Strategies for Scaling DTC Brands

eComm brands spend years building up their presence online, capturing new customers and presenting themselves on many communication channels. Great! But eventually, they all hit a plateau. It's totally normal, I've seen it hundreds of times. If you're DTC brand and you're on that plateau, you have 3 ways to break through and start scaling, again: 1. Acquire new customers - find a new audience that will appreciate your existing goods. Spin up a new brand if you have to. 2. Sell new products to existing, loyal customers - you know your customers well... find out what else they need/want, design products around those desires and widen your offering. (Kevin Kelly's "1000 fans" solution). 3. Improve your back-office efficiencies - Optimize and automate your entire back-office from inventory management, accounting, fulfillment, vendor relationships, replenishments, etc etc. Stop using cobbled systems and spreadsheets. Consolidate everything into 1 ERP. Your brand has matured. It's ready for this. You need to truly understand your profitability and see your entire business as an organism. Find the weak points and fix them. Make money through saving money. 1 & 2 are customer facing and I'm willing to bet you know how to win, here. But if your back-office isn't as automated as possible, scaling 1 & 2 can actually hurt your brand (late shipments, inventory inaccuracies, lack of profitability insights, etc). No. 3 may not seem obvious, but dedicating to this growth will serve you well for the rest of your career. This is the secret sauce I've learned by working with all these successful brands. The closer they watch their numbers, the bigger they grow. Hot on my mind because of all the conversations I had at #shoptalk2024 #eCommerce & #ERP || #BetterTogether #DTC #B2C #B2B #POS

We started working with Dr. Squatch at $3M in revenue and today they are 100x that! I first met Jack, the founder, when he was the only employee. Here are 7 key takeaways I learned from having a front row seat to one of the greatest DtC success stories of the last decade. 1. Do not get stuck in the last click attribution trap! When we launched our first YouTube video for Dr. Squatch they didn't have perfect attribution. In fact, YouTube has the worst attribution of a social advertiser. They knew that when they ran YouTube they had record days, so they spent and built their own models that weren't based on last click. This willingness to follow the revenue trends and to blaze a new path was key to their success. 2. Be willing to take big swings with your marketing. Everyone we showed the initial video to thought it was too long 😅 We knew though that James Schrader was amazing and that Jacques Spitzer knows what works on the internet better than anyone. Together we created magic that catapulted Dr. Squatch! 3. A great brand grows a total addressable market (TAM) Dr. Squatch is the leading cold processed soap manufacturer in the country now! They certainly didn't start that way. A great product can grow a total addressable market. 4. Scent (even through the internet) is incredibly powerful You can't smell through your computer...but...scent still works! Scent is a powerful driver for human beings. People love products that make them feel and smell good! 5. Generating demand is super hard DtC is all about generating your own demand. It's one of the hardest things to do in business. Capturing demand is way easier, but far more limited. If you're going to be a truly great business you need to learn how to generate demand. 6. Figure out your hero product and view all other products as levers to support AOV and LTV Most DtC brands (even those with tons of products) have a hero product that is their best TOF conversion driver! You really only need one great TOF product to create a path for your business, then everything else you add on from there increases your AOV and LTV to make your TOF hero product that much stronger! Dr. Squatch is still leading with soap. 7. It's never too late to have success Dr. Squatch was 5 years in when we started working with them and they seemed doomed to become a $3M business that was eventually sold for inventory. Raindrop created a new way of thinking and a path forward for the brand that they capitalized on to reinvigorate the vision and dream! #drsquatch #dtc #dtcbrands #dtcmarketing #ads #ecom #ecommerce #shopify #metaads #tiktokads #youtubeads

