Scaling a DTC brand is the holy grail of many advertisers… here’s what I’ve done to scale multiple brands to 8 figures and beyond!
It’s really all comes down to 3 things…
Hero Product
The single most important thing when trying to spend money on clothes and acquisition is to figure out the absolute most valuable investment to make with your money. In direct-to-consumer businesses, this looks like a hero product. What best offers meets my financial, inventory, operational, and business goals and capabilities?
Far too often, brands will try to sell a handful of products that create a variety of customer journeys at various PSMs. It is not uncommon for any of these offers to be profitable.
However, the level of profitability is rarely ever the same. We have to ask ourselves whether it is actually worth investing money in multiple places if one of them gives us the best return?
Do you legitimately think that you have exploited so much market opportunity for the best return on the investment you could make that you need to begin to invest someplace else?
Have you sold so much of your best product concerning business operations that you need to start investing in the second best offer?
LTV
LTV is vital
Lifetime value from your customer is the lifeblood of the growth of your business. If people buy only from your wants, it will be tough for you to build your business because you’re a product, not a brand.
Suppose LTV is rarely more than the Ayoví of your average purchase. In that case, you cannot plan against future revenue from existing customers or invest in acquiring repeating income from new ones. This tremendously inhibits your ability to sustain instability and is one of the most significant opportunities in your business today.
The easiest way to improve lifetime value is to focus on the second purchase rate.
What is your product that most often inspires a second purchase?
What if you could get a better AOV on both purchases?
When we are trying to leverage a hero product for LTV, why are we ever spending money on a product that doesn’t give us multiple opportunities to extract revenue from a single customer journey?
In marketing efficiency, reoccurring revenue from second and third purchases often comes in a much better exchange rate than acquiring a sale through Facebook ads. The discipline of focusing on LTV through additional investments is the secret sauce that can help you scale your business because you understand that you’re getting more operating capital every day than you did the day before nearly by doing your job well.
USP
Positioning is one of the biggest misunderstandings in direct consumer marketing and business development. Unless you are a mass retail product and big box retailer, your unfair advantage and unique selling proposition are not a low-quality product for most people to enjoy. What separates direct consumers from retail has a higher quality customer experience at a slightly premium value.
Instead of trying to compete with the brands sold by the Target’s and Walmart’s of the world, you can focus on your brand doing a portion of their business better than the products that they sell do. The bigger a brand gets, the less it can adapt and be better than the market in a specific specialty.
Specialization creates market share. The bigger the brand, the more available their products are, at a lower quality, ultimately a lower price. People buy direct consumers versus going to the store because they want a better rate, a better value, and a better experience with their shopping decisions.
Your unique selling proposition should be how you do something better than most of the market to steal a little bit of market share from the big players that stopped caring about their customers a long time ago.
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