What is direct-to-consumer (D2C)? This term describes a business model that has no retailers, brokers or other middlemen between the product or service provider and the consumer. It also describes the marketing approach used to reach, engage and convert potential customers through the company’s direct channels.
D2C has come a long way since the days of mailers and late-night infomercials. Both of these techniques still exist, and some marketers will always contend that certain old-school tactics are regaining ground, but the reality is digital and social media changed the direct marketing game completely, across all categories.
Products that used to rely on retailers can now reach potential consumers through an inexpensive Instagram campaign. Services that likewise used to rely on being part of a larger entity (for example, personal trainers and elective healthcare providers) can now stay in constant touch with their database of former and potential clients through email marketing and smartphone videos.
Direct-to-consumer marketing channels
Direct response TV
- Digital/VOD commercials
Note: Direct-to-consumer marketing should not be confused with direct sales. The latter is when independent salespeople demo and sell products outside of any retail environment, but with a person-to-person sales pitch. Most commonly, today’s direct sales encounters come from network marketing and MLM businesses.
D2C pros and cons
The upside to D2C marketing is that, with no middlemen, companies can sell their services or products for less, giving the consumers a better deal, and increasing profit margins for the company.
They can also have a lot more control over who sees their marketing, optimizing campaigns only for target customers and cutting out a lot of the budget wasted on campaigns done through retail partners.
The downside is that selling only D2C means that potential consumers are limited only to those who the company’s marketing reaches. They miss out on the exposure that comes with being in a big store, or being sold by a broker.
Optimizing your approach
There are things about D2C marketing that consumers like, and things that are very off-putting. Also, there are things that work well in the right time and place, and can completely bomb out without a smart strategy.
Direct marketing phone calls
People may dread seasons such as open enrollment for health insurance when dozens of brokers may approach any potential lead.
However, when a person has a very specific health issue and their existing insurance doesn’t provide what they need, they may be enthusiastic about speaking to an insurance broker that a trusted friend refers and getting specific information about other options.
Emails to “qualified” leads
Real estate professionals pay for memberships to sites like Redfin and Zillow, but it’s a love-hate relationship. Most potential customers don’t want to hear from 25 potential agents just because they clicked a button asking for more information on a house.
That said, there are times when people actually need an agent — for example, when moving to a new city that requires each party be agent-represented to rent or buy a home. In this situation, a real estate professional who doesn’t just respond to inbound leads, but follows up with solid information and good customer service might end up getting a new client within a day.
Direct marketing to existing customers
If people are already customers or fans, D2C makes a lot of sense. These people often like to receive deals that are exclusive to mailing list members or pre-existing customers. They may appreciate getting updates on new or returning merchandise. They might even appreciate a text message letting them know about a flash sale or promotion.
But it’s a sensitive balancing act to provide those deals and news updates without overwhelming members of a database.D2C has come a long way since the days of mailers and late-night infomercials. Social, influencer and email marketing are now at the top of most companies' favorite ways to reach consumers. #marketing #d2c Click To Tweet