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- The DTC Insider - Weekly Newsletter - 20/09 - Issue #24
The DTC Insider - Weekly Newsletter - 20/09 - Issue #24
This is What Successful DTC Brands Have in Common
Welcome to this issue of The DTC Insider newsletter. 👋
We'll send you weekly emails, every Wednesday, trying our best to deliver great value to your inbox.
In this newsletter, you'll find:
💠 This is What Successful DTC Brands Have in Common
💠 How to Focus On What Matters For Your Business
💠 Supplement Brand Bootstrapped $10,000 and Built It Into Sales of $30 Million in Three Years
This is What Successful DTC Brands Have in Common
I've interviewed over 100 successful DTC founders and directors on my podcast, and these are some common elements I found:
💎 Offer a product their customers actually want
🤝 Clear values and unique value propositions
💰 Know their numbers very well
😜 Have a unique personality
🤯 Create a WOW customer experience
📦 Forecast inventory to avoid overstocking or running out
🧑🤝🧑 Awesome team, with the right headcount
🤓 Leverage a similar tech stack
Let's go through each of them:
💎 OFFER A PRODUCT THEIR CUSTOMERS ACTUALLY WANT
This sounds straightforward, but it's not.
Many times, brands need to release a batch of products and make improvements, leveraging customer feedback, before producing more and scaling their business.
Sounds logical, right?
Yet many companies don't operate this way.
Which leads to offering products nobody really wants.
🤝 CLEAR CORE VALUES AND UNIQUE VALUE PROPOSITIONS (UVPs)
First off, if you haven't read the book Traction, go read it to better understand this concept and why it matters.
Why should a company have core values?
They'll help you, among other things, with:
New hires: you'll get a better idea on what questions to ask, and whether the candidate is a good or bad fit for the company.
Your team: you'd want to build a team aligned with your core values and company culture. So defining them will give you more tools to assess if someone is not a good fit for your company after all.
Clients & vendors: these two also need to be aligned with your values.
Btw, some people I've interviewed had their core values written on the wall.
That's how important this is to them.
What about UVPs?
It's basically what makes you different from your competition.
Maybe it's better fabrics, a faster/better service, sustainability, or something different that makes you stand out and become a better choice for the consumers.
💰 KNOW THEIR NUMBERS VERY WELL
Although this may not be perfect, I can almost guarantee that they keep track of more metrics, more often, and more accurately than non-successful brands.
😜 HAVE A UNIQUE PERSONALITY
Let's be honest: Many companies offer products that are also available from other brands.
And one of the ways to stand out is by having a unique personality.
Take this example:
The typical men's underwear brands use models to showcase their products and content on social media.
Yet, this brand I interviewed a few months ago, took a disruptive approach.
The four founders are the face of the brand.
In fact, they first tested models, and this works best.
Why?
People feel a deeper connection when the brand is "more human".
Plus, they are fun and create funny content on social media, that makes people engaged.
🤯 CREATE A WOW CUSTOMER EXPERIENCE
I discussed this with a former Disney executive focused on "Disnifying" the customer experience.
That means, mapping out your processes and adding a "wow" factor.
Let's see a few examples in the DTC space:
A founder told me he personally calls their customers to ask how they feel about their products.
Some others send them personalized, hand-written, thank-you notes. A different one in each order.
Other brands select a group of VIP customers and give them products away to test & give feedback to improve it before its public release.
Finally, some brands even ask their loyal customers (or even their fan base) what products they'd like to see next, and they go ahead and create the top-voted ones.
📦 FORECAST INVENTORY TO AVOID OVERSTOCKING OR RUNNING OUT
An 8-figure company I've recently interviewed said they didn't properly forecast their inventory for Q4 2022 and ran out of stock too soon.
Causing a huge impact on sales, as you can imagine.
On the flip side, some brands order way more inventory than they can sell with their sales & marketing strategies, among other factors, causing cashflow issues.
🧑🤝🧑 AWESOME TEAM, WITH THE RIGHT HEADCOUNT
Having the right people, in the right seats, is very important for brands.
The book I mentioned above, Traction, talks about this in-depth.
Having the right headcount is equally important.
