Are you betting on the right DTC strategy?

For those of you that have been in the business long enough, you realize that doing business is a little like gambling. As an entrepreneur, you are constantly placing bets all day every day on which market, product, and sales strategy to pursue.

You have a hypothesis about what might work and you have prior experience that you are pulling from, but it’s still a bet that may or may not work out in the end. Literally every aspect of business works like this.

Making a new hire is a bet, deciding to run paid ads on TikTok vs Meta is a bet, choosing your manufacturer and supplier is a bet, focusing on DTC vs retail is a bet, etc. Each of these bets have implied risk and then some associated odds of success. And no bet is ever guaranteed to pay off because there are always both known and unknown factors outside of your control.

When I think about winning in the world of business and DTC, I think about having to have all of the core elements and strategy align in such a way so that you can win the ultimate jackpot at the end.  The jackpot, to me, is a profitable and sustainable business that generates consistent free cash flow each year at a healthy scale.

So when you pull the lever on a slot machine and you get 2 hearts and 1 other random symbol, you lose, but if you get all 3 symbols to line up, you win. It’s really about getting everything to align.

And generally, I think the most basic symbols that you need to align are:

  1. Your product
  2. Your positioning & audience
  3. Your offer and price point
  4. Your ad creative
  5. Your email popup/First party data capture
  6. Your email and SMS follow ups
  7. Your content and brand

So in today’s post, I’m going to share some of my thoughts on all 7:

The Product

Everything in business starts with having a good product. A good product to me is:

Your positioning and audience

Column 2 inside your slot machine is your positioning and audience.

Your “positioning” is basically how you describe and showcase your product and how you decide to brand your product compared to the competition. For example, Eight Sleep could say “A temperature controlled mattress” or they can say “The Tesla of Mattresses” which immediately creates a certain brand perception in the consumer’s mind. They could also say “It helps you sleep better.” Or, they could say, “The intelligent system that gives you up to one more hour of sleep every night.”

This is all strategic positioning and helps them elevate the brand. But your positioning isn’t just your copy. It also includes your product design, website and landing page design, your ad creative, etc. It’s how you, as the founder or marketer, decide to showcase your product to the world.

This is another thing that I really think brands should spend more time working on to get right. Sometimes the exact same product with different copy or different positioning in an ad or landing page will convert 5x better — it can literally be the difference between a 2% CVR for a landing page, and a 8% CVR. It’s one of the strongest levers that you have to actually sell what you make.

Your audience

Who are you trying to sell to and are you matching your positioning to that audience?

Now I do believe that this is a little bit of a guessing game in the beginning, if you don’t come to market and fully have a specific audience for this. Sometimes a product launches, let’s say a beauty brand for acne prone skin, and it’s easy to know who to go after.

However, when you have something like a greens powder or a weighted blanket, and you’re trying to figure out who your customer is, it’s a bit more complicated. You need to test multiple variants and angles to see what actually performs and then use that data to help you decide on which audience cohorts to pursue. Then once you have found product/audience fit, you need to double down on the positioning and messaging here.

This means that if you have found out that your weighted blanket sells best to 47 year old moms in the midwest suburbs, you should begin to update how you are talking about your product to them, update your content to reflect what they find aspirational, update your email flows to speak accordingly, etc.

You can also create funnels and flows that are conditional, meaning, when someone gets to your website and fills out your pop-up that asks why they’re on the supplement brand’s website, they get directed to a landing page, collections page, or product page based on what they answered.

This is all part of the art and science of great marketing that makes brands work. As you grow, your proficiency of conditional and personalized content is what will allow you to keep scaling efficiently, among other things.

Your offer and price point

To me, your product is what will get them interested, but your specific offer is what will get them to click and convert.

Most of the time, the offers that work best have some type of discount or risk-reversal involved, like cashback or a valuable gift with your purchase. So 10% off as your offer may push someone over the line, or a 60-day money back guarantee (or a happiness-gaurantee) is a risk reversal/offer that can help someone convert.

Additionally, you have to nail the pricing to make your business make sense. Pricing is not an emotional decision. You can’t just say that I think this product should sell for $80 — that is totally wrong, unless you’re really in it to sell at $80 for something that should be $19. Yes, you need to respect the product you’re putting out into the world, and the benefits that comes with it. But you also need to be respectful to the competitive set of brands you’re playing with. Furthermore, you need to make sure there is enough in there for you to make money, after advertising, COGS, overhead, etc.

Again, if your business is not generating a profit and has no viable path to profitability then it’s going to be impossible to sustain. You can also do market research to better understand your competitors and how they are pricing their products but ultimately the unit economics have to work for your specific business.

When you see someone else’s price, you have no idea what their unit economics are. They could be priced lower than you and losing money on every order — so don’t also just take competitor pricing at face-value. You really never know. So you have to do this math and price your product in such a way where you will generate a profit.

Your ad creative

Now that you have found your product and refined your positioning and pricing, the next lever to get right is your ad creative.

