personalize your relationship
Consumers expect a give-and-get from the brands that they interact with. Eighty-seven percent of consumers say it’s important to purchase from a brand that “understands the real me,” according to an Accenture survey.
Providing immediately-relevant experiences that resonate and drive sales comes down to data. Yeti did this with a single point of customer information and order history. The brand was then able to personalize interactions that drove conversion 27%.
To turn individual preferences into opportunities, a single source of truth for data is key. Artificial intelligence (AI) also comes into play. AI can help you measure each action, use intelligent analytics to understand program efficacy, and uncover avenues for continued improvement. Based on these insights, you can adapt your channel, your message, and your content to personalize the experience for consumers at scale. (Learn more about how to get started with AI with this learning module.)
Engage consumers at every micro-moment
There’s no one-size-fits-all approach to consumer engagement — your team’s creativity and business needs will lead the way. But there are some basic principles to keep in mind.
Each micro-moment — from the start of a consumer’s search all the way through purchase — should lead to a different call to action. Regularly review your personas. Look for engagement statistics that indicate if your personas are relevant. Does your communication plan account for each step in the consumer journey? Test, repeat, test, repeat, and go back to the drawing board if need be. Identify if there are any points in the journey that can make or break the experience.
A/B test content and offers regularly, and use tools to personalize the customer journey at scale. Conagra’s marketing team uses data consolidated across digital touchpoints to make smarter decisions based on consumer behaviors and actions.
The point is that the more you know about your consumers, the more you’re able to offer an experience that meets them where they are. That’s the true benefit of a D2C channel — and how you gain that competitive advantage. When you invest in the consumer relationship, you build brand equity and value, all with your owned data.