SKU’d Thoughts 28: How should DTC startups think about marketing?

Marketing and brand building are at the core of the direct-to-consumer business model. I recently organized an event with Nik Sharma, a marketer who has been involved in the DTC space before the acronym was even coined, to go through some tactics on how early-stage DTC companies should approach marketing. Below are some key takeaways from the session.

Focus on the supply side of DTC flywheel.

Nik described DTC marketing as a double-sided flywheel, with a demand and supply side. The demand side consists of brand value, acquisition, and channel growth while the supply side is made up of resources, capacity & capabilities, experience and retention. He noted that at the early stages most startups pay more attention to the demand side when they should be investing more on the supply-side. According to Nik, experience should be the focal point of any startup thinking about activating the supply side of the DTC flywheel.

Experiment with the ACE Model.

Nik highlighted his ACE model — Audience, Creative and Experience. Using this model, brands can define several audiences (ex. Uber drivers, tech bros, stay-at-moms, etc.), produce multiple creatives (ie. artwork, design, and concept that goes into a website design or ad) and stage several experiences (ex. Guess your flavor quiz, subscription bundle push, etc.) to uncover which what creatives lead to the best outcome, brands have to experiment with several combinations. For example, a brand can produce three different creatives targeted at Uber drivers, with each creative leading the drivers to a different experience. Introducing multiple combinations to the same audience allows a brand to assess which creative and experience to double down on for a particular audience.

Create MVP content at scale.

Nik recommended that brands create minimum viable content to test how audiences respond. With this approach, content would be activated on select channels (Facebook, Instagram, Twitter, etc.) and targeted at specific audiences. He emphasized the importance of brands creating content that doesn’t feel like an advertisement and leveraging customers in the content creation; customers are a brands’ best feedback loop.

These three takeaways are a few of the DTC marketing gems Nik shared during his session. For more actionable insights, follow him on Twitter or text him at 917–905–2340.

Cross posted on Medium