If you’re an established or emerging product manufacturer, you naturally want to grow your business. Including a distributor or reseller in your sales pipeline makes plenty of sense. What’s not to like about someone who takes your goods to a wider audience and then markets, distributes, and ships them to your customers?
Still, when the pandemic arrived, you likely experienced the flip side of the traditional approach.
Shipping delays, delivery snarl-ups, and stock management have become the new headache in the new normal and may even have sent your customers to your competitors, leaving you with no chance to win them back.
This is just one situation where the direct to consumer model, or the D2C subscription model, outperforms the reseller to consumer one, as it gives you more opportunities to retain customers who weren’t satisfied with your service.
If you’re looking to take the plunge into D2C with a subscription business, it’s a great time to get started. In this article, we’ll discuss what direct to consumer is, the benefits of building a D2C brand, and how to ensure the growth of your D2C subscription company.
Direct to consumer (D2C) is a business model where a company manufactures, markets, distributes, ships, and deals with returns of products without the help of third-party retailers or distributors. In other words, it cuts out nearly all the outside players involved in production and delivery.
Even though this is nothing new, the D2C model is growing, and research suggests that many US companies will soon have adopted D2C either partially or fully.
Source: D2C e-commerce sales in the US, 2019-2023
All of these things can sound like a lot of work for a D2C company, but there are also plenty of advantages of shifting to this strategy.
Let’s take a look at what D2C can bring to your business.
Whether you use D2C exclusively or only partially, the model offers plenty of benefits compared to promoting and selling your goods through resellers. Here are the most important ones.
D2C works especially well for business models involving subscriptions and memberships. And it’s no wonder since they involve more client-based feedback, put personalization first, and depend on first-hand customer data to operate.
The question is, how can you build a successful D2C subscription company?
Check out our top tips to get started.
First things first: you have to decide whether a direct to consumer approach will be a part of your strategy or your whole business model. As we’ve already pointed out, you can combine online sales with a physical store presence or go digital-only.
The good news is that there’s no wrong strategy once you know where you want to take your business. Once you’ve taken this first step, here are the top tips that will fit either scenario.
When US mattress manufacturer Casper was starting out, the founders came up with just one mattress type while other brands were offering up to 200. That might sound foolish, but limiting the choice was exactly what they needed to enter the market, despite the presence of reseller giants.
Through research, Casper’s founders discovered that shopping for a mattress is a horrible experience, even if most people have very basic requirements. So they invested time and money in figuring out the formula for the perfect mattress to avoid placing the extra burden of choice on consumers. The result? $100 million in sales in less than two years.
A D2C subscription business strategy addresses three key elements: how to sell, who to partner with, and what to do when the company needs to move on. Let’s review each one.
For a D2C brand, audience is everything. Building a loyal customer base fast and well is the key to success. Here’s how some brands did it.
As a direct to consumer brand, you’ll usually be offering a product that can be found in retail stores, which is why you have to focus on quality. From the product itself to convenience at checkout, along with the ability to purchase on-the-go, no-questions-asked returns, and impeccable 24/7 service… everything has to meet the highest quality standards.
All these little things build customer trust and loyalty to your brand — something that no third-party distributor can give you.
Since the D2C strategy/model is digital-first, creating a viral visual presence and branding is a must for every D2C subscription business. If you also have a physical presence, you can use that as an advantage, too. Let’s see how to do it.
<iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/ZUG9qYTJMsI” title=”YouTube video player” frameborder=”0″ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture” allowfullscreen></iframe>
When you interpret your data properly, you get to know your clients and measure your company’s market performance, and you can quickly change your marketing strategy when needed.
Subbly offers real-time data analytics and tracking, loyalty programs, and tools for you to create customer surveys, as well as 50 other features that help with collecting and interpreting data first-hand. Just don’t forget to keep your data safe and use it responsibly.
Creating a successful D2C subscription company isn’t hard when you know the unique benefits of your product, market it to the right audience, and use the right tools to manage your business.
By combining the useful insights in this article with digital marketing and your own creativity, you can easily create a subscription business that’s ready to win consumers’ hearts.
At Subbly, we’re subscription first. That means it’s our priority to create the best subscription experience for your customers and power you with the best management tools for running your business effectively. Try our services for 14 days at no charge and see it for yourself!
Get 110+ proven strategies to unlock growth and revenue in our subscription scrapbook.