Commentary

Why DTCD (Direct-To-Consumer DATA) Is Secret To DTC Success

Luma Partners’ Terry Kawaja had quite the provoking title for his presentation at the recent Association of National Advertisers' Masters of Marketing Conference: “Fire Your CMO.”

Despite the alarming title, the always inspiring Kawaja had a good point.  DTC brands are kicking traditional marketers’ &%$ because of a superior distribution model built on convenience. More importantly though, they are succeeding because they prioritize collecting and growing their own intellectual capital. In other words, they are not afraid to challenge deep-seated marketing myths about data. Perhaps the most egregious myths are the following: 

  • Consumers won’t give us information willingly, so we have to buy it.
  • Past-purchase data is enough for personalization.
  • We have an effective segmentation strategy.

Let’s follow the DTC brands’ lead and do some myth-busting right here, shall we?

"We have to buy consumers’ information, since they won’t give us info willingly."  DTC brands have proven all you have to do is  ask and you shall receive — as long as you provide a strong value proposition in return, that is.  And that doesn’t mean just discounts.  Value comes in many forms: a better experience, a shortcut to what the consumer wants, the offer of a great piece of content or just the prospect of some fun.  

There have been enough stats out there that prove consumers will and do provide information in exchange for value and an improved, more personalized experience.  AND they would rather give their information directly to brands they trust rather than to third- party aggregators and resellers who in turn offer their information to anyone who will buy it.  

"Past-purchase data is enough for personalization." DTC brands know that why someone purchased is much more important than what they purchased.  And now, we are heading into in the worst time of year for collecting this type of inferred past purchase “dirty data.”  

I bought my friend a Viking shirt for Christmas, but you better not start showing this diehard Patriots fan Viking gear for the next six months.  

Simply asking  “Is this a gift or for you?”  “Friend or family?” and “Who is your favorite team?” avoids the risk of being annoying and even flat-out wrong.  Brands can turn what could have created a negative brand perception into a brand experience that “gets me” and has permission to  continue the conversation with me in a relevant way. 

The more a brand understands about WHY a purchase was made, the more the conversation can unfold in a mutually beneficial direction.

“We have an effective segmentation strategy.” I’ve been spending a lot of time with brands recently, and the most consistent statement I’ve heard is “We really do not know our customers.”   

That’s because customers’ preferences change all the time. DTC brands understand that consumers’ motivations, preferences and interests shift on a daily (maybe even hourly) basis.  

Segmentation strategies that are built on annual demographic appends and past purchases just don’t work.  You no longer need to spend millions of dollars for an agency to tell you who your segments are.  Instead, now brands can constantly “feed the machine” and analyze and interpret direct sources of consumer data to define real-time targets and segments that drive real action. And that “in the moment” segmentation data can only be captured by asking consumers directly.

So what does this all add up to? Let’s add another “D” to DTC: direct-to-consumer data. As it turns out, that “D” is the secret to DTC success.  

This is how brands can actually get to know their customers and prospects and deliver relevant messaging.  It is how brands build consumer engagement, trust and loyalty today. 

How do they make all that happen? They just ask.

2 comments about "Why DTCD (Direct-To-Consumer DATA) Is Secret To DTC Success".
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  1. Alvin Silk from Harvard Business School, November 21, 2018 at 7:21 p.m.

    Time for the current crop of ahistorical DTC converts to acknowledge and study their ancestry--hint: google  Fuller Brush,W.T. Rawleigh, and J.R. Watkins.

  2. Ron Kurtz from American Affluence Research Center, November 23, 2018 at 2:16 p.m.

    How can any CMO not be embarrased to say "We really do not know our customers"? Shame on them. They should be fired.

    Good survey research, if carefully secured and analyzed, will provide great data to identify and understand the motivations of one's customers. And in most cases, the consumer does not change much from one year to the next.  

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