If you overhire, you'll end up hurting your bottom line.
🤓 LEVERAGE A SIMILAR TECH STACK
Most successful brands I've interviewed use a similar tech stack for different purposes.
Here's the list I've put together:
KnoCommerce: for post-purchase surveys
Tapcart: for building a mobile app
Rebuy / AfterSell: to capture repeat purchases
Recharge: for subscriptions
JudgeMe / Okendo: for Shopify reviews and more
Aftership / Malomo: improving the order tracking experience
Twik: product catalog sorting tool through AI
Klaviyo / Sendlane: for email marketing
Attentive / Postscript: for SMS
Zipify: Up/Cross-sells
Replo (YC S21) / Shogun / GemPages: landing pages
Archive: UGC Gathering
Triple Whale / Northbeam: analytics
Gorgias: for customer support
FlexReturns: for returns
Numeral: Tax Compliance
Finaloop: P&L + Bookkeeping
Parker: Credit Card
Retention: email list growth
Viralsweep: for giveaways
How to Focus On What Matters For Your Business
If you want to make REAL progress in your business, you need to focus on what matters.
The problem is that if you focus on too many things at once, you're likely not gonna make progress.
So, start by taking a break and forget about your ad account and email marketing efforts for a moment...
And follow this 4-step framework:
🎯 #1 - GOALS
I'm sorry. Sometimes this is boring, but man...is it necessary to make progress.
Think about the high-level goals for your business.
Not sure about your business goals? Well, start there.
⚔️ #2 - CHOOSE YOUR BATTLES
Unless you have a really big & powerful army, you'll need to choose your battles wisely.
Then try to assess what you need to work on to move the needle...
Choose one or two at a time.
It's the 20% of effort (aka focus) that will produce 80% of the results.
A few examples of projects/battles are:
Increasing AOV
Increasing LTV
Decreasing CAC
Increasing gross margins
Increasing brand awareness
Improving reputation
Not all of these are relevant to every brand, so choose the ones with the highest priority for your business.
⚠️ #3 - IDENTIFY BLOCKERS
Ask yourself and your team the following questions for each of these projects:
Where are the main blockers/bottlenecks that are preventing this project (ie. increasing AOV) from succeeding?
What are the best channels to accomplish that?
Do we have the capacity, or the right person/team working on it?
🎬 #4 - TAKE ACTION
Otherwise, the previous steps don't make sense.
Now, you're in a position to lay out an action plan, including the high-level tasks you'll need to work on to move the needle.
For example, let's say you choose Increasing AOV.
Main blockers/bottlenecks: we don't offer bundles or any in-store upsell before visitors complete the purchase.
Best channels to accomplish that:
The store: using (or not) third-party tools to offer upsells
Email: through a post-purchase sequence
Do we have the capacity/right team to work on it? Yes
Action plan:
Get a Shopify app - for example - to set up the in-store upsell popups
Set up an email in the post-purchase flow to promote the upsells
Supplement Brand Bootstrapped $10,000 and Built It Into Sales of $30 Million in Three Years
If you're not following Ronak Shah from Obvi already, I'd recommend you do.
As he and the other co-founders are building un public a great brand.
Why great?
To start off, they went from $0 to over $30M in under 3 years.
Now they are in all 4,000+ Walmart locations.
And they've grown an awesome community of raving fans.
Btw, this episode of The DTC Insider podcast originally aired on May 27th, 2022.
So, if you didn't listen to it, this is a great time to do it!
In this episode of The DTC Insider podcast, we discussed:
👉 Ronak Shah explains how Obvi began
👉 How Obvi's packaging differentiates the brand from its competition
👉 Do you have to be an expert on a subject before starting a business in that industry?
👉 How Ronak leverages customer feedback to innovate and improve his brand
👉 The strategies Ronak and his business partners use to build a successful brand
👉 Ronak talks about the value of having business partners, working around a vision, and the key elements that drive Obvi's growth
👉 Obvi's unique strategies for hiring, attracting, and motivating employees
👉 The challenges Obvi faces at different stages of growth and its main channels for driving traffic into sales
🎧 Tune in to our latest episode: https://thedtcinsider.com/
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