Your ad creative is what consumers see first when interacting with your brand. This is the media that is going to get them to fall in love with your product or service and get them excited to click and buy from your store.

For ad creative, it’s all about choosing the right format and hook. For formats, you could be running video ads, static ads, animations, UGC, etc. There are also many subset creative styles within each of these formats that you could pursue. For example, your static ads could be comparison charts, before and afters, product in use, testimonials, catalog ads, meme ads, etc. Your video ads could be polished studio shoots, b-roll with voiceover, greenscreen with commentary, UGC ads, founder story ads, product in use, unboxings, etc.

If you’re a brand that needs help with running paid ads, we have an extremely talented in-house paid media expert, Sai. If you’re interested in working with him, book a call with him here.

The best practice is to test multiple formats, angles, and channels to see what works best for you. And the main thing to get right again is the copy and hook. The first few milliseconds of someone interacting with your ad is really what matters most. In the industry, we famously call this “thumb stopping” content. Because the reality is, you can’t sell anyone anything if you don’t have their attention first. You have to get them to stop in the feed! Focus on the hook and getting the click more than anything else.

Your email popup/first-party data capture

If you don’t get a sale from your ads and traffic, the next best thing that you can get is someone’s name, email and SMS number. In marketing, we call this first party data.

Emails and SMS numbers have intrinsic value. Once you have someone’s email or SMS, you can continue marketing to them with new offers and campaigns until they convert forever (or until they unsubscribe).

For many DTC brands, email and SMS still make up a large percentage of their total revenue. I typically see email and SMS being anywhere from 15-35% of net revenue for some brands. I truly can’t understate how important it is to get this info.

Your Email and SMS Follow Ups

Once you have someone’s email and SMS number, it’s what you do with it that matters most. I think many marketers would be shocked by just how many businesses have email lists but drastically under-utilize them as assets to sell more.

If you have an email list, you need to have a strategy for consistent and constant comms. The best DTC brands in the world send multiple emails per day, let alone multiple emails per week or month.

If you are only sending one email per week, that’s not enough. Just think of every campaign as a potential opportunity to sell, entertain, engage, or retain your prospects or existing customers. Not every email has to be a sales pitch but there should still be a constant flow of information, offers, and educational content coming from your brand.

As far as emails, the very first thing to setup is the post purchase confirmation email.

To set this up, you just have to connect your Shopify store to Klaviyo to make it happen, or you can just customize it within Shopify itself.

Basically, anytime someone orders, they should receive a branded email from you immediately that includes:

When their order ships, make sure they get an email with another personalized intro, followed by the shipping carrier information, and an easy link to track the package. Majority of your customer service complaints will come from people who say, “Hey, when does my package arrive?” If you can make that clear up front, you will save yourself a lot of tickets.

The next set of emails that you need is an automated welcome flow. This is what folks should receive if they gave you their email whether or not they actually bought from you.

Having this setup properly means that you can drive sales in your sleep which is the ultimate goal of any business owner. It might take a few weeks(or even over a month) to workshop the copy and design of these emails and perfect these flows.

Still, this alone can dramatically increase your engagement and revenue without you having to spend another second convincing someone to buy. It’s all automated and once you build it, test it, and realize that it’s working, it can just run! The other thing I would include here is the founder story email.

After your welcome flow (or maybe somewhere within it) you should try a founder story email. This could be designed in Klaviyo or it could be a really simple plain text email from the founder so that it feels more real.

Within this email, you want to share the story of why the founder started this brand and what they hope to achieve with. Explain their personal connection to the brand and why it matters. Remind them that you are still a small business and thank them for being a part of your business journey. Consider offering a custom discount code like “Founder10” for 10% off to drive another sale.

After you get these done you should consider adding:

And all of the other fun things that you can do with email campaigns.

If you’d like to work with me to build these flows up (design, copywriting, pop-ups, etc.), submit this form and I’ll get back to you shortly.

Most of this also directly applies to SMS although the messages will be much shorter and you won’t have the same canvas for design and images that email does. And the last piece of the puzzle is your brand and your content.

To pull it all together, the last piece that you need to get right is your brand and your content. Your content is going to be the always on, evergreen material that keeps you top of mind for your consumer beyond paid ads.

You should also treat your organic content as a testing ground for what creative concepts might resonate with your audience that could be used as paid ads later on. In general, it’s much cheaper to test 100+ organic social posts then run 100 different creative assets in ads to see what performs. There is so much learning from organic that brands can do.

As far as content, I always think brands should start with editorial and video. Editorial is the most straightforward. IMO, you should have blog posts:

The next medium I would be creating for is video. And a lot of this can be the same content but in a new medium for folks who would rather watch a short clip than read your blog.

This means you should have your origin story on video, you should have videos on your benefits and value props, product info and sourcing, answers to FAQ questions, etc. All of the same things. The next thing I would do is start hitting up native creators to make UGC style videos and reviews.

I could probably write another 10 pages on all things organic content but because I have already written 9 pages for this week, I’ll stop here!

If you have any questions for me, feel free to ask here.

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