If you gave me a DTC brand with a negative profit And told me I had 30 days to make it profitable I’d give you 15 days back. Here’s how we increased profit by 418% in 15 days: One of the brands we partnered with was: - Right in the middle of their slow season - 2 months of poor profit (Jan $4.4k, $ Feb $-377) - Avg last 2 months was $2,011 profit We started by: 1. Understanding what we’re up against. We do a seasonal trend analysis for every brand we work with. We found out that this jewelry brand typically saw a dip of 30% Jan - April She's been in biz for 6yrs. We had to get a 40% lift in sales, quickly, to keep them from following the same trend. 2. Find new breakthroughs If you didn’t know, there are 21 possible breakthroughs a brand can do that can swing big revenue doors. I made a post about it last year. The best way to find them is to - Look at the marketing calendar. Empty calendars = empty sales - Use common sense - most of the time you already know what they are - Ask your customers We came to the realization that this brand needed a new attention vehicle to bring customers back and acquire new ones. 3. Implementation Blows my mind how we ever OVER LOOKED this. But the first thing we did is ask the founder 5 questions: - What stories do people tell about your product? - What emotions do people feel when wearing your product? - What emotions do you get when designing the product? - What are some ways this product can brighten someones day? - If your site was a store, what conversations would you have when people walk in? These answers gave us: - The emotions to show visually - The emotions to convey in copy - The type of offers we should consider to bring attention back 4. Next, we asked the customers Based on the founders answers, we made an email campaign including those elements, feelings, and wishes Then we sent out a 3-question survey to ask all the customers for their answers This survey literally asked them: - For this month (and International Women’s Day), which offers we can do for a brand that would be meaningful - Who do you want to show the most love to on International Women’s Day? - What is 1 thing [insert brand name] can do to make the jewelry more irresistible? We did this so we wouldn’t have to guess what they wanted. They told us EXACTLY what they wanted. And this survey went nuts by the way. 5. In 15 days, we launched a new offer for International Women’s day Gave out some some freebies, a sitewide offer and some introduced new products. In 15 days the founder and us: - made a landing page - new ad campaigns - new emails campaigns - new offers From this one initiative alone they are up $18k a month in positive profit. They’re on pace to have their best year And are going to be profitable on a month that is normally bad This is how you can reverse a SALES SLUMP.

CannaBrands, here are 5 strategies which I’ve found consistently drive profitable and efficient growth without costing any extra money 1. Increase your focus on high value customers—I used to conduct quarterly business reviews with our biggest dispensaries where I’d calculate how much money they lost each day when they stocked out of our product and resorted to selling cheaper substitutes. I’d also prime them for upcoming new product launches. This is a time to show them how you can support their success, not how superior your product is. 2. Target the geographies where your prime demographic shops—our brand packaging, product formats, and price points appealed to soccer moms and high tech employees who shopped at Costco and weren’t as price sensitive. This is a main reason our highest volume stores were concentrated in Bellevue, Redmond, Issaquah, and Kirkland. (If you’re not familiar with the Seattle area, this is where Microsoft, Costco and T-Mobile are headquartered) 3. Offer to set up Vendor Managed Inventory—partnering with a customer in this way will cut down on phone calls, emails and delays in your sales process. Make sure you keep the trust that you’ve earned. Don’t overstep by overselling. 4. Focus on regions where you’re not getting your fair share of the business—some states publish free sales data by county. In Washington, it was 502data.com. Since we had statewide presence, I’d compare our geographic revenue mix to the industry’s, and if we under-indexed in a highly populated county, I’d target the biggest stores in that area. 5. Land and Expand in your stores—new stores would often buy only one or two of our product lines at the start. So I’d incent the sales team to sell-in additional lines over time using the formula: 100 stores in your territory x 10 possible product lines = 1000 total lines. The incentive $$ stepped up when your stores portfolio hit 40%, 50%, and 60% of that 1000 total. There you have it. 5 strategies which require some extra effort, but no extra money to execute more profitable and efficient sales growth. I guess that’s not 100% true—the commission checks will be bigger, but that’s a good thing, amirite? What strategies and incentives have you found successful? #fractionalcfo #cannabisindustry #consultingservices