Proof of Concept: What It is and How to Do It Right
Before developing an idea into a product, there’s a crucial step that every business must take: executing a successful proof of concept. Learn more.
Strong, working relationships are the key to the success of any team, no matter the arena. The Chicago Bulls didn’t win six NBA titles without Michael Jordan and Scottie Pippen. Without Lennon and McCarthy working their song-writing magic, The Beatles would’ve never revolutionized music and culture. The fact is that partnerships are one of the foundational pieces of any successful team or organization.
This idea has influenced the relationship between us and the direct-to-consumer (D2C) brands we work so closely with daily. It’s been one of our top priorities to be a service for our customers and to continue to bring value to them beyond the typical transaction relationship that most brands have with their customers. As a result of forging bonds with our customer, we’ve continued to expand our understanding of not just the world our customers operate in, but the marketing world as a whole.
Over this past year specifically, there’s a lot that we learned from working so closely with these D2C brands. Here are a few of our top customer insights from 2019 that we recommend incorporating into your campaigns and strategies in 2020 and beyond.
Building brand awareness and driving website traffic is one thing, but persuading on-the-fence customers to make a purchase is another thing entirely. Doug Ratner, the CEO and founder of I'd Rather Be With My Dog, is a social media savant and has implemented a successful social strategy. In just a few short years, Doug has garnered over 281,000 followers on Instagram alone. Converting that social influence and customer interest into revenue was where he was stuck. Still, from his experience in social, he knew he had to find a more engaging way to interact with website visitors.
I'd Rather Be With My Dog's e-commerce store is hosted by Shopify, which allowed the D2C brand to use different ad types and create a more personalized experience for customers. The marketing team decided to launch campaigns featuring dynamic ads, which are ads that feature products in abandoned shopping carts, previously-viewed products, and new, relevant recommendations. Pairing his ads with smart segmentation strategy, helped Doug improved his return on advertising spend (ROAS) by 3.4x.
Recommended Reading: Critical Best Practices for Dynamic Remarketing Campaigns
For D2C brands looking to expand their customer base, it can be very tempting to cast a wide net. However, launching an ad campaign without a proper segmentation strategy can waste most of a marketer's budget. Delivering ads to audiences that aren't ready to complete a purchase, or worst yet, not interested at all, can turn off would-be customers. A lot of Hawaii Shark Encounters' success can be attributed to knowing which customers to target.
Steve Jordan, founder and CEO of Hawaii Shark Encounters, launched campaigns for people who had been planning trips to Hawaii. This meant targeting those who have visited any Hawaiian vacation, tourist, or accommodation websites. From there, his marketing team served video ads to these potential customers. Steve's strategy paid off: he lowered cost per thousand impressions (CPM) by 69% and cost per acquisition (CPA) by 68.8%. As a result, digital has become the D2C brand's most effective channel — motivating him to move 70% of his print budget over to digital marketing.
Recommend Reading: Falling in Love With Customer Segmentation
Keeping current customers happy and engaged isn't just the right thing to do; it's great for a business' bottom line. According to McKinsey & Company, 70% of purchases are decided by how customers feel that they're being treated. The more connected a customer feels to a brand, the more value they bring over time (it costs five times more to convert a new customer than keep a current customer). Joe Van, founder and President of Out of Regz, has made keeping his customers happy his top priority.
Joe has built the D2C brand with one audience in mind: the military and first responders community. All of the D2C brand's new initiatives, which are at different stages of development, are geared towards strengthening their bond with customers. For example, they're currently developing a customer loyalty program that allows customers to accrue points after each purchase, which can be used to donate to various organizations related to the rehabilitation of veterans. Joe and his team are taking a long-term approach to build relationships with customers and increase CLV.
Recommend Reading: D2C Brand Spotlight: Out of Regz
At this point, it's common knowledge that brand awareness is one of the most critical steps in any marketing strategy. But for D2C brands with an established customer base, it can be challenging to introduce a new product to market and not have it ignored by current customers. Lorena Navarrete, the e-commerce manager for Dermalogica, found herself in a similar situation and then some.
Tasked with improving brand awareness, engagement, and customer acquisition metrics as well as introducing a new product, Loretta thought it be best to utilize video ads since they've been known to be one of the most effective ad types. After including video in their marketing mix, the D2C saw better engagement rates overall.
Recommend Reading: Guide to Building a Video Marketing Strategy
Last updated on August 16th, 2022.