10 Ways D2C Brands Can Build Customer Loyalty
For manufacturers and consumer packaged goods (CPGs), there is a silent undercurrent that is quickly becoming a reliable strategy to thrive in competitive markets and also allows brands to have tighter control over their overall business. The Direct-to-Consumer (D2C) business model or strategy eliminates middlemen/middlemen between producers and consumers. This gives growers/manufacturers greater control over pricing, consumer data, direct relationship building, and most importantly, higher margins.
Online and hybrid business models had only started to become commonplace when the COVID-19 pandemic hit and made them all the more important. One obvious reason why D2C is hot is that businesses suffered the worst performance in a decade during lockdown and D2C as a model is quite self-contained in more ways than one.
A D2C model is where a brand sells its products directly to the end consumer and not through channels like retailers or wholesalers, whether online or offline. One-to-one communication, first-party data collection, lower distribution costs and higher margins are the four most important reasons that make a D2C business model one of the best models on the market. which companies can rely on. This leads to better customer loyalty and retention.
Although D2C does not necessarily refer to an online model, the way e-commerce has exploded over the last 5-10 years says enough about the importance for any business to be present and to evolve online. . Resistance is more likely to cause businesses to fail, especially when the COVID-19 pandemic has only amplified the need for e-commerce and its need to help survive through daunting challenges ranging from security food to health care and basic livelihoods. It will continue to play a vital role in the “new normal” that brands and the world at large are adapting to. Therefore, a hybrid model is more likely to see some sort of resurgence of empathy at the center of customer service.
Consumer Loyalty in Retail
Shopping in the digital age is easy. However, if D2C brands want to build loyalty, they need to get into the veins of building relationships with their customers. What we are referring to here is relationship marketing where D2C brands emphasize treating their buyers more like humans than customers/members of a particular category, group or segment. There may be several people who buy a product, but their reasons may always differ.
Customer experience must take precedence over customer loyalty expectations. D2C brands can be intuitive in finding the nudges that entice a customer to make a repeat purchase or make a repeat customer feel good every time they make a purchasing decision.
Let’s consider 10 smart ways D2C brands can build customer loyalty:
Identify the behavior – Identify behaviors that signal love for your brand. It could be an Instagram follower who likes your posts and hears them repeatedly, which helps you gain exposure or make sales. It could be someone who actively writes positive reviews or offers honest feedback that helps you improve your product. Once you find customers who portray these behaviors, step out of the norm to make them feel special and acknowledge their love.
Reward only – Go beyond transactional mechanics and reward your loyal customers in a way they would never expect a brand to treat them.
Brand communities – Communities are a great place to keep your customers engaged, entertained, and informed about the brand. Brand communities are also an effective way to influence and drive sales, retention and the implementation of loyalty programs. D2C brands can practice social listening by segmenting their audience into relevant groups and monitoring their performance while learning what exactly their customers are saying about the brand. What can also follow in a tight-knit brand community are influencer collaborations, designing and executing bespoke loyalty programs, and promoting UGC content.
Customize – A D2C model is closest to a consumer. Therefore, customer loyalty relies heavily on personalization and creating relevant audience groups. View purchase history to offer recommendations or create a dedicated landing page for each audience group to speak to them clearly at every touchpoint.
Customer Feedback – As the transaction and exchange of experiences are direct, customer feedback is the key to gather length and breath of data, performance and areas for improvement of products/services. The good part is that it’s the unfiltered version straight from the consumer that is the best source to validate your product’s performance.
Distribution channels – A D2C brand doesn’t need to be present in every market, but it definitely needs to be present where its audience is to build customer loyalty. A brand can be D2C-first instead of D2C-only. If a particular city is generating more demand, it makes sense to cater to that instead of having a presence in a city where demand isn’t as high. The key is to be present where the need is and this forms the basis for building a loyal and strong following. Also, experiment with different business models to see what works best for you. Choose between a subscription model or a small-scale business partnership, select a few relevant stores to reach a wider audience, or launch a pop-up.
Encourage Channels – Let’s not confuse this with unique rewards. Consider your channels and identify opportunities for growth. A market could say, for example, displaying more growth opportunities through effective retail links and influencer collaborations. Next, this is where you inspire your channel partners to stay motivated to perform better. As mentioned earlier, as a brand, you will always find small pockets where demand is growing or constant. This is how you are always present where there is a need which is a key to loyalty.
Polish your technology – Being present online is no longer enough as media and platforms continue to evolve. Augment your technology stack to provide convenience and access to your customer and expand your reach to meet demands. Discover tools, plugins, software, social media platforms, bots and emerging technologies that can provide or improve your existing marketing and business models.
Data privacy – First-party direct data can give you a taste of your favorite dessert, but can quickly cause problems if you don’t take the right steps to protect it. In the blink of an eye, your customer loyalty plummets just like the Jack that fell off the hill. Have your SSL, TSL and HTTPS in place for enhanced online security.
An eye for AI – This one is for tech-averse brands who are hesitant to invest in the latest technology to improve their delivery and end experiences. AI models are reliable because they have proven their potential. It can help brands streamline communications, automate recommendations, calculate costs faster, personalize, and do so much more for new and existing customers.
How D2C brands build, strengthen and nurture relationships with their customers lays the foundation stone on their path to prosperity. There are many cost-effective ways for D2C brands to delight customers at different stages of their buying and product journey.