Traditionally, huge businesses have been built by spending huge amounts on influencing the consumers via ads and having a massive shelf share by investing greatly over the sales forces. As the brands grew in reputation and the cash started flowing in, it was relatively easy to send new and smaller businesses packing. It was an era of low-engagement and low involvement with the consumer. The few big brands remained invincible.
But consumer behavior has undergone a sea change in the recent times. The landscape of business practices have shifted beyond limits that were not imaginable a few decades earlier. As customer behavior changes rapidly than ever before, businesses are putting huge effort, time, and money to gain more insight into changing their marketing strategy to suit the needs and want of the consumer. Evolving technology and the rise of the Internet have made direct marketing a reality, thus cutting back huge advertising costs.
The objective of any marketing strategy is to engage with every potential customer. For a very long time it was considered impractical to try and influence individual consumers. But consumer expectations have grown and consumers these days expect to be treated in a highly personal manner. Accordingly, business models have also turned around to cater to customers in a very personalized manner. This explains the present day boom of Direct to Customer business models. This has also made businesses to develop highly sophisticated tools for client segmentation, collect customer data, and guarantee customer satisfaction in a highly personal manner. Mass marketing is no more the name of the game.
Direct to Customer Model
Direct to Customer or the DTC model is being accosted by many brands as an improved method of marketing. The DTC model allows brands to not only eliminate huge costs but also lets them gain insight into consumer behavior and take control over their marketing and keep greater profit margins. Engaging directly with the customer builds brand loyalty and maintains a strong relationship with the customer. By knowing, understanding, and analyzing customer behavior, businesses are able to devise precise marketing strategies with highly effective results.
Need for a DTC model
Creating a better consumer experience
The quality of the consumer experience can be the differential factor in attracting and retaining customers. In the present days of mobile and cloud technologies, customers often demand an unmatched experience while engaging with the brand. A DTC model allows businesses and brands to provide a seamless customer experience. They are no more at the mercy of the distributor to ensure that the customer leaves the store happy and satisfied. With the necessary insight and the right culture in place, direct selling to consumers can turn the consumer’s vision into reality.
Building relationship with the customer
A direct to customer marketing allows brands and businesses to open a communication line with the customer and build relationships. DTC builds brand awareness and lets manufacturers be in charge of the customer relationship without any retailers or partners in between.
Collecting Customer Data
Consumer behavior trends show that consumers prefer and appreciate a highly personalized buying experience. A DTC model allows businesses to collect a very large amount of customer data. This not only helps them to analyze customer behavior but also arms them with data to tailor the products keeping in mind the customer preferences. The collected data can also be used to predict future shifts in the market and can direct our decision making.
Direct to consumer media
As consumer preferences and behaviors change, the ways companies offering direct to consumer media services operate is steadily evolving. Consumers increasingly stress on the need of a quality experience while cutting costs wherever possible. For decades, media companies have sold their channels as a part of a larger bundle of channels through cable and satellite. But consumers now demand only those particular channels that they watch in order to reduce costs. To have a bundle is no more desirable. Hence, the need for companies to build a direct relationship with the consumer and offer quality content arises. Consumer habits are being driven by mobile and connected TV and are opening up newer opportunities for the media companies. Consumers expect fresh content more often while hoping to pay lesser than the direct to consumer media giants Netflix and Amazon Prime. Premium companies like Disney and HBO are beginning to offer their own content without any middlemen in between.
It’s a new brand story with every DTC model!